7 April 2021
Hilton Food Group plc
Successful delivery in Australia and continued strategic growth
Hilton Food Group plc, the leading specialist international food packing business, today announces its preliminary results for the 53 weeks ended 3 January 2021.
Financial highlights
| | 2020 | 2019 | Change | |
| | 53 weeks to 3 January 2021 | 52 weeks to 29 December 2019 | 53 weeks reported | 52 weeks constant currency |
| | | | | |
| Volume1 (tonnes) | 469,110 | 371,715 | 26.2% | 23.8% |
| Revenue | £2,774.0m | £1,814.7m | 52.9% | 50.0% |
| | | | | |
| Adjusted results2 | | | | |
| Adjusted operating profit | £67.0m | £54.7m | 22.5% | 20.0% |
| Adjusted profit before tax | £61.1m | £49.7m | 22.8% | 20.2% |
| Adjusted basic earnings per share | 55.4p | 46.0p | 20.4% | 18.0% |
| | | | | |
| IFRS results | | | | |
| Operating profit | £66.9m | £55.8m | 19.9% | |
| Profit before tax | £54.0m | £43.2m | 25.2% | |
| Basic earnings per share | 48.6p | 40.5p | 20.0% | |
| Cash flows from operating activities
| £91.7m | £70.3m | 30.5% | |
| Net bank debt3 | £122.2m | £86.8m | | |
| Dividends paid and proposed in respect of the year | 26.0p | 21.4p | 21.5% | |
| | | | | |
Notes
| 1 | Volume includes 50% share of the Australian, Portuguese and Dutch joint venture activities |
| 2 | Adjusted results represent the IFRS results before deduction of acquisition intangibles amortisation and exceptional items and also IFRS 16 lease adjustments as detailed in the Alternative performance measures note 15. Unless otherwise stated financial metrics in the Chairman's statement, Chief Executive's summary and Performance and financial review refer to the Adjusted results |
| 3 | Net bank debt represents borrowings less cash and cash equivalents excluding lease liabilities |
Strategic highlights
| · | Turnover up 50.0%* with strong growth in Australia arising from: | ||
| | o | Joint venture transition period concluded with purchase of assets relating to the joint venture | |
| | o | A full year of the state-of-the art facility in Brisbane, Queensland | |
| · | New facility opened in Belgium for Ahold Delhaize with volume ramp up under way
| ||
| · | New Zealand facility scheduled to open in Q3 this year
| ||
| · | Committed to setting science-based target through the Science Based Targets initiative and signed the Business Ambition for 1.5°C pledge to net-zero by 2050
| ||
| · | Continued growth in protein diversification into plant-based, seafood and convenience foods | ||
Operating highlights
| · | Strong response to Covid-19 ensuring continuous supply to our retailer partners, keeping our factories open and our colleagues safe
|
| · | Volume growth of 23.8%* within which Australia grew 107.9%* and Europe grew 8.5%*
|
| · | Adjusted operating profit £67.0m up 20.0%* and basic earnings per share 55.4p up 18.0%*
|
| · | Strong operating cash generation of £91.7m up 30.5% supporting a robust balance sheet
|
| · | Significant £95.5m investment in facilities to support future growth |
* On a 52 week constant currency basis
Commenting on the results Chairman Robert Watson OBE, said:
"I am extremely proud of the commitment and resilience shown by the entire Hilton team during 2020 to adapt quickly to the challenges caused by Covid-19 in order to safeguard our people, keep our facilities open and support our customers. This response underpinned a strong performance with both volume and profit growth and we concluded our joint venture transition period in Australia and purchase of the related joint venture assets while marking our one year anniversary of the opening of our Queensland facility. In Europe we set up a new facility in Belgium during the year to supply Delhaize and continued to further diversify our product offering in the plant-based, seafood and convenience categories. As with all businesses there remain some uncertainties concerning the full impact of Covid-19, including potential recessionary risks, but our robust and sustainable business model and wide geographical spread make us believe we are well placed to meet any future challenges."
Enquiries
| Hilton Food Group | Tel: +44 (0) 1480 387214 |
| Philip Heffer, Chief Executive Officer | |
| Nigel Majewski, Chief Financial Officer | |
| | |
| Citigate Dewe Rogerson | Tel: +44 (0) 207 638 9571 |
| Angharad Couch | |
| Ellen Wilton | |
This announcement contains inside information.
Chairman's introduction
Feeding the nation during a global pandemic
The Covid-19 outbreak continues to present major challenges across the globe with ongoing uncertainty over its longevity and impact. We have therefore continued to partner with grocery retailers to help ensure the nation is fed. As part of the global food supply chain we were tasked with protecting our people, keeping our facilities open and supporting our retailer partners. All of our facilities remained fully operational and without interruption throughout the year. Lockdown including travel restrictions resulted in more cooking at home thereby creating higher demand for our products. Hilton's performance has therefore been a continuation of our business growth albeit at an increased level of activity together with specific measures introduced to manage our exposure to the virus. There has been continuous communication with key suppliers to ensure the continued supply of goods and services as well as alignment with our customers in our response. We are extremely proud of the commitment and resilience shown by the entire Hilton team to adapt quickly to the challenges caused by Covid-19 in order to safeguard our people, keep our facilities open and support our customers.
The health and wellbeing of our people is paramount. We established all necessary protocols to protect them and minimise contact, prioritising those that are most vulnerable to Covid-19. Travel by our colleagues was strictly managed and visitors minimised as were all movements within our facilities. Our office-based staff were able to quickly switch to effective remote working from home being supported as required including use of virtual meeting software with minimal business disruption. The introduction of these measures increased our costs although this was partly offset by lower travel costs.
We have not sought or received any governmental assistance or support including no use of furlough in our production facilities. There have been no redundancies and no Covid-related changes to employee pay and conditions, save that we have continued to support our employees during self-isolation. In addition, there have been no commercial changes in trading with our suppliers and customers. We are dependent on our key suppliers to maintain a continued supply of raw material and packaging materials and we are in daily contact with them to manage availability and identify key critical product lines which must be delivered and those that could be postponed.
Strategic progress
We have continued to make good progress with our strategic growth initiatives expanding both geographically and across the proteins. Our working relationship with Woolworths in Australia has evolved further with the end of the joint venture transition period and purchase of the assets relating to the joint venture. We reached agreement with Delhaize, a leading retailer in Belgium, to pack all its red meat requirements and operations started from an existing site in October 2020. This project represents a further extension of our working relationship with Ahold Delhaize. Development of our new facility in New Zealand is scheduled to open in Q3 this year. Our joint ventures continue to perform well with Dalco adding new customers and extending product ranges into new categories such as convenience foods and ready meals. Foods Connected continues to innovate and improve its software solutions offering with supply chain mapping a major focus area to help build greater transparency and developing a traceability tool for use in multiple supply chains.
We continue to successfully execute our strategy to grow and diversify and we continue to explore opportunities to develop our cross-category business in both domestic and overseas markets as well as applying our state-of-the-art skills and experience to deliver value to our customers.
Group performance
In 2020 volumes grew strongly in Australia as well as benefitting from the shift to home consumption arising from the pandemic maintaining a trend of continuous growth achieved in every year since Hilton's flotation in 2007. There was strong growth in operating profit and earnings per share despite Covid related costs. We continued to invest in people and infrastructure to support future growth across the Group.
Hilton generated strong operating cash flows during 2020 with, as expected, further significant investment in our facilities to increase capacity, improve operational efficiency and offer innovative solutions to our retailer partners. Hilton remains financially strong with significant cash balances and undrawn committed bank facilities operating well within our banking covenants.
Dividend policy
The Group has maintained a progressive dividend policy since flotation. The Board is satisfied that the Group has adequate headroom under its existing facilities and that it is appropriate to continue to operate this dividend policy. With the proposed final dividend of 19.0p per ordinary share, total dividends in respect of 2020 will be 26.0p per ordinary share, an increase of 21.5% compared to last year.
Our Board, purpose and governance
The Hilton Board is responsible for the long-term success of the Group and establishing its purpose, values and strategy aligned with its desired culture. Our purpose is to create efficiency and flexibility in the food supply chain through innovative and sustainable food manufacturing and supply chain solutions with the ambition to be the first choice partner for food retailers seeking excellence, insight and growth.
To achieve this the Board has an appropriate mix of skills, depth and diversity and a range of practical business experience, which is available to support and guide our management teams across a wide range of countries as well as having in place succession planning and maintaining a talent pipeline.
I was delighted to welcome Rebecca Shelley to the Hilton Board as an Independent Non-Executive Director on 1 April 2020. Her market-facing investor relations and communications skills and experience in food and retail sectors further strengthens our capabilities. I would like to thank my colleagues on the Board for their support, counsel and expertise during the year.
We remain committed to achieving good governance balanced against our desire to preserve an agile and entrepreneurial approach.
The Board takes its responsibilities very seriously to promote the success of the Company for the benefit of its stakeholders as a whole. We take the interests of our workforce and other stakeholders fully into account in Board discussions and decision making. Details of the Group's policies and procedures that have been implemented to enhance stakeholder and workforce engagement, which explain how these interests have influenced our decisions, are set out in the governance section of our Annual report.
Sustainability
Sustainability is at the heart of how we do business. We are actively engaging in dialogue with internal and external stakeholders, including NGOs, in order to ensure that our strategy is delivering and our reporting is clear and transparent. Globally the demands required by society in order to deliver a balanced, healthy and sustainable food supply chain are continuing to focus our attention. As a business we are committed to rising to these challenges and delivering for our customers. Our commitments include reducing the weight, and creating circular recycling of our packaging, achieving verified zero net deforestation for our raw materials, setting science-based targets to achieve net zero carbon across all of the food types we produce, and delivery of the UN Sustainable Development Goals relating to food produced on land and from the oceans.
Outlook and current trading
Hilton's operating performance since the beginning of 2021 has been in line with the Board's expectations. We continue to explore opportunities for further expansion in our domestic and overseas markets.
The Covid-19 outbreak continues to present major challenges across the globe and represents an ongoing risk for all our businesses. We can be confident that, with the roll-out of a vaccination programme, it should be possible during 2021 to start to ease the necessary measures we have introduced to manage our exposure to, and mitigate the impact of, this pandemic.
Hilton was not significantly impacted by the UK's departure from the EU.
Our short and medium term growth prospects are underpinned by previously announced new facilities in Belgium and New Zealand as well as further opportunities arising across our markets by the development of our cross-category business and the application of our supply chain management expertise.
Annual General Meeting
This year's AGM will be held at Hilton's offices at 2-8 The Interchange, Latham Road, Huntingdon, Cambridgeshire PE29 6YE in a hybrid format on 24 May 2021 at noon. Please refer to our website at www.hiltonfoodgroupplc.com/en/investors/shareholder-meeting-documents/ for further guidance which will be regularly updated as the AGM date approaches. Once again I would strongly encourage all shareholders to submit their proxy votes.
Robert Watson OBE
Chairman
6 April 2021
Chief Executive's summary
Managing through the pandemic
I would like to thank our employees for their extraordinary dedication and resilience during these most challenging and unprecedented times. I continue to be amazed and proud of the energy our teams always deliver and there can be no doubt that every one of our employees has gone the extra mile throughout the Covid-19 pandemic.
It is with much sadness that I announce the loss of two colleagues earlier this year in Hilton Seafood. Our thoughts are very much with their families who we continue to support at this most difficult of times. We also pass on our heartfelt condolences to all of our colleagues who have lost loved ones during this dreadful pandemic.
Strategic objectives
Our strategy continues to be to support our customers' brands and their development in local markets thereby achieving long-term sustainable customer and shareholder value through:
| · | Growing volumes and extending product ranges supplied and services provided to its existing customers;
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| · | Optimising use of assets and investing in new technology to deliver competitive advantage to our customers;
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| · | Maintaining a vigilant focus on food safety and integrity and reducing unit costs, while improving product quality and service provision; and
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| · | Entering new territories and markets either with new customers or in partnership with our existing customers.
|
This approach combined with a strong reputation, well-invested modern facilities and a robust balance sheet has generated growth over many years. We will continue to pursue both geographical expansion and range extension, whilst at the same time actively developing, enriching, deepening and expanding the scope of our existing business partnerships, playing a full and proactive role in supporting our customers and the successful development of their brands. We have successfully expanded our product range into new proteins and categories such as seafood, vegetarian, sous vide, food service and fresh convenience foods. We are responding to the Covid-19 challenge of protecting our people, feeding the nation and supporting the demands of our customers.
Business model
The Hilton business model is well proven and sustainable, whilst being relatively simple and straightforward. We build and operate large scale, extensively automated and robotised food processing, packing and logistics facilities for major international retailers largely on a dedicated basis. Through economies of scale we are able to secure significant efficiency savings for our customers whilst retaining a competitive margin. Our business is based on a total partnership approach with customers and suppliers forged over many years. The wide geographical spread of the Group's operations is a significant strength of our business model. Hilton is well placed in the current Covid climate as we almost exclusively serve the retail sector.
We operate facilities in eight European countries and three facilities in Australia, each run by a local management team enhanced by specialist central leadership, expertise, advice and support. Our businesses operate under the terms of long-term supply agreements with our retailer partners, either on a cost plus, packing rate or volume-based reward basis. These contractual arrangements, combined with our customer dedication, serve to maximise achievable volume throughput whilst minimising unit packing costs thereby delivering value to our customers. In Portugal and the Netherlands, facilities are operated under joint venture companies in which we share the profits. Products from our facilities are sold in fourteen European countries and Australia.
Raw materials are sourced, in conjunction with our retail partners, from a combination of local sources and a wide international base of proven suppliers. It is then processed, packed and delivered to the retailers' distribution centres or stores. Our plants are highly automated and use advanced robotics for the storage of raw materials and finished products. Robotics technology has been extended in recent years both in the production environment and to the sorting of finished products by retailer store order, achieving material supply chain efficiencies for our customers.
We seek to keep ourselves at the forefront of the food packing industry, including becoming more sustainable and environmentally friendly, which helps ensure our continued competitiveness. We constantly look to drive efficiencies, always maintaining a pipeline of clear identifiable cost reduction initiatives and an open minded approach designed to continually challenge the status quo. We consider our modern, very well-invested facilities to be a key factor in keeping unit packing costs as low as possible. We invest continuously across all areas of our business, including raw materials sourcing, packaging materials design, increased processing efficiency and storage solutions and updating our IT infrastructure. Group capital expenditure over the last 5 years totalled £316m.
Under the long-term supply agreements we have in place with our customers, the parameters of our revenue are clearly defined. As well as income derived from the supply of retail packed food products, there are also provisions whereby our income can be increased or decreased subject to achievement of certain pre-agreed and pre-defined key performance measures and targets designed to align our objectives with those of our customers.
We are a committed and loyal partner with a continuing record of delivering value through quality products with the highest levels of food safety, traceability and integrity, whilst providing a range of services which enable our customers to evolve and improve their food supply chain management. Our customer base comprises high quality retailers and our in-depth understanding of our customers' needs, together with those of their consumers, enables us to play an active role in managing their food supply chains whilst providing agile solutions to supply chain challenges as they arise. As our customers' markets change and competition increases, we need to keep a constant focus on the challenges they face so we can put forward flexible solutions, together with continuing increases in efficiency and cost competitiveness. This flexible approach and understanding of our local markets remains one of our core strengths.
As well as our ability to provide excellent execution locally, we also have at our disposal a wide and deep expertise on a number of areas of specialism, such as engineering, new product development, food related IT applications, category management support, logistics and market intelligence. We are able to apply these skills to a number of markets to support our customers in a cost-effective way.
Business development
The Group's expansion is based on its established and proven track record, international reputation and experience and the recognised success of the close partnerships we have forged and maintained with successful retail partners over many years. Hilton's business model has proved successful in Europe and Australia supplemented by targeted acquisitions. We have demonstrated that this business model is capable of being successfully transferred into new countries, adapted with our local customers to meet their specific requirements.
2020 Performance overview
2020 saw a continuation of strong year-on-year sales and volume growth driven by both expansion as well as the shift to home consumption arising from the Covid pandemic.
Good progress was made in Europe across all our red meat, fish, vegetarian/vegan and fresh food categories benefitting from consumers eating out less often due to the ongoing impact of Covid. There was a positive performance in the UK. We have started to pack chicken in Sweden and Denmark. A facility in Belgium opened in October and is proceeding in line with our expectations. Performance improved at our SV Cuisine business and the Dalco joint venture continues to perform strongly.
In Australia we successfully rolled out the Queensland facility increasing volumes to targeted levels leading to strong revenue growth. The joint venture was successfully transitioned with the consequence that sales in the second half of the year from the two relevant facilities were recognised on a fully consolidated basis including attributable turnover. The development of the New Zealand facility is scheduled to open in the third quarter of 2021.
Overall volume which includes the 50% share of the Australian, Portuguese and Dutch joint venture activities increased by 26.2% to 469,110 tonnes (2019: 371,715 tonnes). In 2020 72% of the Group's volumes were produced in countries outside the UK. Adjusted operating profit increased by 22.5% although the overall operating margin decreased to 2.4% (2019: 3.0%) which is mainly attributable to the recognition of revenue from the two Australian joint venture facilities following their transition to Hilton ownership and higher Australian raw material prices. The margin per kg was slightly lower at 14.3p (2019: 14.7p). Our customer service level remained best in class at 95.4% (2019: 96.8%) reflecting an outstanding performance during the challenging Covid period.
The wide geographical spread of the Group increases its resilience by minimising its reliance on any one individual economy. Hilton's results are reported in Sterling and are therefore sensitive to changes in the value of Sterling compared to the range of overseas currencies in which the Group trades. During 2020 the impact of average exchange rates on our results compared with 2019 was marginal.
Sustainability
We demonstrated significant progress towards our targets during 2020. On our journey to sustainable and circular recycling of our packaging materials we have overachieved our target for recycled content and 98% of our beef mince is now packed in recyclable mono plastic trays. We have committed to set a science-based target through the Science Based Targets initiative and signed the Business Ambition for 1.5°C pledge, directing our efforts towards a net zero carbon footprint before 2050. We helped negotiate a 2020 cut-off for all forms of deforestation within the Brazilian supply chain for salmon feed, and for it to be verified by robust third party verification processes.
Segment performance
Europe
Adjusted operating profit of £62.6m (2019: £55.2m) on turnover of £1,989.6m (2019: £1,724.9m)
This operating segment covers the Group's businesses in the UK, Ireland, Holland, Belgium, Sweden, Denmark and Central Europe together with joint ventures in the UK, Holland and Portugal. Volume growth was 8.5% on a 52 week basis driven primarily by a full year of increased UK meat participation and higher demand due to increased consumption at home due to Covid. Sales on a 52 week constant currency basis grew by 12.6% and operating profit by 10.6% reflecting the higher volumes. Operating margins eased slightly to 3.1% (2019: 3.2%) although operating profit margin per kg increased to 18.0p (2019: 17.6p).
Australasia
Adjusted operating profit of £17.2m (2019: £9.6m) on turnover of £784.4m (2019: £89.8m)
In Australia the Group operated a joint venture with Woolworths in the first half of 2020 under which it earned a 50% share of the agreed service fees based on the volume of retail packed meat delivered to Woolworths' stores produced by its plants in Bunbury, Western Australia and Melbourne, Victoria. In 2018 we took full operational control of these plants and, from July 2020, transitioned to Hilton's ownership through the purchase of the assets relating to the joint venture.
Performance was driven by volume growth of 107.9% on a 52 week basis attributable to a full year of our new Brisbane facility. Constant currency sales on a 52 week basis increased by 769% which is attributable to the additional Brisbane volume and also the recognition of revenue from the two Australian joint venture facilities following their transition to Hilton ownership. Operating profit increased to £17.2m (2019: £9.6m) although the operating profit margin per kg decreased to 14.2p (2019: 16.7p) reflecting the transition from the joint venture to full ownership.
Resourcing for growth: culture and people
Our people are at the heart of our success and they have risen exceptionally to the challenges of 2020. Against the backdrop of the Covid-19 pandemic our teams have dedicated themselves to feeding our nations families. In partnership with our customers we have ensured that supermarket shelves were stocked and record volumes delivered.
Our teams across the countries we operate in, have worked tirelessly to keep our people safe. We have continually reviewed our policies and procedures through the pandemic. We have invested in our facilities, systems and equipment and we have ensured that our people are fully engaged as we have implemented new ways of working. I am proud of how we have worked as one team in sharing best practice across our international operating companies and quickly introduced innovative approaches in these most challenging times.
I am delighted that this year's engagement survey results have improved against what was a strong level of engagement in 2019. Our surveys provide invaluable feedback on which our operating companies base plans that continuously improve employee satisfaction and our employee value proposition.
We have also continued to invest in our people's development through our leadership development programmes and provide all our teams with the training they need to perform their roles safely and effectively.
We are committed to providing an inclusive working environment where everyone feels valued, respected and able to fulfil their potential. We recognise that people from different backgrounds, countries and experiences bring tremendous benefits to our business and each other. During 2020 in collaboration with leaders and colleagues across our business we developed our inclusion and diversity strategy. As part of that strategy I am pleased to announce that in 2021 we will become a strategic sponsor of Meat Business Women the global professional networking movement for progressive women working in the meat sector. The Group currently employs over 5,300 colleagues across Europe and Asia Pacific.
We work as "one team" with local empowered leadership teams dedicated to the needs of our customers and equipped with excellent local consumer and market insight. These teams provide flexible and rapid support which has been a key strength in these pandemic conditions. Our local teams are supported by our Group capability which provides specialist expertise and support, enables the sharing of best practice and business growth.
The Board fully understands and appreciates just how much our progress relies on the effort, personal commitment, enthusiasm, enterprise and initiative of our employees. I would like to take this opportunity, on behalf of the Board, to personally thank them all for both for their dedicated efforts during 2020 and their continuing commitment to the Group's ongoing growth and development.
Past and future trends
Over recent decades major retailers have progressively rationalised their supply base through large scale, centralised packing solutions capable of producing private label packed fresh food products. This achieves lower costs with consistent high food safety, food integrity, traceability and quality standards allowing supermarket groups to focus on their core retail business whilst addressing consumers' continuing requirement for quality and value. This trend towards increased use of centralised packing solutions is likely to continue, albeit at different speeds across the world, representing potential future geographical expansion opportunities for Hilton.
Consumer buying patterns are evolving with more seafood and vegetarian proteins being eaten. Through Hilton's diversification into these proteins we are well placed to grow our business.
Philip Heffer
Chief Executive Officer
6 April 2021
Performance and financial review
Summary of Group performance
This performance and financial review covers the main highlights of the Group's financial performance and position in 2020. Hilton's overall financial performance saw continued strong growth in volumes, sales, profitability and basic earnings per share. Cash flow generation was strong supporting our ongoing significant investment in facilities.
Basis of preparation
The Group is presenting its results for the 53 week period ended 3 January 2021, with comparative information for the 52 week period ended 29 December 2019. The financial statements of the Group are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The Board uses adjusted profit before IFRS 16, acquired intangibles amortisation and exceptional items to measure performance as detailed in the Alternative performance measures note 15 and considers this metric better reflects the underlying performance of the business. The adjustment for acquisition intangibles amortisation of £2.4m (2019: £2.4m) is in connection with the 2017 Seachill acquisition. Unless otherwise stated financial metrics in the Financial highlights, Chairman's introduction, Chief Executive's summary and this Performance and financial review refer to the adjusted results.
2020 Financial performance
Volume and revenue
Volumes, which include 50% share of the Australian, Portuguese and Dutch joint ventures activities, grew by 26.2% (23.8% on a 52 week basis) in the year driven by strategic growth in Australia with higher UK volumes and higher demand due to increased consumption at home due to Covid also contributing. Additional details of volume growth by business segment are set out in the Chief Executive's summary. Revenue increased 52.9% and by 50.0% on a 52 week constant currency basis representing the volume growth and also the recognition of revenue from the two Australian joint venture facilities following their transition to Hilton ownership.
Australia was a significant driver of top line growth where volume grew by 107.9% with 61.7% of this from a full year of our new Brisbane facility. Constant currency sales on a 52 week basis increased by 769% of which 408% is attributable to the additional Brisbane volume and 361% from the recognition of revenue from the two joint venture facilities following their transition to Hilton ownership.
Operating profit and margin
Operating profit of £67.0m (2019: £54.7m) was 22.5% higher than last year and 20.0% higher on a 52 week constant currency basis driven by both expansion as well as the shift to home consumption arising from the Covid pandemic. IFRS operating profit was 19.9% higher at £66.9m (2019: £55.8m). The operating profit margin in 2020 declined to 2.4% (2019: 3.0%) mainly due to the recognition of revenue from the two Australian joint venture facilities following their transition to Hilton ownership and higher Australian raw material prices. The operating profit per kilogram of packed food sold was little changed at 14.3p (2019: 14.7p).
Net finance costs
Net finance costs increased to £5.9m (2019: £5.0m) reflecting higher borrowings that financed our expansion programme. Interest cover in 2020 was unchanged at 11 times (2019: 11 times). IFRS net finance costs were £12.8m (2019: £12.6m).
Taxation
The taxation charge for the period was £13.5m (2019: £10.1m). The effective tax rate was 22.0% (2019: 20.2%) reflecting a change in the mix of profits taxed at different rates in overseas countries, particularly Australia. The IFRS taxation charge was £12.0m (2019: £8.0m) with an effective tax rate of 22.2% (2019: 18.5%).
Net income
Net income, representing profit for the year attributable to owners of the parent of £45.3m (2019: £37.6m) was 20.7% higher than last year and 18.2% higher on a 52 week constant currency. IFRS net income was £39.7m (2019: £33.1m).
Earnings per share
Basic earnings per share 55.4p (2019: 46.0) was 20.4% higher than last year and 18.0% on a 52 week constant currency basis. IFRS basic earnings per share were 48.6p (2019: 40.5p). Diluted earnings per share were 47.9p (2019: 40.1p).
Earnings before interest, taxation, depreciation and amortisation (EBITDA)
EBITDA, which is used by the Group as an indicator of cash generation, increased by 32.3% to £106.0m (2019: £80.1m) reflecting the growth in profitability following significant investment and by 29.8% on a 52 week constant currency basis. IFRS EBITDA was £126.5m (2019: £102.4m).
Free cash flow and net debt position
Operating cash flow was strong in 2020 with cash flows from operating activities of £91.7m (2019: £70.3m). IFRS free cash inflow after capital expenditure of £95.5m and before dividends and financing was £0.6m (2019: outflow £28.5m).
The Group closing net bank debt was £122.2m (2019: £86.8m) reflecting bank borrowings of £246.0m net of cash balances of £123.8m. Net debt including lease liabilities was £367.4m (2019: £271.5m).
At the end of 2020 the Group had undrawn committed bank facilities under its syndicated banking facilities of £51.5m (2019: £71.1m). These banking facilities are subject to covenants comprising minimum tangible net worth, net bank debt to EBITDA and interest cover. Headroom under these covenants at the end of 2020 was at least 50% for all these metrics.
The resilience of the Group in the face of the uncertain challenges presented by Covid-19 has been assessed by applying significant downside sensitivities to the Group's cash flow projections. Allowing for these sensitivities and potential mitigating actions the Board is satisfied that the Group has adequate headroom under its existing committed facilities and will be able to continue to operate well within its banking covenants.
Dividends
The Group has maintained a progressive dividend policy since flotation. The Board is satisfied that the Group has adequate headroom under its existing facilities that it is appropriate to continue to operate this dividend policy and has recommended a final dividend of 19.0p per ordinary share in respect of 2020. This, together with the interim dividend of 7.0p per ordinary share paid in November 2020, represents a 21.5% increase in the full year dividend, as compared with last year. The final dividend, if approved by shareholders, will be paid on 2 July 2021 to shareholders on the register on 4 June 2021 and the shares will be ex dividend on 3 June 2021.
Key performance indicators
How we measure our performance against our strategic objectives
The Board monitors a range of financial and non-financial key performance indicators (KPIs) to measure the Group's performance over time in building shareholder value and achieving the Group's strategic priorities. The nine headline KPI metrics used by the Board for this purpose, together with our performance over the past two years, is set out below:
| | 2020 (53 weeks) | 2019 (52 weeks) | Definition, method of calculation and analysis |
| Financial KPIs | | | |
| Revenue growth (%) | 52.9% | 10.0% | Year on year revenue growth expressed as a percentage. The 2020 increase mainly reflected volume growth and the recognition of revenue following the transition of the two Australian JV facilities to Hilton ownership. |
| Adjusted operating profit margin (%) | 2.4% | 3.0% | Adjusted operating profit expressed as a percentage of turnover. The operating profit margin % in 2020 was lower mainly due to the recognition of revenue following the transition of the two Australian JV facilities to Hilton ownership and higher Australian raw material prices. |
| Adjusted operating profit margin (pence per kg) | 14.3 | 14.7 | Adjusted operating profit per kilogram processed and sold in pence. There is little change in 2020 compared with 2019. |
| Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) (£m) | 106.0 | 80.1 | Adjusted operating profit before depreciation and amortisation. The increase reflected the growth in profitability following significant investments. |
| Free cash flow (£m)
| 0.6 | (28.5) | IFRS cash in/(out)flow before minorities, dividends and financing. Operating cash flow generation in 2020 increased in line with EBITDA with facilities capex spend at similar levels to 2019. |
| Net debt / EBITDA ratio (%) | 115.3% | 108.4% | Year end net bank debt as a percentage of adjusted EBITDA. The increase is due to higher bank borrowings used to finance our expansion programme. |
| Non-financial KPIs | | | |
| Growth in sales volumes (%) | 26.2% | 7.8% | Year on year volume growth. Volume growth was seen due to strategic growth in Australia, higher UK volumes and higher demand through increased consumption at home due to Covid. |
| Employee and labour agency costs (pence per kg) | 57.2 | 51.8 | Labour cost of producing food products as a proportion of volume. The increase reflects additional Covid related costs, start-up costs in Belgium and the Australia JV transition. |
| Customer service level (%) | 95.4% | 96.8% | Packs of product delivered as a % of the orders placed. The customer service level remained best in class reflecting an outstanding performance during the challenging Covid period. |
In addition, a much wider range of financial and operating KPIs are continuously tracked at business unit level.
Going concern statement
The Directors have performed a detailed assessment, including a review of the Group's budget for the 2021 financial year and its longer term plans, including consideration of the principal risks faced by the Group. The evolving Covid-19 outbreak has led to increased demand for protein-based products produced by the Group. We established business continuity plans and flexible supply models in order to continue to meet this increased demand. The resilience of the Group in the face of the uncertain challenges presented by Covid-19 has been assessed by applying significant downside sensitivities to the Group's cash flow projections. Allowing for these sensitivities and potential mitigating actions the Board is satisfied that the Group is able to continue to operate well within its banking covenants and has adequate headroom under its existing committed facilities which do not expire until October 2022. The Directors are satisfied that the Company and the Group have adequate resources to continue to operate and meet its liabilities as they fall due for the foreseeable future, a period considered to be at least 12 months from the date of signing these financial statements. For this reason they continue to adopt the going concern basis for preparing the financial statements.
The Group's bank borrowings as detailed in the financial statements and the principal banking facilities, which support the Group's existing and contracted new business, are committed. The Group is in full compliance with all its banking covenants and based on forecasts and sensitised projections is expected to remain in compliance. Future geographical expansion which is not yet contracted, and which is not built into our internal budgets and forecasts, may require additional or extended banking facilities and such future geographical expansion will depend on our ability to negotiate appropriate additional or extended facilities, as and when they are required.
The Group's internal budgets and forward forecasts, which incorporate all reasonably foreseeable changes in trading performance, are regularly reviewed by the Board and show that it will be able to operate within its current banking facilities, taking into account available cash balances, for the foreseeable future.
Viability statement
In accordance with provision 31 of the 2018 UK Corporate Governance Code, the Directors confirm that they have a reasonable expectation that the Group will continue to operate and meet its liabilities, as they fall due, for the three years ending in December 2023. A period of three years has been chosen for the purpose of this viability statement as it is aligned with the Group's three year plan, which is based on the Group's current customers and does not incorporate the benefits from any potential new contract gains over this period.
The Directors' assessment has been made with reference to the Group's current position and strategy taking into account the Group's principal risks, including those in relation to Covid-19, and how these are managed. The strategy and associated principal risks, which the Directors review at least annually, are incorporated in the three year plan and such related scenario testing as is required. The three year plan makes reasoned assumptions in relation to volume growth based on the position of our customers and expected changes in the macroeconomic environment and retail market conditions, expected changes in food raw material, packaging and other costs, together with the anticipated level of capital investment required to maintain our facilities at state-of-the-art levels. The three year plan assumes that bank facilities are refinanced on comparable terms to existing arrangements and the Board expects facilities to be renegotiated prior to their expiry in October 2022.
Cautionary statement
This Strategic report contains forward-looking statements. Such statements are based on current expectations and assumptions and are subject to risk factors and uncertainties which we believe are reasonable. Accordingly Hilton's actual future results may differ materially from the results expressed or implied in these forward-looking statements. We do not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Nigel Majewski
Chief Financial Officer
6 April 2021
Risk management and principal risks
Risks and risk management
In accordance with provision 28 of the 2018 UK Corporate Governance Code the Directors confirm that they have carried out a robust assessment of the emerging and principal risks facing the Group that might impede the achievement of its strategic and operational objectives as well as affect performance or cash position. As a leading food processor in a fast moving environment it is critical that the Group identifies, assesses and prioritises its risks. The result of this assessment is a statement of the principal risks facing the Group together with a description of the main controls and mitigations that reduce the effect of those risks were they to crystallise. This, together with the adoption of appropriate mitigation actions, enables us to monitor, minimise and control both the probability and potential impact of these risks.
How we manage risk
Responsibility for risk management across the Group, including the appropriate identification of risks and the effective application of actions designed to mitigate those risks, resides with the Board which believes that a successful risk management framework carefully balances risk and reward, and applies reasoned judgement and consideration of potential likelihood and impact in determining its principal risks. The Group takes a proactive approach to risk management with well-developed structures and a range of processes for identifying, assessing, prioritising and mitigating its key risks, as the delivery of our strategy depends on our ability to make sound risk informed decisions.
Risk management process and risk appetite
The Board believes that in carrying out the Group's businesses it is vital to strike the right balance between an appropriate and comprehensive control environment and encouraging the level of entrepreneurial freedom of action required to seek out and develop new business opportunities; but, however skilfully this balance between risk and reward is struck, the business will always be subject to a number of risks and uncertainties, as outlined below.
All types of risk applicable to the business are regularly reviewed and a formal risk assessment is carried out to highlight key risks to the business and to determine actions that can reasonably and cost effectively be taken to mitigate them. The Group's risk register is compiled through combining the set of business unit risk registers supplemented by formal interviews with senior executives and Directors of the Group. The Group has a Risk Management Committee which reports regularly to the Audit Committee and Board on the substance of the risk assessment and any changes to the nature of those risks or changes to the likelihood or materiality of the risk in question. The Risk Management Committee also reviews progress in control development and implementation of those key controls related to principal risks listed in this section of the report. The Group's internal audit function derives its risk based assurance plan on the controls after considering the risk assessment and reports its findings to the Audit Committee. The Risk Management Committee also oversees the scenario based business continuity management exercises.
Not all the risks listed are within the Group's control and others may be unknown or currently considered immaterial, but could turn out to be material in the future. These risks, together with our risk mitigation strategies, should be considered in the context of the Group's risk management and internal control framework, details of which are set out in the Corporate governance statement. It must be recognised that systems of internal control are designed to manage rather than completely eliminate any identified risks.
Risk management during 2020
Global pandemic
The current Covid-19 pandemic continues to present major challenges for people and economies across the globe. Food production is a key industry so our challenge was to keep our facilities open, as part of an integrated supply chain, to ensure that our retailer partners are able to adapt to consumer demand for protein-based products whilst at the same time keeping our people safe. We established business continuity and flexible buy models and supply options, which means that we continued to play our part in feeding the nation and supporting ongoing demand. The dedication and resilience of our teams was tested as we responded to these challenges.
The health and wellbeing of our people is paramount and we have established a number of protocols to protect our people and to minimise contact. We are prioritising those that are most susceptible to Covid-19 including those with underlying health conditions. Travel by our colleagues, in line with government restrictions, is strictly managed as are visitors to, and movements within, our facilities together with extensive cleaning regimes and hand-sanitising stations. We have plans in place to respond to any virus spread within our facilities and to mitigate any resourcing shortfall through additional use of temporary labour including those available from other sectors.
We are dependent on our key suppliers to maintain a continued supply of raw material and packaging materials and we are in daily contact with them to manage availability and identify key critical product lines which must be delivered and those that could be postponed. There have not been any significant issues experienced to date.
We have managed the challenges well and are confident that through our local operating model and financial strength we are well placed.
Brexit
Hilton Food Group planned for the potential impact of Brexit since the outcome of the vote in 2016. Our exposure was mitigated through our predominantly local sourcing and operating model. Through the transition period, and as various challenges have arisen, our risk assessments and mitigation plans have evolved as necessary. Since the confirmation of the EU-UK Trade & Cooperation Agreement at the end of December 2020, our dedicated Brexit team has been focused on implementing the required changes to minimise disruption to our operations.
Impacts will continue to develop through 2021 as various deferments and grace periods expire, and the full conditions of the new UK-EU relationship are implemented. It is expected that these changes will have a greater impact on the food sector, due to the nature of just in time supply chains and sanitary & phytosanitary requirements specific to food products. The ending of freedom of movement could cause disruption in the future by depleting the availability of our workforce which could be further compounded by any potential requirement for electronic health passports.
As a business we continue to prioritise the status of our EU employees in the UK, and vice versa in the EU, secure supply chains to ensure ongoing service to customers and ensure ongoing regulatory compliance as EU & UK standards may diverge. We continue to work with industry bodies and government forums on developing mitigations for Brexit-related risks as they arise. Engagement with key internal and external stakeholders remains a vital process in managing the potential financial and operational impacts from border delays, and increased friction to trade. As the post-Brexit landscape develops, the Group remains proactive in reviewing raw material sourcing regions and transport routes.
Overall we still believe that the Hilton business is sufficiently resilient to withstand these uncertainties whilst minimising disruption.
Principal risks
The most significant business risks that the Group faces, together with the measures we have adopted to mitigate these risks, are outlined in the table below. This is not intended to constitute an exhaustive analysis of all risks faced by the Group, but rather to highlight those which are the most significant, as viewed from the standpoint of the Group as a whole.
| | |
| Description of risk
| The Group strategy focuses on a small number of customers who can exercise significant buying power and influence when it comes to contractual renewal terms at 5 to 15 year intervals.
|
| Its potential impact
| The Group has a relatively narrow, but expanding, customer base, with sales to subsidiary or associated companies of the Tesco, Ahold and Woolworths groups still comprising the larger part of Hilton's revenue. The larger retail chains have over many years increased their market share of meat products in many countries, as customers continue to move away from high street butchers towards one stop convenience shopping in supermarkets. This has increased the buying power of the Group's customers which in turn increases their negotiating power with the Group, which could enable them to seek better terms over time.
|
| Risk mitigation measures and strategies adopted
| The Group is progressively widening its customer base and has maintained a high level of investment in state-of-the-art facilities, which together with management's continuous focus on reducing costs, allow it to operate very efficiently at very high throughputs and price its products competitively. Hilton operates a decentralised, entrepreneurial business structure, which enables it to work very closely and flexibly with its retail partners in each country, in order to achieve high service levels in terms of orders delivered, delivery times, compliance with product specifications and accuracy of documentation, all backed by an uncompromising focus on food safety, product integrity and traceability assurance. Hilton has long term supply agreements in place with its major customers, with pricing either on a cost plus or agreed packing rate basis. |
| Description of risk
| The Group's growth potential may be affected by the success of its customers and the growth of their packed food sales. |
| Its potential impact
| The Group's products predominantly carry the brand labels of the customer to whom packed food is supplied and it is accordingly dependent on its customers' success in maintaining or improving consumer perception of their own brand names and packed food offerings.
|
| Risk mitigation measures and strategies adopted
| The Group plays a very proactive role in enhancing its customers' brand values, through providing high quality, competitively priced products, high service levels, continuing product and packaging innovation and category management support. It recognises that quality and traceability assurance are integral to its customers' brands and works closely with its customers to ensure rigorous quality assurance standards are met. It is continuously measured by its customers across a very wide range of parameters, including delivery time, product specification, product traceability and accuracy of documentation and targets demanding service levels across all these parameters. The Group works closely with its customers to identify continuing improvement opportunities across the supply chain, including enhancing product presentation, extending shelf life and reducing wastage at every stage in the supply chain.
|
| Description of risk
| The progress of the Group's business is affected by the macroeconomic environment and levels of consumer spending which is influenced by publicity including reports concerning the risks of consuming certain foods and the decline in the consumption of meat in the countries in which it operates.
|
| Its potential impact
| Consumer demand may drop due to food scares and economic conditions. No business is immune to difficult economic climates and the consequent pressure on levels of consumer spending. |
| Risk mitigation measures and strategies adopted
| With a sound business model including successful diversification within the vegetarian market, strong retail partners and a single minded focus on minimising unit packing costs, whilst maintaining high levels of product quality and integrity, the Group has made continued progress over recent difficult economic periods. It expects to be able to continue to make progress. |
| Description of risk
| As Hilton continues to grow there is more reliance on key personnel and their ability to manage growth, change, integration and compliance across new legislative and regulatory environments. This risk increases as the Group continues to expand with new customers and into new territories with potentially greater reliance on stretched skilled resource and execution of simultaneous growth projects.
|
| Its potential impact
| The Group may struggle to meet key project objectives and fail to adhere to regulatory and legislative requirements, which in turn detracts from our performance delivery for our customers.
|
| Risk mitigation measures and strategies adopted
| The Group carefully manages its skilled resources including succession planning and maintaining a talent pipeline. The Group is evolving its people capability balanced with an appropriate management structure within the overall organisation. Hilton continues to invest in on-the-job training and career development, whilst recruiting high quality new employees, as required, to facilitate the Group's ongoing growth and in deploying resource to support the growth projects appropriately. Appointment of additional key resources and alignment of structures have supported the enhancement of project management control and oversight. Control systems embedded in project management enable the risks of growth to be appropriately highlighted and managed. To underscore our efforts we have active relationships with strong industry experts across all areas of business growth. |
| Description of risk
| The Group's business strength is affected by its ability to maintain a wide and flexible global food supply base operating at standards that can continuously achieve the specifications set by Hilton and its customers.
|
| Its potential impact
| The Group is reliant on its suppliers to provide sufficient volume of products, to the agreed specifications, in the very short lead times required by its customers, with efficient supply chain management being a key business attribute. The Group sources certain of its food requirements globally. Tariffs, quotas or trade barriers imposed by countries where the Group procures meat, or which they may impose in the future, together with the progress of World Trade Organisation talks and other global trade developments, could materially affect the Group's international procurement ability and therefore potentially impact our ability to meet agreed customer service levels.
|
| Risk mitigation measures and strategies adopted
| The Group maintains a flexible global food supply base, which is progressively widening as it expands and is continuously audited to ensure standards are maintained, so as to have in place a wide range of options should supply disruptions occur. |
| Description of risk
| Contamination within the supply chain including outbreaks of disease and feed contaminants affecting livestock and fish. |
| Its potential impact
| This will potentially affect the Group's ability to procure sufficient quantities of safe raw material.
|
| Risk mitigation measures and strategies adopted
| The Group sources its food from a trusted raw material supply base, all components of which meet stringent national, international and customer standards. The Group is subject to demanding standards which are independently monitored in every country and reliable product traceability and high welfare standards from the farm to the consumer are integral to the Group's business model. The Group ensures full traceability from source to packed product across all suppliers. Within our factories, Global Food Safety Initiative (GFSI) benchmarked food safety standards and our own factory standard assessments drive the enhancement of the processes and controls that are necessary to ensure that the risks of contaminants throughout the processing, packing and distribution stages are mitigated and traceable should a risk ever materialise. |
| Description of risk
| Significant incidents such as fire, flood, pandemic or interruption of supply of key utilities could impact the Group's business continuity.
|
| Its potential impact
| Such incidents could result in systems or manufacturing process stoppages with consequent disruption and loss of efficiency which could impact the Group's sales.
|
| Risk mitigation measures and strategies adopted
| The Group has robust business continuity plans in place including sister site support protocols enabling other sites to step in with manufacturing and distribution of key product lines where necessary. Continuity management systems and plans are suitably maintained and adequately tested including building risk assessments and emergency power solutions. There are appropriate insurance arrangements in place to mitigate against any associated financial loss.
|
| Description of risk
| The Group's IT systems could be subject to cyber attacks, including ransomware and fraudulent external email activity. These kinds of attacks are generally increasing in frequency and sophistication.
|
| Its potential impact
| The Group's operations are underpinned by a variety of IT systems. Loss or disruption to those IT systems or extended times to recover data or functionality could impact the Group's ability to effectively operate its facilities and affect its sales and reputation.
|
| Risk mitigation measures and strategies adopted
| The Group has a robust IT control framework, minimum operating standards, including working towards National Institute of Technology requirements, all of which are tested frequently by internal staff and by specialist external bodies. This framework is established as the key control to mitigate cyber risk and is applied consistently throughout the Group. The increased prominence of IT risk is mitigated by investments in IT infrastructure and now forms a regular part of the Group Risk Management Committee agenda and presentations to the Board. In accordance with Group strategy IT risk is considered when looking at new ventures and control measures implemented in new sites follow the Group common standards. There is internal training and resources available with emphasis on prevention, user awareness and recovery. Increasingly, IT forms part of site business continuity exercises which test and help develop the capacity to respond to possible crises or incidents. The technical infrastructure to prevent attacks, safeguard data and the resilience to recover are continuously developed including yearly assessments to meet emerging threats. IT systems including financial and banking systems are configured to prevent fraudulent payments. There are monthly IT security reviews to ensure compliance with expected levels of applications updates, and of server and data centres together with yearly penetration testing. |
| Description of risk | A significant breach of health & safety legislation as complexity increases in managing sites across different product groups and geographies.
|
| Its potential impact
| Such breach in health & safety legislation could lead to reputational damage and regulatory penalties, including restrictions on operations, fines or personal litigation claims. |
| Risk mitigation measures and strategies adopted
| The Group has established robust health & safety processes and procedures across its operations, including a Group oversight function which provides key guidance and support necessary to strengthen monitoring, best practice and compliance. The Group has also rolled out an enhanced standardised safety framework. Health and safety performance is reviewed regularly by the Board. |
| Description of risk
| The Group's business is affected by climate change risks comprising both physical and transition risks. Physical risks include long-term rises in temperature and sea levels as well as changes to the frequency and severity of extreme weather events. Transition risks include policy changes, reputational impacts, and shifts in market preferences and technology. |
| Its potential impact
| Potential physical impacts from climate change could include a higher incidence of extreme weather events such as flooding, drought, and forest fires that could disrupt our supply chains and potentially impact production capabilities, increase costs and add complexity. Action taken by societies could reduce the severity of these impacts.
Governmental efforts to mitigate climate change may lead to policy and regulatory changes as well as shifts in consumer demand. The potential transitional impacts include additional costs of low greenhouse gas emission farming systems, and the potential of carbon pricing aimed at shifting consumers to lower carbon foods, which may reduce the profitability of some of our products. Additionally our reputation could be impacted if we are not active in reducing the climate impacts of our operations and supply chains, resulting in lower demand for our products.
Additionally our reputation could be impacted if we are not active in reducing the climate impacts of our operations and supply chains, resulting in lower demand for our products.
|
| Risk mitigation measures and strategies adopted | The Group has raised the risk profile of climate change to a principal risk and we continue to develop our approach to climate change risk mitigation. We are committed to setting Science Based Targets to decarbonise our own operations and supply chains. We have set energy and water efficiency targets for our sites and continue to engage in global collaborative action for decarbonisation of our key raw materials.
Shifts in consumer demand are an opportunity for growth in our portfolio of plant based and seafood products. Additionally we have the flexibility to adapt our supply chains over time to mitigate physical disruption.
We have committed to set a science-based target through the Science Based Targets initiative and signed the Business Ambition for 1.5°C pledge, directing our efforts towards a net-zero carbon footprint before 2050.
We are conducting an assessment of the key physical and transition risks impacting our business in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. We are also, for the first time this year, reporting on our initial assessment of climate risks and opportunities in line with the TCFD framework. |
Note: References in this preliminary announcement to the Strategic report, the Corporate and social responsibility report, the Directors' report and the Corporate Governance statement are to reports which will be available in the Company's full published accounts.
Responsibility statement of the Directors in respect of the Annual report and financial statements
Each of the Directors whose names and functions are set out below confirms that to the best of their knowledge and belief:
| · | the Group and Company financial statements, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and profit of the Group and profit of the Company; and
|
| · | the management reports, which comprise the Strategic report and the Directors' report, include a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties that it faces. |
This responsibility statement was approved by the Board of Directors on 6 April 2021 and is signed on its behalf by:
Directors
| R Watson OBE | Chairman |
| N Majewski | Chief Financial Officer |
Consolidated income statement
| | | 2020 | 2019 |
| | | 53 weeks | 52 weeks |
| | Notes | £'000 | £'000 |
| Continuing operations | | | |
| Revenue | 3 | 2,774,036 | 1,814,667 |
| Cost of sales | | (2,452,093) | (1,566,715) |
| Gross profit | | 321,943 | 247,952 |
| Distribution costs | | (23,246) | (22,778) |
| Administrative expenses | | (236,859) | (175,811) |
| Share of profit in joint ventures | | 5,029 | 6,406 |
| Operating profit | | 66,867 | 55,769 |
| Finance income | 4 | 22 | 96 |
| Finance costs | 4 | (12,861) | (12,709) |
| Finance costs - net | 4 | (12,839) | (12,613) |
| Profit before income tax | | 54,028 | 43,156 |
| Income tax expense | 5 | (11,988) | (7,996) |
| Profit for the year | | 42,040 | 35,160 |
| | | | |
| Attributable to: | | | |
| Owners of the parent | | 39,736 | 33,065 |
| Non-controlling interests | | 2,304 | 2,095 |
| | | 42,040 | 35,160 |
| Earnings per share attributable to owners of the parent during the year | | | |
| Basic (pence) | 6 | 48.6 | 40.5 |
| Diluted (pence) | 6 | 47.9 | 40.1 |
| | | | |
| | | | |
| Consolidated statement of comprehensive income | ||
| | | |
| | 2020 | 2019 |
| | 53 weeks | 52 weeks |
| | £'000 | £'000 |
| Profit for the year | 42,040 | 35,160 |
| Other comprehensive income/(expense) | | |
| Currency translation differences | 4,682 | (4,175) |
| Other comprehensive income/(expense) for the year net of tax | 4,682 | (4,175) |
| Total comprehensive income for the year | 46,722 | 30,985 |
| | | |
| Total comprehensive income attributable to: | | |
| Owners of the parent | 44,101 | 29,186 |
| Non-controlling interests | 2,621 | 1,799 |
| | 46,722 | 30,985 |
| | | |
| The notes are an integral part of these consolidated financial statements.
| ||
Consolidated and Company Balance sheet
| | | | Group | Company | |
| | | 2020 | 2019 | 2020 | 2019 |
| | Notes | £'000 | £'000 | £'000 | £'000 |
| Assets | | | | | |
| Non-current assets | | | | | |
| Property, plant and equipment | 8 | 290,846 | 226,562 | - | - |
| Intangible assets | 9 | 70,071 | 69,539 | - | - |
| Lease: right of use assets | 10 | 235,135 | 178,293 | - | - |
| Investments | | 12,622 | 11,758 | 157,221 | 157,221 |
| Trade and other receivables | | - | 662 | - | - |
| Deferred income tax assets | | 6,219 | 2,270 | - | - |
| | | 614,893 | 489,084 | 157,221 | 157,221 |
| Current assets | | | | | |
| Inventories | | 116,941 | 91,337 | - | - |
| Trade and other receivables | | 199,642 | 214,611 | 14,272 | 10,272 |
| Cash and cash equivalents | | 123,816 | 110,514 | 190 | 122 |
| | | 440,399 | 416,462 | 14,462 | 10,394 |
| Total assets | | 1,055,292 | 905,546 | 171,683 | 167,615 |
| | | | | | |
| Equity | | | | | |
| Equity attributable to owners of the parent | | | | | |
| Ordinary shares | | 8,194 | 8,173 | 8,194 | 8,173 |
| Share premium | | 65,619 | 64,251 | 65,619 | 64,251 |
| Employee share schemes reserve | | 6,123 | 4,139 | - | - |
| Foreign currency translation reserve | | 4,620 | 255 | - | - |
| Retained earnings | | 161,607 | 140,192 | 26,851 | 24,172 |
| Reverse acquisition reserve | | (31,700) | (31,700) | - | - |
| Merger reserve | | 919 | 919 | 71,019 | 71,019 |
| | | 215,382 | 186,229 | 171,683 | 167,615 |
| Non-controlling interests | | 6,556 | 5,711 | - | - |
| Total equity | | 221,938 | 191,940 | 171,683 | 167,615 |
| | | | | | |
| Liabilities | | | | | |
| Non-current liabilities | | | | | |
| Borrowings | 11 | 206,228 | 175,370 | - | - |
| Lease liabilities | 10 | 238,995 | 132,790 | - | - |
| Deferred consideration | | 3,318 | 3,318 | - | - |
| Deferred income tax liabilities | | 2,384 | 4,116 | - | - |
| | | 450,925 | 315,594 | - | - |
| Current liabilities | | | | | |
| Borrowings | 11 | 39,759 | 21,969 | - | - |
| Lease liabilities | 10 | 6,250 | 51,843 | - | - |
| Trade and other payables | | 332,354 | 321,771 | - | - |
| Current tax liabilities | | 4,066 | 2,429 | - | - |
| | | 382,429 | 398,012 | - | - |
| Total liabilities | | 833,354 | 713,606 | - | - |
| Total equity and liabilities | | 1,055,292 | 905,546 | 171,683 | 167,615 |
| | | | | | |
| | | | | | |
| The notes are an integral part of these consolidated financial statements. | |||||
| | | | | | |
| The financial statements were approved by the Board on 6 April 2021 and were signed on its behalf by: | |||||
| R. Watson | N. Majewski |
| Director | Director |
Hilton Food Group plc - Registered number: 06165540
The Company has taken advantage of the exemption in Section 408 Companies Act 2006 not to publish its individual income statement, statement of comprehensive income and related notes. Profit for the year dealt with in the income statement of Hilton Food Group plc amounted to £21,000,000 (2019: £27,200,000).
Statement of changes in equity
| | | Attributable to owners of the parent | | ||||||||
| | | Share capital | Share premium | Employee share schemes reserve | Foreign currency translation reserve | Retained earnings | Reverse acquisition reserve | Merger reserve | Total | Non-controlling interests | Total equity |
| Group | Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Balance at 31 December 2018 | | 8,160 | 63,628 | 5,505 | 4,134 | 124,923 | (31,700) | 919 | 175,569 | 5,677 | 181,246 |
| Profit for the year | | - | - | - | - | 33,065 | - | - | 33,065 | 2,095 | 35,160 |
| Other comprehensive income | | | | | | | | | | | |
| Currency translation differences | | - | - | - | (3,879) | - | - | - | (3,879) | (296) | (4,175) |
| Total comprehensive income for the year | | - | - | - | (3,879) | 33,065 | - | - | 29,186 | 1,799 | 30,985 |
| Issue of new shares | | 13 | 623 | - | - | - | - | - | 636 | - | 636 |
| Adjustment in respect of employee share schemes | | - | - | (1,445) | - | - | - | - | (1,445) | - | (1,445) |
| Tax on employee share schemes | - | - | 79 | - | - | - | - | 79 | - | 79 | |
| Dividends paid | 7 | - | - | - | - | (17,796) | - | - | (17,796) | (1,765) | (19,561) |
| Total transactions with owners | | 13 | 623 | (1,366) | - | (17,796) | - | - | (18,526) | (1,765) | (20,291) |
| Balance at 29 December 2019 | | 8,173 | 64,251 | 4,139 | 255 | 140,192 | (31,700) | 919 | 186,229 | 5,711 | 191,940 |
| | | | | | | | | | | | |
| Profit for the year | | - | - | - | - | 39,736 | - | - | 39,736 | 2,304 | 42,040 |
| Other comprehensive income | | | | | | | | | | | |
| Currency translation differences | - | - | - | 4,365 | - | - | - | 4,365 | 317 | 4,682 | |
| Total comprehensive income for the year | | - | - | - | 4,365 | 39,736 | - | - | 44,101 | 2,621 | 46,722 |
| Issue of new shares | | 21 | 1,368 | - | - | - | - | - | 1,389 | - | 1,389 |
| Adjustment in respect of employee share schemes | | - | - | 2,120 | - | - | - | - | 2,120 | - | 2,120 |
| Tax on employee share schemes | - | - | (136) | - | - | - | - | (136) | - | (136) | |
| Dividends paid | 7 | - | - | - | - | (18,321) | - | - | (18,321) | (1,776) | (20,097) |
| Total transactions with owners | 21 | 1,368 | 1,984 | - | (18,321) | - | - | (14,948) | (1,776) | (16,724) | |
| Balance at 3 January 2021 | | 8,194 | 65,619 | 6,123 | 4,620 | 161,607 | (31,700) | 919 | 215,382 | 6,556 | 221,938 |
| | | | | | | | | | | | |
| Company | | | | | | | | | | | |
| Balance at 31 December 2018 | | 8,160 | 63,628 | - | - | 14,768 | - | 71,019 | 157,575 | | |
| Profit for the year | | - | - | - | - | 27,200 | - | - | 27,200 | | |
| Total comprehensive income for the year | | - | - | - | - | 27,200 | - | - | 27,200 | | |
| Issue of new shares | | 13 | 623 | - | - | - | - | - | 636 | | |
| Dividends paid | 7 | - | - | - | - | (17,796) | - | - | (17,796) | | |
| Total transactions with owners | | 13 | 623 | - | - | (17,796) | - | - | (17,160) | | |
| Balance at 29 December 2019 | | 8,173 | 64,251 | - | - | 24,172 | - | 71,019 | 167,615 | | |
| | | | | | | | | | | | |
| Profit for the year | | - | - | - | - | 21,000 | - | - | 21,000 | | |
| Total comprehensive income for the year | | - | - | - | - | 21,000 | - | - | 21,000 | | |
| Issue of new shares | | 21 | 1,368 | - | - | - | - | - | 1,389 | | |
| Dividends paid | 7 | - | - | - | - | (18,321) | - | - | (18,321) | | |
| Total transactions with owners | 21 | 1,368 | - | - | (18,321) | - | - | (16,932) | | | |
| Balance at 3 January 2021 | | 8,194 | 65,619 | - | - | 26,851 | - | 71,019 | 171,683 | | |
The notes are an integral part of these consolidated financial statements.
Consolidated and Company Cash flow statement
| | | | Group | Company | |
| | | 2020 | 2019 | 2020 | 2019 |
| | | 53 weeks | 52 weeks | 53 weeks | 52 weeks |
| | | | | | Restated (see note 2) |
| | Notes | £'000 | £'000 | £'000 | £'000 |
| Cash flows from operating activities | | | | | |
| Cash generated from operations | 12 | 120,771 | 90,376 | - | - |
| Interest paid | | (12,861) | (12,709) | - | - |
| Income tax paid | | (16,254) | (7,410) | - | - |
| Net cash generated from operating activities | | 91,656 | 70,257 | - | - |
| | | | | | |
| Cash flows from investing activities | | | | | |
| Acquisition of subsidiary, net of cash acquired | | - | 591 | - | - |
| Investment in joint ventures | | - | (5,246) | - | - |
| Issue of inter-company loan | | - | - | (4,000) | (10,000) |
| Purchases of property, plant and equipment | | (92,803) | (98,555) | - | - |
| Proceeds from sale of property, plant and equipment | | 134 | 198 | - | - |
| Purchases of intangible assets | | (2,703) | (830) | - | - |
| Interest received | | 22 | 96 | - | - |
| Dividends received | | - | - | 21,000 | 27,200 |
| Dividends received from joint venture | | 4,271 | 4,995 | - | - |
| Net cash (used in)/generated from investing activities | | (91,079) | (98,751) | 17,000 | 17,200 |
| | | | | | |
| Cash flows from financing activities | | | | | |
| Proceeds from borrowings | | 92,563 | 95,596 | - | - |
| Repayments of borrowings | | (48,908) | (8,311) | - | - |
| Payment of lease liability | | (15,044) | (14,776) | - | - |
| Issue of ordinary shares | | 1,389 | 636 | 1,389 | 636 |
| Other financial asset | | - | 7,513 | - | - |
| Dividends paid to owners of the parent | | (18,321) | (17,796) | (18,321) | (17,796) |
| Dividends paid to non-controlling interests | | (1,776) | (1,765) | - | - |
| Net cash generated from/(used in) financing activities | | 9,903 | 61,097 | (16,932) | (17,160) |
| | | | | | |
| Net increase in cash and cash equivalents | | 10,480 | 32,603 | 68 | 40 |
| Cash and cash equivalents at beginning of the year | | 110,514 | 80,234 | 122 | 82 |
| Exchange gains/(losses) on cash and cash equivalents | | 2,822 | (2,323) | - | - |
| Cash and cash equivalents at end of the year | | 123,816 | 110,514 | 190 | 122 |
| | | | | | |
| The notes are an integral part of these consolidated financial statements. | |||||
Notes to the financial statements
1 General information
Hilton Food Group plc ('the Company') and its subsidiaries (together 'the Group') is a leading specialist international food packing business supplying major international food retailers in fourteen European countries and Australia. The Company's subsidiaries are listed in a note to the full financial statements.
The Company is a public company limited by shares incorporated and domiciled in the UK and registered in England. The address of the registered office is 2-8 The Interchange, Latham Road, Huntingdon, Cambridgeshire PE29 6YE. The registered number of the Company is 06165540.
The Company maintains a Premium Listing on the London Stock Exchange.
The financial year represents the 53 weeks to 3 January 2021 (prior financial year 52 weeks to 29 December 2019).
This preliminary announcement was approved for issue on 6 April 2021.
2 Summary of significant accounting policies
The accounting policies are consistent with those of the annual financial statements for the year ended 29 December 2019.
Basis of preparation
The consolidated and company financial statements of Hilton Food Group plc have been prepared under the historical cost convention as modified by financial liabilities at fair value through profit or loss and in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The consolidated and company financial statements have been prepared on the going concern basis. The reasons why the Directors consider this basis to be appropriate are set out in the Performance and financial review.
The financial statements are presented in Sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated.
The financial information included in this preliminary announcement does not constitute statutory accounts of the Group for the years ended 3 January 2021 and 29 December 2019 but is derived from those accounts. Statutory accounts for 2019 have been delivered to the Registrar of Companies and those for 2020 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 a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
Restatement of Prior Year Company Cash Flow Statement
Following discussions with the FRC in connection with their review of the Group's 2019 Annual report, the Company concluded that a £10m cash out flow arising from the issue of intercompany loans to its subsidiaries, which had previously been classified as financing activities, should have been classified as investing activities.
As a result of this the Company has restated the 2019 Company cash flow statement to classify the issue of this loan within net cash generated from investing activities, therefore reducing cash generated from investing activities from £27.2m to £17.2m with a corresponding reduction in cash used in financing activities from £27.2 to £17.2m. There is no impact of this adjustment on the net increase in cash and cash equivalents presented for the 2019 financial year.
3 Segment information
Management have determined the operating segments based on the reports reviewed by the Executive Directors that are used to make strategic decisions.
The Executive Directors have considered the business from both a geographic and product perspective.
From a geographic perspective, the Executive Directors consider that the Group has nine operating segments: i) United Kingdom; ii) Netherlands; iii) Belgium; iv) Republic of Ireland; v) Sweden; vi) Denmark; vii) Central Europe including Poland, Czech Republic, Hungary, Slovakia, Latvia, Lithuania and Estonia; viii) Portugal; ix) Australasia and x) Central costs. The United Kingdom, Netherlands, Belgium, Republic of Ireland, Sweden, Denmark, Central Europe and Portugal have been aggregated into one reportable segment 'Europe' as they have similar economic characteristics as identified in IFRS 8. Australasia and Central costs comprise the other reportable segments.
In the prior year, Western and Central Europe were presented as separate segments, however these have now been combined into a single European segment. 2019 segmental information has been restated to show the combined segment.
From a product perspective the Executive Directors consider that the Group has only one identifiable product, wholesaling of food protein products including meat, fish and vegetarian. The Executive Directors consider that no further segmentation is appropriate, as all of the Group's operations are subject to similar risks and returns and exhibit similar long term financial performance.
| The segment information provided to the Executive Directors for the reportable segments is as follows: | ||||||||
| | Europe | Australasia | Central costs | | Europe | Australasia | Central costs | |
| | 2020 | 2019 | ||||||
| | Total | Total | ||||||
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Total revenue | 2,044,190 | 784,455 | - | 2,828,645 | 1,765,443 | 89,772 | - | 1,855,215 |
| Inter-co revenue | (54,609) | - | - | (54,609) | (40,548) | - | - | (40,548) |
| Third party revenue | 1,989,581 | 784,455 | - | 2,774,036 | 1,724,895 | 89,772 | - | 1,814,667 |
| Adjusted operating profit/(loss) segment result (see note 15) | 62,581 | 17,209 | (12,762) | 67,028 | 55,233 | 9,589 | (10,110) | 54,712 |
| Amortisation of acquired intangibles | (2,449) | - | - | (2,449) | (2,438) | - | - | (2,438) |
| Impact of IFRS 16 | 406 | 1,882 | - | 2,288 | 244 | 3,251 | - | 3,495 |
| Operating profit/(loss) segment result | 60,538 | 19,091 | (12,762) | 66,867 | 53,039 | 12,840 | (10,110) | 55,769 |
| Finance income | 22 | - | - | 22 | 5 | 91 | - | 96 |
| Finance costs | (3,243) | (8,140) | (1,478) | (12,861) | (3,232) | (7,523) | (1,954) | (12,709) |
| Income tax (expense)/credit | (11,165) | (2,568) | 1,745 | (11,988) | (9,864) | 393 | 1,475 | (7,996) |
| Profit/(loss) for the year | 46,152 | 8,383 | (12,495) | 42,040 | 39,948 | 5,801 | (10,589) | 35,160 |
| | | | | | | | | |
| Depreciation and amortisation | 32,433 | 25,877 | 91 | 58,401 | 30,014 | 15,286 | 122 | 45,422 |
| Additions to non-current assets | 24,459 | 70,733 | 314 | 95,506 | 50,027 | 48,941 | 417 | 99,385 |
| | | | | | | | | |
| Segment assets | 568,638 | 453,143 | 27,292 | 1,049,073 | 541,582 | 348,293 | 13,401 | 903,276 |
| Deferred income tax assets | | | | 6,219 | | | | 2,270 |
| Total assets | | | | 1,055,292 | | | | 905,546 |
| | | | | | | | | |
| Segment liabilities | 324,582 | 427,050 | 75,272 | 826,904 | 302,351 | 329,449 | 75,261 | 707,061 |
| Current income tax liabilities | | | | 4,066 | | | | 2,429 |
| Deferred income tax liabilities | | | | 2,384 | | | | 4,116 |
| Total liabilities | | | | 833,354 | | | | 713,606 |
Sales between segments are carried out at arm's length.
The Executive Directors assess the performance of each operating segment based on its operating profit before exceptional items and amortisation of acquired intangibles and also before the impact of IFRS 16 (see note 15). Operating profit is measured in a manner consistent with that in the income statement.
The amounts provided to the Executive Directors with respect to total assets and liabilities are measured in a manner consistent with that of the financial statements. The assets are allocated based on the operations of the segment and their physical location. The liabilities are allocated based on the operations of the segment.
The Group has five principal customers (comprising groups of entities known to be under common control), Tesco, Ahold Delhaize, Coop Danmark, ICA Gruppen and Woolworths. These customers are located in the United Kingdom, Netherlands, Belgium, Republic of Ireland, Sweden, Denmark and Central Europe including Poland, Czech Republic, Hungary, Slovakia, Latvia, Lithuania and Estonia and Australasia.
| Analysis of revenues from external customers and non-current assets are as follows: | | | ||
| | Revenues from external customers | Non-current assets excluding deferred tax assets | ||
| | 2020 | 2019 | 2020 | 2019 |
| | £'000 | £'000 | £'000 | £'000 |
| Analysis by geographical area | | | | |
| United Kingdom - country of domicile | 1,125,955 | 960,919 | 165,564 | 180,418 |
| Netherlands | 301,537 | 281,807 | 7,545 | 3,967 |
| Belgium | 6,617 | - | 10,381 | - |
| Sweden | 221,886 | 197,085 | 18,060 | 9,322 |
| Republic of Ireland | 102,460 | 88,526 | 6,025 | 4,474 |
| Denmark | 122,643 | 105,319 | 18,444 | 17,323 |
| Central Europe | 108,483 | 91,239 | 25,164 | 26,546 |
| Australasia | 784,455 | 89,772 | 357,491 | 244,764 |
| | 2,774,036 | 1,814,667 | 608,674 | 486,814 |
| Analysis by principal customer | | | | |
| Customer 1 | 1,168,179 | 980,224 | | |
| Customer 2 | 330,644 | 301,296 | | |
| Customer 3 | 232,022 | 208,230 | | |
| Customer 4 | 117,197 | 103,233 | | |
| Customer 5 | 784,455 | 89,772 | | |
| Other | 141,539 | 131,912 | | |
| | 2,774,036 | 1,814,667 | | |
| 4 Finance income and costs | | |
| | 2020 | 2019 |
| Group | £'000 | £'000 |
| Finance income | | |
| Interest income on short term bank deposits | - | 91 |
| Other interest income | 22 | 5 |
| Finance income | 22 | 96 |
| Finance costs | | |
| Bank borrowings | (4,483) | (3,514) |
| Interest on lease liabilities | (6,919) | (7,694) |
| Other interest expense | (1,459) | (1,501) |
| Finance costs | (12,861) | (12,709) |
| Finance costs - net | (12,839) | (12,613) |
| 5 Income tax expense | | |
| | 2020 | 2019 |
| Group | £'000 | £'000 |
| Current income tax | | |
| Current tax on profits for the year | 17,878 | 10,681 |
| Adjustments to tax in respect of previous years | (273) | (87) |
| Total current tax | 17,605 | 10,594 |
| Deferred income tax | | |
| Origination and reversal of temporary differences | (5,721) | (2,875) |
| Adjustments to tax in respect of previous years | 104 | 277 |
| Total deferred tax | (5,617) | (2,598) |
| Income tax expense | 11,988 | 7,996 |
Deferred tax charged directly to equity during the year in respect of employee share schemes amounted to £135,954 (2019: credit £79,000).
Factors affecting future tax charges
The Group operates in numerous tax jurisdictions around the world and is subject to factors that may affect future tax charges including transfer pricing, tax rate changes and tax legislation changes.
The prevailing UK corporation tax rate of 19% was substantively enacted as part of the Finance Act 2019 on 12 March 2019. In the Spring Budget 2020, the UK Government announced that from 1 April 2020 the corporation tax rate would remain at 19% (rather than reducing to 17%, as previously enacted). This new law was substantively enacted on 17 March 2020. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
The tax on the Group's profit before income tax differs from the theoretical amount that would arise using the standard rate of UK Corporation Tax of 19% (2019: 19%) applied to profits of the consolidated entities as follows:
| | 2020 | 2019 |
| | £'000 | £'000 |
| Profit before income tax | 54,028 | 43,156 |
| Tax calculated at the standard rate of UK Corporation Tax 19% (2019: 19%) | 10,265 | 8,200 |
| Expenses not deductible for tax purposes | 834 | 367 |
| Joint venture received net of tax | (1,364) | (1,217) |
| Adjustments to tax in respect of previous years | (169) | 190 |
| Profits taxed at rates other than 19% (2019: 19%) | 2,501 | 694 |
| Deferred tax on IFRS 16 | (87) | (280) |
| Other | 8 | 42 |
| Income tax expense | 11,988 | 7,996 |
| | | |
| There is no tax impact relating to components of other comprehensive income. | | |
6 Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has share options for which a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
| | | | 2020 | | 2019 |
| Group | | Basic | Diluted | Basic | Diluted |
| Profit attributable to owners of the parent | (£'000) | 39,736 | 39,736 | 33,065 | 33,065 |
| Weighted average number of ordinary shares in issue | (thousands) | 81,835 | 81,835 | 81,665 | 81,665 |
| Adjustment for share options | (thousands) | - | 1,084 | - | 836 |
| Adjusted weighted average number of ordinary shares | (thousands) | 81,835 | 82,919 | 81,665 | 82,501 |
| Basic and diluted earnings per share | (pence) | 48.6 | 47.9 | 40.5 | 40.1 |
| 7 Dividends | | |
| | 2020 | 2019 |
| Group and Company | £'000 | £'000 |
| Final dividend in respect of 2019 paid 15.4p per ordinary share (2018: 15.8p) | 12,586 | 12,893 |
| Interim dividend in respect of 2020 paid 7.0p per ordinary share (2019: 6.0p) | 5,735 | 4,903 |
| Total dividends paid | 18,321 | 17,796 |
The Directors propose a final dividend of 19.0p per share payable on 2 July 2021 to shareholders who are on the register at 4 June 2021. This dividend totalling £15.6m has not been recognised as a liability in these consolidated financial statements.
During 2018 the Company declared and paid an interim dividend totalling £4.6m out of distributable reserves. The Companies Act 2006 requires public companies where necessary to prepare and file relevant accounts with the Registrar of Companies. However it has come to the attention of the Directors that the Company did not fully comply with these requirements resulting in a technical infringement of the Companies Act. In order to address this situation a special resolution will be proposed at the Company's 2021 Annual General Meeting.
| 8 Property, plant and equipment | |||||
| | Land and buildings (including leasehold improvements) | Plant and machinery | Fixtures and fittings | Motor vehicles | Total |
| Group | £'000 | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | | |
| At 31 December 2018 | 75,309 | 282,860 | 14,127 | 352 | 372,648 |
| IFRS 16 transfer to Right-of-Use asset | (3,484) | - | - | - | (3,484) |
| Exchange adjustments | (1,940) | (11,328) | (597) | (3) | (13,868) |
| Acquisition | 33 | 817 | - | - | 850 |
| Additions | 17,932 | 72,176 | 2,712 | 75 | 92,895 |
| Additions: Transfer from Right-of-Use Asset | 5,660 | - | - | - | 5,660 |
| Transfer to intangible assets | - | (953) | - | - | (953) |
| Disposals | - | (1,031) | (199) | (150) | (1,380) |
| At 29 December 2019 | 93,510 | 342,541 | 16,043 | 274 | 452,368 |
| Accumulated depreciation | | | | | |
| At 31 December 2018 | 25,306 | 176,896 | 11,769 | 128 | 214,099 |
| IFRS 16 transfer to Right-of-Use asset | (2,600) | - | - | - | (2,600) |
| Exchange adjustments | (608) | (7,172) | (513) | (2) | (8,295) |
| Charge for the year | 3,586 | 18,818 | 1,321 | 76 | 23,801 |
| Disposals | - | (876) | (198) | (125) | (1,199) |
| At 29 December 2019 | 25,684 | 187,666 | 12,379 | 77 | 225,806 |
| Net book amount | | | | | |
| At 31 December 2018 | 50,003 | 105,964 | 2,358 | 224 | 158,549 |
| At 29 December 2019 | 67,826 | 154,875 | 3,664 | 197 | 226,562 |
| | | | | | |
| Cost | | | | | |
| At 30 December 2019 | 93,510 | 342,541 | 16,043 | 274 | 452,368 |
| Exchange adjustments | 1,250 | 15,655 | 820 | (1) | 17,724 |
| Additions | 2,793 | 49,040 | 3,637 | 110 | 55,580 |
| Additions: Transfer from Right-of-Use Asset | - | 37,223 | - | - | 37,223 |
| Transfer to intangible assets | - | (566) | - | - | (566) |
| Disposals | (30) | (650) | (2) | (211) | (893) |
| At 3 January 2021 | 97,523 | 443,243 | 20,498 | 172 | 561,436 |
| Accumulated depreciation | | | | | |
| At 30 December 2019 | 25,684 | 187,666 | 12,379 | 77 | 225,806 |
| Exchange adjustments | 528 | 7,245 | 473 | (1) | 8,245 |
| Charge for the year | 4,168 | 30,609 | 2,483 | 38 | 37,298 |
| Disposals | (30) | (615) | (2) | (112) | (759) |
| At 3 January 2021 | 30,350 | 224,905 | 15,333 | 2 | 270,590 |
| Net book amount | | | | | |
| At 3 January 2021 | 67,173 | 218,338 | 5,165 | 170 | 290,846 |
Depreciation charges are included within administrative expenses in the income statement.
The cost and net book amount of property plant and equipment in the course of its construction included above comprise plant and machinery £20,318,102 (2019: £37,708,439).
Additions to property, plant and equipment include capitalised interest costs of £409,000 (2019: £2,206,000).
| 9 Intangible assets | | | | |
| | Computer software | Brand and customer relationships | Goodwill | Total |
| Group | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | |
| At 31 December 2018 | 6,273 | 21,907 | 44,793 | 72,973 |
| Exchange adjustments | (173) | - | - | (173) |
| Acquisition | - | 653 | 2,789 | 3,442 |
| Additions | 830 | - | - | 830 |
| Transfer from property, plant and equipment | 953 | - | - | 953 |
| Disposals | (25) | - | - | (25) |
| At 29 December 2019 | 7,858 | 22,560 | 47,582 | 78,000 |
| Accumulated amortisation | | | | |
| At 31 December 2018 | 3,269 | 2,744 | - | 6,013 |
| Exchange adjustments | (148) | - | - | (148) |
| Charge for the year | 183 | 2,438 | - | 2,621 |
| Disposals | (25) | - | - | (25) |
| At 29 December 2019 | 3,279 | 5,182 | - | 8,461 |
| Net book amount | | | | |
| At 31 December 2018 | 3,004 | 19,163 | 44,793 | 66,960 |
| At 29 December 2019 | 4,579 | 17,378 | 47,582 | 69,539 |
| | | | | |
| Cost | | | | |
| At 30 December 2019 | 7,858 | 22,560 | 47,582 | 78,000 |
| Exchange adjustments | 41 | - | - | 41 |
| Additions | 2,703 | - | - | 2,703 |
| Transfer from property, plant & equipment | 566 | - | - | 566 |
| Disposals | (188) | - | - | (188) |
| At 3 January 2021 | 10,980 | 22,560 | 47,582 | 81,122 |
| Accumulated amortisation | | | | |
| At 30 December 2019 | 3,279 | 5,182 | - | 8,461 |
| Exchange adjustments | 25 | - | - | 25 |
| Charge for the year | 304 | 2,449 | - | 2,753 |
| Disposals | (188) | - | - | (188) |
| At 3 January 2021 | 3,420 | 7,631 | - | 11,051 |
| Net book amount | | | | |
| At 3 January 2021 | 7,560 | 14,929 | 47,582 | 70,071 |
Amortisation charges are included within administrative expenses in the income statement.
Goodwill Impairment Testing
Goodwill includes £44,793,000 relating to the acquisition of the Seachill business in 2017 and £2,789,000 recognised in 2019 following the acquisition of SV Cuisine Limited. Seachill and SVC Cuisine are each considered to be separate cash generating units. The recoverable amount of the Seachill cash generating unit was determined on a value-in-use basis and the recoverable amount of SV Cuisine was based on its fair value less costs of disposal after allowing for the impact of planned investment; in both cases using a discounted cash flow model. For each cash generating unit the recoverable amounts calculated exceeded their carrying value.
The key assumptions used in the calculations are projected EBITDA, projected profit after tax, the pre-tax and post-tax discount rates and the growth rates used to extrapolate cash flows beyond the projected period. EBITDA and profit after tax are based on one-year budgets approved by the board and longer term, three year, projections based on past experience adjusted to take account of the impact of expected changes to sales prices, volumes, business mix and margin. Cash flows are discounted at a pre-tax discount rate of 10% (2019: 11%) or a post-tax discount rate of 8% (2019: 9%) with a growth rate of 2% (2019: 2%) used to extrapolate cash flows.
Sensitivity to changes in assumptions
The calculation is most sensitive to changes in the assumptions used for projected cash flow, the pre-tax discount rate and the growth rate. Management considers that reasonably possible changes in assumptions would be an increase in discount rate of one percentage point, a reduction in growth rate of 1 percentage point or a 10% reduction in budgeted cash flow. As an indication of sensitivity, when applied to the value-in-use calculation neither a 1% reduction in growth rate, a 10% reduction in budgeted cash flow, nor a 1% increase in the discount rate would have resulted in an impairment of goodwill in the year.
No indicators of impairment were identified in respect of other, amortised, intangible assets and therefore no impairment review has been undertaken.
| 10 Leases | | | | |
| | | | | |
| (i) Amounts recognised in the balance sheet | | | | |
| | | | | |
| The balance sheet includes the following amounts relating to leases: | | | | |
| | | | | |
| Lease: right of use assets | Land & Buildings | Equipment | Vehicles | Total |
| Group | £'000 | £'000 | £'000 | £'000 |
| Opening net book amount as at 31 December 2018 | 77,748 | 60,725 | 2,174 | 140,647 |
| Exchange Adjustments | (4,060) | (1,828) | (77) | (5,965) |
| Additions | 67,975 | 108 | 1,432 | 69,515 |
| Acquisition | 232 | - | - | 232 |
| Transfer to tangible fixed assets | (5,660) | - | - | (5,660) |
| Remeasurements, reclassification and scope changes | 6,547 | (8,066) | 43 | (1,476) |
| Depreciation | (9,842) | (8,260) | (898) | (19,000) |
| Closing net book amount at 29 December 2019 | 132,940 | 42,679 | 2,674 | 178,293 |
| | | | | |
| Exchange Adjustments | 10,469 | 295 | 83 | 10,847 |
| Additions | 98,427 | 195 | 1,303 | 99,925 |
| Transfer to tangible fixed assets | - | (37,223) | - | (37,223) |
| Remeasurements, reclassification and scope changes | 2,592 | (586) | (363) | 1,643 |
| Depreciation | (13,008) | (4,254) | (1,088) | (18,350) |
| Closing net book amount at 3 January 2021 | 231,420 | 1,106 | 2,609 | 235,135 |
| | | | | |
| Lease liabilities | | | 2020 | 2019 |
| Group | | | £'000 | £'000 |
| Current | | | 6,250 | 51,843 |
| Non-current | | | 238,995 | 132,790 |
| | | | 245,245 | 184,633 |
| | | | | |
| | | | | |
| Maturity analysis - contractual undiscounted cash flows | | 2020 | 2019 | |
| Group | | £'000 | £'000 | |
| Less than one year | | | 15,010 | 58,130 |
| One to five years | | | 77,822 | 50,625 |
| More than five years | | | 255,619 | 125,049 |
| Total lease liabilities | | | 348,451 | 233,804 |
| | | | | |
| (ii) Amounts recognised in the consolidated income statement | | | ||
| | | | | |
| The income statement shows the following amounts related to leases: | | | | |
| | | | | |
| Depreciation charge on right-of-use assets | | | 2020 | 2019 |
| Group | | | £'000 | £'000 |
| Buildings | | | 13,008 | 9,842 |
| Plant & equipment | | | 4,254 | 8,260 |
| Vehicles | | | 1,088 | 898 |
| | | | 18,350 | 19,000 |
| | | | | |
| Interest expenses (included in finance costs) | | 6,919 | 7,694 | |
| | | | | |
| Expenses relating to short-term leases (included in costs of goods sold and administrative expenses) | | | 278 | 790 |
| | | | | |
| Expenses relating to leases of low-value assets that have not been shown above as short-term (included in costs of goods sold and administrative expenses) | | | 24 | 22 |
| | | | | |
| The total cash outflow for leases in 2020 was £59,488,000 (2019: £28,942,000). | | | ||
| | | | | |
| Variable Lease Payments | | | | |
|
Leases with liabilities recognised of £10,163,000 (2019: £10,456,000), accounting for 4.1% (2019 5.6%) of total lease liabilities, are subject to five yearly RPI linked rent reviews. These rent reviews are subject to a minimum collar, the impact of which is included in the calculation of lease liabilities and a maximum cap. If the impact of these variable lease payments had been recognised, applying index levels as at 3 January 2021, lease liabilities would have increased by 2020: £633,000) 2019: £508,000).
| ||||
| In addition, leases with liabilities recognised totalling £11,063,000 (2019: £3,702,000), accounting for 4.5% (2019: 2.0%) of total lease liabilities, are subject to annual CPI linked rent increases. If the impact of these variable lease payments had been recognised, applying index levels as at 3 January 2021, lease liabilities would have increased by £44,000 (2019: £18,000) | ||||
| 11 Borrowings | | |
| | 2020 | 2019 |
| Group | £'000 | £'000 |
| Current | | |
| Bank borrowings | 39,759 | 21,969 |
| Non-current | | |
| Bank borrowings | 206,228 | 175,370 |
| Total borrowings | 245,987 | 197,339 |
| | | |
| Due to the frequent re-pricing dates of the Group's loans, the fair value of current and non-current borrowings is approximate to their carrying amount. | ||
| The carrying amounts of the Group's borrowings are denominated in the following currencies: | ||
| | 2020 | 2019 |
| Currency | £'000 | £'000 |
| UK Pound | 66,142 | 68,244 |
| Euro | 21,217 | 25,728 |
| Danish Kroner | 851 | - |
| Polish Zloty | 6,560 | 7,502 |
| Australian Dollar | 120,667 | 85,614 |
| New Zealand Dollar | 30,550 | 10,251 |
| | 245,987 | 197,339 |
Bank borrowings are repayable in quarterly instalments from 2019 - 2022 with interest charged at LIBOR (or equivalent benchmark rates) plus 1.3% - 1.6%. Bank borrowings are subject to joint and several guarantees from each active Group undertaking.
The Group has undrawn committed loan facilities of £51.5m (2019: £71.1m) with the loan facilities expiring in 2022.
The undiscounted contractual maturity profile of the Group's borrowings is described in a note to the full financial statements.
Group net debt of £123,366,000 (2019: net debt of £88,247,000) comprises borrowings, noted above, of £245,987,000 (2019: £197,339,000) cash and cash equivalents of £123,816,000 (2019: £110,514,000), and finance leases previously recognised under IAS 17 of £1,195,000 (2019: £1,422,000). Including total lease liabilities Group net debt is £367,416,000 (2019: £271,458,000).
| 12 Cash generated from operations | | |
| | 2020 | 2019 |
| Group | £'000 | £'000 |
| Profit before income tax | 54,028 | 43,156 |
| Finance costs - net | 12,839 | 12,613 |
| Operating profit | 66,867 | 55,769 |
| Adjustments for non-cash items: | | |
| Share of post tax profits of joint venture | (5,029) | (6,406) |
| Depreciation of property, plant and equipment | 37,298 | 23,801 |
| Depreciation of leased assets | 18,350 | 19,000 |
| Amortisation of intangible assets | 2,753 | 2,621 |
| Amortisation of contract assets - charged to revenue | 1,197 | 1,273 |
| Gain on disposal of non-current assets | (40) | (22) |
| Adjustment in respect of employee share schemes | 2,120 | (1,445) |
| Changes in working capital: | | |
| Inventories | (23,212) | (9,494) |
| Trade and other receivables | 22,995 | (51,010) |
| Trade and other payables | (2,528) | 56,289 |
| Cash generated from operations | 120,771 | 90,376 |
| | | |
| The parent company has no operating cash flows. | | |
| 13 Analysis and movement in net debt | | ||||
| | | | | | |
| This section sets out an analysis of net debt and the movements in net debt for each of the periods presented. | |||||
| | | | | | |
| | | | | 2020 | 2019 |
| | | | | £'000 | £'000 |
| Cash and cash equivalents | | | 123,816 | 110,514 | |
| Borrowings (including overdrafts) | | | (245,987) | (197,339) | |
| Net bank debt | | | (122,171) | (86,825) | |
| | | | | | |
| Lease liabilities | | | (245,245) | (184,633) | |
| Net debt | | | (367,416) | (271,458) | |
| | | | | | |
| | Cash/other financial assets | Borrowings (including overdrafts) | Net bank debt | Lease liabilities | Net debt |
| Net debt reconciliation | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 31 December 2018 | 88,047 | (113,041) | (24,994) | (142,948) | (167,942) |
| Cash flows | 25,088 | 8,311 | 33,399 | 20,436 | 53,835 |
| New borrowings | - | (95,596) | (95,596) | (69,689) | (165,285) |
| Exchange adjustments | (2,621) | 2,987 | 366 | 6,091 | 6,457 |
| Other changes | - | - | - | 1,477 | 1,477 |
| At 29 December 2019 | 110,514 | (197,339) | (86,825) | (184,633) | (271,458) |
| | | | | | |
| Cash flows | 10,480 | 48,908 | 59,388 | 52,267 | 111,655 |
| New borrowings | - | (92,563) | (92,563) | (99,925) | (192,488) |
| Exchange adjustments | 2,822 | (4,993) | (2,171) | (11,309) | (13,480) |
| Other changes | - | - | - | (1,645) | (1,645) |
| At 3 January 2021 | 123,816 | (245,987) | (122,171) | (245,245) | (367,416) |
| | | | | | |
| Lease cash flows include £37,223,000 (2019: £5,660,000) paid in respect of lease purchase obligations in the year. | |||||
14 Related party transactions and ultimate controlling party
The Directors do not consider there to be one ultimate controlling party. The companies noted below are all deemed to be related parties by way of common Directors.
Sales and purchases made on an arm's length basis on normal credit terms to related parties during the year were as follows:
| Group | | 2020 | 2019 |
| Sales | | £'000 | £'000 |
| Sohi Meat Solutions Distribuicao de Carnes SA - fee for services | | 3,351 | 3,246 |
| Sohi Meat Solutions Distribuicao de Carnes SA - recharge of joint venture costs | | 368 | 352 |
| Dalco B.V. | | 313 | 117 |
| Foods Connected Limited | | 3 | - |
| | | | |
| Group | | 2020 | 2019 |
| Purchases | | £'000 | £'000 |
| Foods Connected Limited | | 351 | 340 |
| | | | |
| | | | |
| Amounts owing from related parties at the year end were as follows: | |||
| | | Owed from related parties | |
| | | 2020 | 2019 |
| Group | | £'000 | £'000 |
| Foods Connected Limited | | 15 | - |
| Sohi Meat Solutions Distribuicao de Carnes SA | | 393 | 348 |
| Dalco B.V. | | 282 | 117 |
| | | 690 | 465 |
| | | | |
| Amounts owing to related parties at the year end were as follows: | |||
| | | Owed to related parties | |
| | | 2020 | 2019 |
| Group | | £'000 | £'000 |
| Foods Connected Limited | | 85 | 66 |
| Dalco B.V. | | 123 | - |
| | | 208 | 66 |
| | | | |
| | | | |
| The Company's related party transactions with other Group companies during the year were as follows: | |||
| | | 2020 | 2019 |
| Company | | £'000 | £'000 |
| Hilton Foods Limited - dividend received | | 21,000 | 27,200 |
| | | | |
| At the year end £14,272,000 was owed by Hilton Foods Limited (2019: £10,272,000). | |||
| | | | |
| Details of key management compensation are given in a note to the full financial statements. | |||
| 15 Alternative Performance Measures | ||||||
| The Group's performance is assessed using a number of alternative performance measures (APM's). | ||||||
| | | | | | | |
| The Group's alternative profitability measures are presented before exceptional items, amortisation of certain intangible assets acquired through business combinations and the impact of IFRS 16 - Leases. | ||||||
| | | | | | | |
| The measures are presented on this basis, as management believe they provide useful additional information about the Group's performance and aids a more effective comparison of the Group's trading performance from one period to the next. | ||||||
| | | | | | | |
| Adjusted profitability measures are reconciled to unadjusted IFRS results on the face of the income statement below. | ||||||
| | Reported | Add back: IFRS 16 Depreciation and interest | Less: IAS 17 Lease accounting costs | Reported excluding IFRS 16 | Add back: Amortisation of acquisition intangibles | Adjusted |
| 53 weeks ended 3 January 2021 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| Operating profit | 66,867 | 18,163 | (20,451) | 64,579 | 2,449 | 67,028 |
| Net finance costs | (12,839) | 6,874 | - | (5,965) | - | (5,965) |
| Profit before income tax | 54,028 | 25,037 | (20,451) | 58,614 | 2,449 | 61,063 |
| | | | | | | |
| Profit for the period | 42,040 | 24,074 | (20,451) | 45,663 | 1,984 | 47,647 |
| Less non-controlling interest | (2,304) | (382) | 387 | (2,299) | - | (2,299) |
| Profit attributable to members of the parent | 39,736 | 23,692 | (20,064) | 43,364 | 1,984 | 45,348 |
| | | | | | | |
| Depreciation and amortisation | 59,558 | (18,163) | - | 41,395 | (2,449) | 38,946 |
| EBITDA | 126,425 | - | (20,451) | 105,974 | - | 105,974 |
| | | | | | | |
| Earnings per share | pence | | | pence | | pence |
| Basic | 48.6 | | | 53.0 | | 55.4 |
| Diluted | 47.9 | | | 52.3 | | 54.7 |
| | | | | | | |
| | Reported | Add back: IFRS 16 Depreciation and interest | Less: IAS 17 Lease accounting costs | Reported excluding IFRS 16 | Add back: Amortisation of acquisition intangibles | Adjusted |
| 52 weeks ended 29 December 2019 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| Operating profit | 55,769 | 18,820 | (22,315) | 52,274 | 2,438 | 54,712 |
| Net finance costs | (12,613) | 7,641 | - | (4,972) | - | (4,972) |
| Profit before income tax | 43,156 | 26,461 | (22,315) | 47,302 | 2,438 | 49,740 |
| | | | | | | |
| Profit for the period | 35,160 | 24,849 | (22,315) | 37,694 | 1,975 | 39,669 |
| Less non-controlling interest | (2,095) | (370) | 364 | (2,101) | - | (2,101) |
| Profit attributable to members of the parent | 33,065 | 24,479 | (21,951) | 35,593 | 1,975 | 37,568 |
| | | | | | | |
| Depreciation and amortisation | 46,673 | (18,820) | - | 27,853 | (2,438) | 25,415 |
| EBITDA | 102,442 | - | (22,315) | 80,127 | - | 80,127 |
| | | | | | | |
| Earnings per share | pence | | | pence | | pence |
| Basic | 40.5 | | | 43.6 | | 46.0 |
| Diluted | 40.1 | | | 43.1 | | 45.5 |
| | | | | | | |
| The depreciation and amortisation figure includes £1,197,000 (2019: £1,273,000) amortisation of contract assets charged to revenue and adds back a gain on disposal of £40,000 (2019: £22,000).
| ||||||
| | | | | | | |
| Segmental operating profit reconciles to adjusted segmental operating profit as follows: | ||||||
| | Reported | Add back: IFRS 16 Depreciation and interest | Less: IAS 17 Lease accounting costs | Reported excluding IFRS 16 | Add back: Amortisation of acquisition intangibles | Adjusted |
| 53 weeks ended 3 January 2021 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| Europe | 60,538 | 5,757 | (6,163) | 60,132 | 2,449 | 62,581 |
| Australasia | 19,091 | 12,406 | (14,288) | 17,209 | - | 17,209 |
| Central costs | (12,762) | - | - | (12,762) | - | (12,762) |
| Total | 66,867 | 18,163 | (20,451) | 64,579 | 2,449 | 67,028 |
| | | | | | | |
| | Reported | Add back: IFRS 16 Depreciation and interest | Less: IAS 17 Lease accounting costs | Reported excluding IFRS 16 | Add back: Amortisation of acquisition intangibles | Adjusted |
| 52 weeks ended 29 December 2019 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| Europe | 53,039 | 5,872 | (6,116) | 52,795 | 2,438 | 55,233 |
| Australasia | 12,840 | 12,948 | (16,199) | 9,589 | - | 9,589 |
| Central costs | (10,110) | - | - | (10,110) | - | (10,110) |
| Total | 55,769 | 18,820 | (22,315) | 52,274 | 2,438 | 54,712 |
| | | | | | | |
| In the prior year, Western and Central Europe were presented as separate segments, however these have now been combined into a single European segment. 2019 segmental information has been restated to show the combined segment. | ||||||
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