Financial highlights

Revenue
(1.9)%

at constant exchange rates

Adjusted operating profit*
+6.2%

at constant exchange rates

Adjusted earnings per share*
+2.7%

at constant exchange rates

Dividend per share
+8.9%

For the year ended 31 December 2023. *Alternative performance measure

Financial results 2023 2022 Growth as reported Growth at constant exchange rate
Revenue £11,797.1m £12,039.5m (2.0)% (1.9)%
Adjusted operating profit* £944.2m £885.9m 6.6% 6.2%
Adjusted profit before income tax* £853.7m £818.0m 4.4% 3.4%
Adjusted earnings per share* 191.1p 184.3p 3.7% 2.7%
Dividend per shareΔ 68.3p 62.7p 8.9%  
         
Statutory results        
Operating profit £789.1m £701.6m 12.5%  
Profit before income tax £698.6m £634.6m 10.1%  
Basic earnings per share 157.1p 141.7p 10.9%  

 

Highlights include:

  • Revenue declined by 1.9% at constant exchange rates and remained broadly in line with prior year, excluding the UK healthcare disposal; revenue remains significantly ahead of 2019
  • Adjusted operating profit* increased by 6.2% at constant exchange rates, with growth of 7.6% excluding the UK healthcare disposal; reported operating profit rose 12.5%
  • Operating margin increased from 7.4% to 8.0%
  • Adjusted earnings per share* increased by 2.7% at constant exchange rates; reported basic earnings per share increased by 10.9%
  • Continued strong free cash flow* driven by cash conversion of 96%
  • 31st consecutive year of annual dividend growth; total dividend per share growth of 8.9%
  • 19 agreed acquisitions over 2023, with a committed spend of £468 million; [x] acquisitions announced today
  • Net debt to EBITDA* of 1.1 times provides substantial headroom for acquisitions and other capital allocation options

* Alternative performance measure

◊ Growth at constant exchange rates is calculated by comparing the 2023 results to the 2022 results retranslated at the average exchange rates used for 2023

∆ The Board is recommending a 2023 final dividend of 50.1p per share. Including the 2023 interim dividend per share of 18.2p the total dividend per share of 68.3p represents an 8.9% increase compared to the 2022 total

Consolidated income statement

For the year ended 31 December 2023

  2023
£m
2022
£m
Actual exchange Constant exchange Constant exchange◊ Excluding disposal†
Revenue 11797.1 12,039.5 (2.0)% (1.9)% (0.4)%
Adjusted operating profit* 944.2 885.9 6.6% 6.2% 7.6%
Finance income 60.4 22.3      
Finance expense (150.9) (90.2)      
Adjusted profit before income tax* 853.7 818.0 4.4% 3.4%  
Tax on adjusted profit (213.4) (201.2)      
Adjusted profit for the year* 640.3 616.8 3.8% 2.8%  
           
Adjusted earnings per share* 191.1p 184.3p 3.7% 2.7%  
           
Adjusted operating profit 944.2 885.9 6.6% 6.2% 7.6%
Adjusted for:          
Customer relationships, brands and technology amortisation (135.6) (128.4)      
Acquisition related items (19.5) (55.9)      
Operating profit 789.1 701.6 12.5%    
Finance income 60.4 22.3      
Finance expense (150.9) (90.2)      
Profit before income tax 698.6 634.6 10.1%    
Income tax (172.4) (160.2)      
Profit for the year attributable to the Company's equity holders 526.2 474.4 10.9%    
           
Earnings per share attributable to the Company's equity holders          
Basic 157.1p 141.7p 10.9%    
Diluted 156.0p 140.7p      

* See Note 3 of the 2023 Annual Report for further details of the alternative performance measures.

◊ Growth at constant exchange rates is calculated by comparing the 2023 results to the 2022 results retranslated at the average exchange rates used for 2023.

† Excluding the impact from the disposal of our UK healthcare business in December 2022.

Consolidated balance sheet

At 31 December 2023

  2023
£m
2022
£m
Assets    
Property, plant and equipment 159.4 137.2
Right-of-use assets 616.3 529.6
Intangible assets 3,242.1 3,093.9
Defined benefit pension assets 69.0 60.5
Derivative financial assets 0.1 -
Deferred tax assets 14.2 4.0
Total non-current assets 4,101.1 3,825.2
     
Inventories 1,621.1 1,748.6
Trade and other receivables 1,578.5 1,557.4
Income tax receivable 8.7 12.6
Derivative financial assets 11.7 19.0
Cash and cash equivalents 1,426.1 1,504.0
Total current assets 4,646.1 4,841.6
Total assets 8,747.2 8,666.8
     
Equity    
Share capital 108.6 108.5
Share premium 205.2 199.4
Translation reserve (170.2) (74.2)
Other reserves 16.7 17.7
Retained earnings 2,806.0 2,469.5
Total equity attributable to the Company’s equity holders 2,966.3 2,720.9
     
Liabilities    
Interest bearing loans and borrowings 1,417.1 1,574.0
Defined benefit pension liabilities 19.6 20.6
Other payables 176.1 117.2
Income tax payable 0.5 1.1
Provisions 75.8 50.5
Lease liabilities 512.4 424.0
Derivative financial liabilities 78.7 100.5
Deferred tax liabilities 190.1 192.7
Total non-current liabilities 2,470.3 2,480.6
     
Bank overdrafts 874.2 825.9
Interest bearing loans and borrowings 130.0 161.0
Trade and other payables 2,071.6 2,249.4
Income tax payable 47.0 40.6
Provisions 10.0 24.2
Lease liabilities 152.1 145.9
Derivative financial liabilities 25.7 18.3
Total current liabilities 3,310.6 3,465.3
Total liabilities 5,780.9 5,945.9
Total equity and liabilities 8,747.2 8,666.8

 

Consolidated cash flow statement

For the year ended 31 December 2023

  2023
£m
2022
£m
Cash flow from operating activities
Profit before income tax 698.6 634.6
Adjusted for:
Net finance expense 90.5 67.9
Customer relationships and brands amortisation 135.6 128.4
Acquisition related items 19.5 55.9
Non-recurring pension scheme charges - (0.9)
Disposal of business 944.2 885.9
Adjustments:
Depreciation and software amortisation 207.2 189.5
Other non-cash items 6.5 15.9
Working capital movement (28.4) 54.5
Cash generated from operations before acquisition related items 1,129.5 1,145.8
Cash outflow from acquisition related items (36.9) (20.6)
Income tax paid (188.6) (173.6)
Cash inflow from operating activities 904.0 951.6
 
Cash flow from investing activities
Interest received 54.4 16.2
Purchase of property, plant and equipment and software (58.3) (46.7)
Sale of property, plant and equipment 2.1 1.0
Purchase of businesses (337.7) (243.6)
Disposal of business - 49.9
Cash outflow from investing activities (339.5) (223.2)
 
Cash flow from financing activities
Interest paid excluding interest on lease liabilities (107.6) (61.9)
Dividends paid (209.7) (190.5)
Increase in borrowings - 346.4
Repayment of borrowings (159.5) (131.8)
Realised (losses)/gains on foreign exchange contracts 21.6 86.2
Payment of lease liabilities – principal (159.4) (153.1)
Payment of lease liabilities – interest (28.6) (22.0)
Proceeds from issue of ordinary shares to settle share options 5.9 5.3
Proceeds from exercise of market purchase share options 46.8 36.8
Purchase of employee trust shares (76.4) (74.0)
Cash outflow from financing activities (666.9) (331.0)
     
Increase/(decrease) in cash and cash equivalents (102.4) 397.4
     
Cash and cash equivalents at start of year 678.1 225.3
Increase/(decrease) in cash and cash equivalents (102.4) 397.4
Currency translation (23.8) 55.4
Cash and cash equivalents at end of year 551.9 678.1

 

Alternative performance measures

2023
£m

2022
£m

Cash generated from operations before acquisition related items 1,129.5 1,145.8
Purchase of property, plant and equipment and software (58.3) (46.7)
Sale of property, plant and equipment 2.1 1.0
Payment of lease liabilities (188.0) (175.1)
Operating cash flow 885.3 925.0
     
Adjusted operating profit 944.2 885.9
Add back depreciation of right-of-use assets 166.1 151.1
Deduct payment of lease liabilities (188.0) (175.1)
Lease adjusted operating profit 922.3 861.9
     
Cash conversion (operating cash flow as a percentage of lease adjusted operating profit) 96% 107%

 

† See Note 3 of the 2023 Annual Report for further details of the alternative performance measures.

Five year review

  IFRS 2023
£m
IFRS 2022
£m
IFRS 2021
£m
IFRS 2020
£m
IFRS 2019
£m
Revenue 11,797.1 12,039.5 10,285.1 10,111.1​ 9,326.7
Operating profit 789.1 701.6 623.3 618.5​ 528.4
Finance income 60.4 22.3 10.7 10.4​ 12.4
Finance expense (150.9) (90.2) (65.3)​ (73.2)​ (87.5)
Profit on disposal of businesses - 0.9
Profit before income tax 698.6 634.6 568.7 555.7​ 453.3
Income tax (172.4) (160.2) (125.9)​ (125.7)​ (104.1)
Profit for the year attributable to the Company's equity holders 526.2 474.4 442.8 430.0​ 349.2
Basic earnings per share 157.1 141.7p 132.7p 128.8p​ 104.8p
Alternative performance measures          
Adjusted operating profit 944.2 885.9 752.8 778.4​ 653.3
Adjusted profit before income tax 853.7 818.0 698.2 715.6​ 578.2
Adjusted profit for the year 640.3 616.8 542.5 550.5​ 440.6
Adjusted earnings per share 191.1p 184.3p 162.5p 164.9p​ 132.2p