Financial highlights
Revenue
+9.8%at constant exchange rates
Adjusted operating profit*
+11.1%at constant exchange rates
Adjusted earnings per share*
+7.0%at constant exchange rates
Dividend per share
+10.0%For the year ended 31 December 2022. *Alternative performance measure
| Financial results | 2022 | 2021 | Growth as reported | Growth at constant exchange rateΔ |
| Revenue | £12,039.5m | £10,285.1m | 17.1% | 9.8% |
| Adjusted operating profit* | £885.9m | £752.8m | 17.7% | 11.1% |
| Adjusted profit before income tax* | £818.0m | £698.2m | 17.2% | 10.5% |
| Adjusted earnings per share* | 184.3p | 162.5p | 13.4% | 7.0% |
| Dividend per shareΔ | 62.7p | 57.0p | 10.0% | |
| Statutory results | ||||
| Operating profit | £701.6m | £623.3m | 12.6% | |
| Profit before income tax | £634.6m | £568.7m | 11.6% | |
| Basic earnings per share | 141.7p | 132.7p | 6.8% |
Highlights include:
- Very strong performance with revenue growth of 9.8% at constant exchange rates, driven by product cost inflation, volume recovery in the first half and growth from acquisitions
- Adjusted operating profit* increase of 11.1% at constant exchange rates, with slightly higher operating margin year-on-year; reported operating profit up 12.6%
- Adjusted earnings per share* up 7.0% at constant exchange rates; reported basic earnings per share up 6.8%
- Strong free cash flow* generation; cash conversion of 107% supported by working capital improvement
- 30th consecutive year of annual dividend growth; total dividend per share growth of 10.0%
- 12 acquisitions agreed over 2022, with a total committed spend of £322 million; two additional acquisitions announced 27 February 2022
- Net debt to EBITDA* of 1.2 times provides substantial headroom for further acquisitions; robust return on invested capital* of 15.0%
- 2023 outlook unchanged
*Alternative performance measure
Consolidated income statement
For the year ended 31 December 2022
| 2022 £m |
2021 £m |
Actual exchange | Constant exchange | |
| Revenue | 12,039.5 | 10,285.1 | 17.1% | 9.8% |
| Adjusted operating profit | 885.9 | 752.8 | 17.7% | 11.1% |
| Finance income | 22.3 | 10.7 | ||
| Finance expense | (90.2) | (65.3) | ||
| Adjusted profit before income tax | 818.0 | 698.2 | 17.2% | 10.5% |
| Tax on adjusted profit | (201.2) | (155.7) | ||
| Adjusted profit for the year | 616.8 | 542.5 | ||
| Adjusted earnings per share | 184.3p | 162.5p | 13.4% | 7.0% |
| Adjusted operating profit | 885.9 | 752.8 | 17.7% | 11.1% |
| Adjusted for: | ||||
| Customer relationships, brands and technology amortisation | (128.4) | (106.5) | ||
| Acquisition related items | (55.9) | (23.0) | ||
| Operating profit | 701.6 | 623.3 | 12.6% | 6.0% |
| Finance income | 22.3 | 10.7 | ||
| Finance expense | (90.2) | (65.3) | ||
| Disposal | 0.9 | |||
| Profit before income tax | 634.6 | 568.7 | 11.6% | 5.0% |
| Income tax | (160.2) | (125.9) | ||
| Profit for the year attributable to the Company's equity holders | 474.4 | 442.8 | ||
| Earnings per share attributable to the Company's equity holders | ||||
| Basic | 141.7p | 132.7p | 6.8% | 0.5% |
| Diluted | 140.7p | 131.8p |
† See Note 3 of the 2022 Annual Report for further details of the alternative performance measures.
Consolidated balance sheet
At 31 December 2022
| 2022 £m |
2021 £m |
|
| Assets | ||
| Property, plant and equipment | 137.2 | 120.9 |
| Right-of-use assets | 529.6 | 448.3 |
| Intangible assets | 3,093.9 | 2,766.8 |
| Defined benefit pension assets | 60.5 | 63.6 |
| Derivative financial assets | 0.0 | 6.9 |
| Deferred tax assets | 4.0 | 2.8 |
| Total non-current assets | 3,825.2 | 3,409.3 |
| Inventories | 1,748.6 | 1,474.0 |
| Trade and other receivables | 1,557.4 | 1,431.0 |
| Income tax receivable | 12.6 | 8.0 |
| Derivative financial assets | 19.0 | 14.9 |
| Cash at bank and in hand | 1,504.0 | 776.9 |
| Total current assets | 4,841.6 | 3,704.8 |
| Total assets | 8,666.8 | 7,114.1 |
| Equity | ||
| Share capital | 108.5 | 108.4 |
| Share premium | 199.4 | 194.2 |
| Translation reserve | (74.2) | (269.2) |
| Other reserves | 17.7 | 19.0 |
| Retained earnings | 2,469.5 | 2,151.5 |
| Total equity attributable to the Company’s equity holders | 2,720.9 | 2,203.9 |
| Liabilities | ||
| Interest bearing loans and borrowings | 1,574.0 | 1,433.7 |
| Defined benefit pension liabilities | 20.6 | 32.4 |
| Other payables | 117.2 | 72.9 |
| Income tax payable | 1.1 | 1.5 |
| Provisions | 50.5 | 56.3 |
| Lease liabilities | 424.0 | 359.6 |
| Derivative financial liabilities | 100.5 | 27.9 |
| Deferred tax liabilities | 192.7 | 151.0 |
| Total non-current liabilities | 2,480.6 | 2,135.3 |
| Bank overdrafts | 825.9 | 551.6 |
| Interest bearing loans and borrowings | 161.0 | 111.9 |
| Trade and other payables | 2,249.4 | 1,921.3 |
| Income tax payable | 40.6 | 42.1 |
| Provisions | 24.2 | 8.5 |
| Lease liabilities | 145.9 | 129.1 |
| Derivative financial liabilities | 18.3 | 10.4 |
| Total current liabilities | 3,465.3 | 2,774.9 |
| Total liabilities | 5,945.9 | 4,910.2 |
| Total equity and liabilities | 8,666.8 | 7,114.1 |
Consolidated cash flow statement
For the year ended 31 December 2022
| 2022 £m |
2021 £m |
|
| Cash flow from operating activities | ||
| Profit before income tax | 634.6 | 568.7 |
| Adjusted for: | ||
| Net finance expense | 67.9 | 54.6 |
| Customer relationships and brands amortisation | 128.4 | 106.5 |
| Acquisition related items | 55.9 | 23.0 |
| Non-recurring pension scheme charges | (0.9) | |
| Disposal of business | 885.9 | 752.8 |
| Adjustments: | ||
| Depreciation and software amortisation | 189.5 | 171.2 |
| Other non-cash items | 15.9 | 4.4 |
| Working capital movement | 54.5 | 2.1 |
| Cash generated from operations before acquisition related items | 1,145.8 | 930.5 |
| Cash outflow from acquisition related items | (20.6) | (16.0) |
| Income tax paid | (173.6) | (181.4) |
| Cash inflow from operating activities | 951.6 | 733.1 |
| Cash flow from investing activities | ||
| Interest received | 16.2 | 8.7 |
| Purchase of property, plant and equipment and software | (46.7) | (32.7) |
| Sale of property, plant and equipment | 1.0 | 2.7 |
| Purchase of businesses | (243.6) | (436.7) |
| Disposal of business | 49.9 | |
| Cash outflow from investing activities | (223.2) | (458.0) |
| Cash flow from financing activities | ||
| Interest paid excluding interest on lease liabilities | (61.9) | (43.5) |
| Dividends paid | (190.5) | (180.4) |
| Increase in borrowings | 346.4 | 14.5 |
| Repayment of borrowings | (131.8) | (134.9) |
| Realised (losses)/gains on foreign exchange contracts | 86.2 | 25.0 |
| Payment of lease liabilities – principal | (153.1) | (138.6) |
| Payment of lease liabilities – interest | (22.0) | (20.3) |
| Proceeds from issue of ordinary shares to settle share options | 5.3 | 6.6 |
| Proceeds from exercise of market purchase share options | 36.8 | 47.1 |
| Purchase of employee trust shares | (74.0) | (34.2) |
| Cash outflow from financing activities | (331.0) | (458.7) |
| Increase/(decrease) in cash and cash equivalents | 397.4 | (183.6) |
| Cash and cash equivalents at start of year | 225.3 | 429.7 |
| Increase/(decrease) in cash and cash equivalents | 397.4 | (183.6) |
| Currency translation | 55.4 | (20.8) |
| Cash and cash equivalents at end of year | 678.1 | 225.3 |
|
Alternative performance measures† |
2022 |
2021 |
| Cash generated from operations before acquisition related items | 1,145.8 | 930.5 |
| Purchase of property, plant and equipment and software | (46.7) | (32.7) |
| Sale of property, plant and equipment | 1.0 | 2.7 |
| Payment of lease liabilities | (175.1) | (158.9) |
| Operating cash flow | 925.0 | 741.6 |
| Adjusted operating profit | 885.9 | 752.8 |
| Add back depreciation of right-of-use assets | 151.1 | 134.8 |
| Deduct payment of lease liabilities | (175.1) | (158.9) |
| Lease adjusted operating profit | 861.9 | 728.7 |
| Cash conversion (operating cash flow as a percentage of lease adjusted operating profit) | 107% | 102% |
† See Note 3 of the 2022 Annual Report.
Five year review
| 2022 £m |
2021 £m |
IFRS 2020 £m |
IFRS 2019 £m |
IAS 2019Δ £m |
2018 £m |
|
| Revenue | 12,039.5 | 10,285.1 | 10,111.1 | 9,326.7 | 9,326.7 | 9,079.4 |
| Operating profit | 701.6 | 623.3 | 618.5 | 528.4 | 506.0 | 466.2 |
| Finance income | 22.3 | 10.7 | 10.4 | 12.4 | 12.4 | 11.6 |
| Finance expense | (90.2) | (65.3) | (73.2) | (87.5) | (64.2) | (66.6) |
| Profit on disposal of businesses | 0.9 | – | – | – | – | 13.6 |
| Profit before income tax | 634.6 | 568.7 | 555.7 | 453.3 | 454.2 | 424.8 |
| Income tax | (160.2) | (125.9) | (125.7) | (104.1) | (104.3) | (98.3) |
| Profit for the year attributable to the Company's equity holders | 474.4 | 442.8 | 430.0 | 349.2 | 349.9 | 326.5 |
| Basic earnings per share | 141.7p | 132.7p | 128.8p | 104.8p | 105.0p | 98.4p |
| Alternative performance measures† | ||||||
| Adjusted operating profit | 885.9 | 752.8 | 778.4 | 653.3 | 630.9 | 614.0 |
| Adjusted profit before income tax | 818.0 | 698.2 | 715.6 | 578.2 | 579.1 | 559.0 |
| Adjusted profit for the year | 616.8 | 542.5 | 550.5 | 440.6 | 441.3 | 429.9 |
| Adjusted earnings per share | 184.3p | 162.5p | 164.9p | 132.2p | 132.4p | 129.6p |
† Alternative performance measure
Δ Following the adoption of IFRS 16 ‘Leases’ with effect from 1 January 2019, because the Group has adopted the accounting standard using the modified retrospective approach to transition and has accordingly not restated prior periods, the results for the year ended 31 December 2019 are not directly comparable with those reported in the prior year under the previous applicable accounting standard, IAS 17 ‘Leases’. To provide meaningful comparatives, the results for the year ended 31 December 2019 have therefore also been presented under both IAS 17 and IFRS 16 accounting standards.
