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Basis of preparation Introduction IMI plc (the Company) is a company incorporated and domiciled in the United Kingdom. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the Group). The Company financial statements present information about the Company as a separate entity and not about the Group. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the UK. The Company financial statements have been prepared in accordance with International Accounting Standards (IAS) in conformity with the requirements of the Companies Act 2006 as applied in accordance with section 408 of the Companies Act 2006 and these are presented on pages 258 to 263. The financial statements were approved by the Board of Directors on 29 February 2024. Basis of accounting The financial statements are presented in Pounds Sterling (which is the Company\u2019s functional currency), rounded to the nearest hundred thousand, except revenues, which are rounded to the nearest whole million. They are prepared on the historical cost basis except for: derivative financial instruments; financial assets classified as fair value through profit and loss or other comprehensive income; assets and liabilities acquired through business combinations, which are stated at fair value and retirement benefits. Non\u2011current assets and liabilities held for sale are stated at the lower of their carrying amounts and their fair values less costs to sell. The accounting policies described in the notes to the financial statements have been applied consistently throughout the Group for the purposes of these consolidated financial statements. i. New or amended UK Endorsed Accounting Standards adopted by the Group during 2023 Noted below are the amended and new International Financial Reporting Standards, which became effective for the Group as of 1 January 2023, none of which have a material impact on the financial statements: \u2013 Amendments to IFRS 17 Insurance contracts \u2013 Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements \u2013 Disclosure of Accounting Policies \u2013 Amendments to IAS 12 Income Taxes \u2013 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 Income Taxes \u2013 International Tax Reform \u2013 Pillar Two Model Rules \u2013 Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors \u2013 Definition of Accounting Estimates ii. New and revised accounting standards in issue but not yet effective New and revised accounting standards that are in issue but not yet effective are listed below: \u2013 Amendments to IFRS 10 and IAS 28 \u2013 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non\u2011current \u2013 Amendments to IAS 1 \u2013 Non\u2011current Liabilities with Covenants \u2013 Amendments to IAS 7 and IFRS 7 \u2013 Supplier Finance Arrangements \u2013 Amendments to IFRS 16 \u2013 Lease Liability in a Sale and Leaseback The adoption of the above standards and interpretations is not expected to lead to any changes to the Group\u2019s accounting policies or have any other material impact on the financial position or performance of the Group. Going concern Accounting standards require that directors satisfy themselves that it is reasonable for them to conclude whether it is appropriate to prepare financial statements on a going concern basis. The Group\u2019s business activities, together with the factors likely to affect its business development, performance and position, are set out in the Strategic Report. Principal risks are detailed on pages 91 to 99. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements. In addition, Note 18 includes; the Group\u2019s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. Note 14 to the financial statements addresses the management of the funding risks of the Group\u2019s employee benefit obligations. After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and for a period of at least twelve months (1 March 2025) following the approval of the Annual Report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The directors have considered the current macroeconomic conditions. The Group is well diversified and maintains a balanced portfolio
operating across a range of markets, sectors and geographies, with no single dependency. Performance in each of IMI\u2019s two platforms
has been robust during the year.
During this period of uncertainty, the Group continues to maintain a robust financial position. At 31 December 2023, the Group had
cash and cash equivalents of \u00a340.2m and undrawn committed facilities of \u00a3300m in the form of Revolving Credit Facilities (RCF),
of which \u00a3100m is due for renewal in 2024, \u00a375m in 2025, \u00a375m in 2026 and \u00a350m in 2027. Forecasts indicate that the Group can
operate within the level of facilities in place, without the need to obtain any new facilities in the twelve\u2011month period following the
approval of the Annual Report.
The directors have assessed the viability of the Group (page 100) and reviewed detailed cash flow forecasts for a period of at least
twelve months following the date of approval of the Annual Report. After applying a reverse stress test on the Group\u2019s banking
covenants and making comparisons to the detailed forecasts, the directors have a reasonable expectation that the financial headroom
will not be exhausted during this period.
Covenant compliance reviews are undertaken to ensure that the Group remains fully within the covenant limits. Funding covenants
currently require EBITDA to be no less than 4.0 times interest and net debt to be no more than 3.0 times EBITDA. Those covenant ratios,
at 31 December 2023, were 22.2 times and 1.3 times, respectively.
A reverse stress test shows that for there to be a breach of covenants during the twelve\u2011month period following the approval of the
Annual Report, forecast revenue would need to fall by 40% and forecast EBITDA by 63%, after taking into account the mitigating actions
that would be undertaken in these circumstances. The mitigating actions include, but are not limited to, reducing working capital, restricting
capital expenditure, reducing overhead spend and employee costs and cutting or suspending dividend payments to shareholders.
Climate Change
Climate change is considered to be a key element of our overall sustainability roadmap. In preparing the financial statements, the
directors have considered the impact of climate change, particularly in the context of the risks identified in the TCFD disclosures on
pages 61 to 81. There has been no material impact identified on the financial reporting judgements and estimates.
Overall, sustainability is recognised in the market as a growth driver and a key part of our investment case. This is consistent with our
assessment that climate change is not expected to have a detrimental impact on the viability of the Group in the medium\u2011term.
Specifically we note the following:
\u2013 The impact of climate change has been included in the modelling to assess the viability and going concern status of the Group, both
in terms of the preparation of our Strategic Plan, which underpins our viability statement modelling, and the modelling of our severe,
but plausible downside scenarios;
\u2013 Our assessment of the carrying value of goodwill and intangible assets included consideration of scenario analysis of potential climate
change on our end markets and this did not introduce a set of circumstances that could reasonably lead to an impairment; and
\u2013 The impact on the carrying value and useful lives of tangible assets has been considered and while we continue to invest in projects
to reduce our carbon impact, there is not considered to be a material impact on our existing asset base.
Restatements
2022 comparatives have been restated to reflect the impact of the following items:
Adjustments arising on prior year acquisitions
In finalising the accounting for the 2022 acquisitions of CorSolutions and Heatmiser, 2022 goodwill was decreased by \u00a336.3m at
31 December 2022 and allocated to Other intangible assets (increase of \u00a346.2m), Inventories (increase of \u00a31.4m), Trade and other
receivables (decrease of \u00a31.0m), Trade and other payables (decrease of \u00a31.7m), Deferred tax (decrease of \u00a311.6m) and Current tax
(decrease of \u00a30.4m). Refer to Note 23, which shows a reconciliation between the 2022 Consolidated Balance Sheet as disclosed
in the 2022 Annual Report and the restated 2022 Consolidated Balance Sheet as disclosed on page 186.
Adjustments arising on changes in structure
On 28 July 2023, the Group announced a structure change whereby the existing divisional structure, including IMI Critical Engineering,
IMI Precision Engineering and IMI Hydronic Engineering will now report under two platforms, Automation and Life Technology.
Industrial Automation (formerly part of the IMI Precision Engineering division) and Process Automation (formerly IMI Critical
Engineering) will form the Automation platform and Climate Control (formerly IMI Hydronic Engineering), Transport and Life Science
& Fluid Control (both formerly part of the IMI Precision Engineering division) will form the Life Technology platform. Rail, which
was previously reported under Transportation, has been re\u2011presented within Industrial Automation. As part of the 2022 restatement,
corporate costs of \u00a315.5m have been allocated to Automation and \u00a39.9m has been allocated to Life Technology. Refer to Note 4,
which shows the restated segmental analysis under the two new platforms.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-339": { "value": "Introduction IMI plc (the Company) is a company incorporated and domiciled in the United Kingdom. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the Group). The Company financial statements present information about the Company as a separate entity and not about the Group. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the UK. The Company financial statements have been prepared in accordance with International Accounting Standards (IAS) in conformity with the requirements of the Companies Act 2006 as applied in accordance with section 408 of the Companies Act 2006 and these are presented on pages 258 to 263. The financial statements were approved by the Board of Directors on 29 February 2024. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-3": { "value": "IMI plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-313": { "value": "IMI plc", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-311": { "value": "plc", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-4": { "value": "United Kingdom", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-312": { "value": "United Kingdom", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-366": { "value": "The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the UK. The Company financial statements have been prepared in accordance with International Accounting Standards (IAS) in conformity with the requirements of the Companies Act 2006 as applied in accordance with section 408 of the Companies Act 2006 and these are presented on pages 258 to 263. The financial statements were approved by the Board of Directors on 29 February 2024. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-340": { "value": "The financial statements are presented in Pounds Sterling (which is the Company\u2019s functional currency), rounded to the nearest hundred thousand, except revenues, which are rounded to the nearest whole million.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-341": { "value": "
i. New or amended UK Endorsed Accounting Standards adopted by the Group during 2023
Noted below are the amended and new International Financial Reporting Standards, which became effective for the Group
as of 1 January 2023, none of which have a material impact on the financial statements:
\u2013 Amendments to IFRS 17 Insurance contracts
\u2013 Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements \u2013
Disclosure of Accounting Policies
\u2013 Amendments to IAS 12 Income Taxes \u2013 Deferred Tax related to Assets and Liabilities arising from a Single Transaction
\u2013 Amendments to IAS 12 Income Taxes \u2013 International Tax Reform \u2013 Pillar Two Model Rules
\u2013 Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors \u2013 Definition of Accounting Estimates
ii. New and revised accounting standards in issue but not yet effective
New and revised accounting standards that are in issue but not yet effective are listed below:
\u2013 Amendments to IFRS 10 and IAS 28 \u2013 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
\u2013 Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non\u2011current
\u2013 Amendments to IAS 1 \u2013 Non\u2011current Liabilities with Covenants
\u2013 Amendments to IAS 7 and IFRS 7 \u2013 Supplier Finance Arrangements
\u2013 Amendments to IFRS 16 \u2013 Lease Liability in a Sale and Leaseback
The adoption of the above standards and interpretations is not expected to lead to any changes to the Group\u2019s accounting policies
or have any other material impact on the financial position or performance of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-367": { "value": "i. New or amended UK Endorsed Accounting Standards adopted by the Group during 2023 Noted below are the amended and new International Financial Reporting Standards, which became effective for the Group as of 1 January 2023, none of which have a material impact on the financial statements: \u2013 Amendments to IFRS 17 Insurance contracts \u2013 Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements \u2013 Disclosure of Accounting Policies \u2013 Amendments to IAS 12 Income Taxes \u2013 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 Income Taxes \u2013 International Tax Reform \u2013 Pillar Two Model Rules \u2013 Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors \u2013 Definition of Accounting Estimates ", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-368": { "value": "ii. New and revised accounting standards in issue but not yet effective New and revised accounting standards that are in issue but not yet effective are listed below: \u2013 Amendments to IFRS 10 and IAS 28 \u2013 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IAS 1 \u2013 Classification of Liabilities as Current or Non\u2011current \u2013 Amendments to IAS 1 \u2013 Non\u2011current Liabilities with Covenants \u2013 Amendments to IAS 7 and IFRS 7 \u2013 Supplier Finance Arrangements \u2013 Amendments to IFRS 16 \u2013 Lease Liability in a Sale and Leaseback The adoption of the above standards and interpretations is not expected to lead to any changes to the Group\u2019s accounting policies or have any other material impact on the financial position or performance of the Group. ", "dimensions": { "concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-342": { "value": "
Going concern
Accounting standards require that directors satisfy themselves that it is reasonable for them to conclude whether it is appropriate
to prepare financial statements on a going concern basis. The Group\u2019s business activities, together with the factors likely to affect its
business development, performance and position, are set out in the Strategic Report. Principal risks are detailed on pages 91 to 99.
The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in these financial statements.
In addition, Note 18 includes; the Group\u2019s objectives, policies and processes for managing its capital; its financial risk management
objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. Note 14 to the
financial statements addresses the management of the funding risks of the Group\u2019s employee benefit obligations.
After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to
continue in operational existence for the foreseeable future and for a period of at least twelve months (1 March 2025) following the
approval of the Annual Report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The directors have considered the current macroeconomic conditions. The Group is well diversified and maintains a balanced portfolio operating across a range of markets, sectors and geographies, with no single dependency. Performance in each of IMI\u2019s two platforms has been robust during the year. During this period of uncertainty, the Group continues to maintain a robust financial position. At 31 December 2023, the Group had cash and cash equivalents of \u00a340.2m and undrawn committed facilities of \u00a3300m in the form of Revolving Credit Facilities (RCF), of which \u00a3100m is due for renewal in 2024, \u00a375m in 2025, \u00a375m in 2026 and \u00a350m in 2027. Forecasts indicate that the Group can operate within the level of facilities in place, without the need to obtain any new facilities in the twelve\u2011month period following the approval of the Annual Report. The directors have assessed the viability of the Group (page 100) and reviewed detailed cash flow forecasts for a period of at least twelve months following the date of approval of the Annual Report. After applying a reverse stress test on the Group\u2019s banking covenants and making comparisons to the detailed forecasts, the directors have a reasonable expectation that the financial headroom will not be exhausted during this period. Covenant compliance reviews are undertaken to ensure that the Group remains fully within the covenant limits. Funding covenants currently require EBITDA to be no less than 4.0 times interest and net debt to be no more than 3.0 times EBITDA. Those covenant ratios, at 31 December 2023, were 22.2 times and 1.3 times, respectively. A reverse stress test shows that for there to be a breach of covenants during the twelve\u2011month period following the approval of the Annual Report, forecast revenue would need to fall by 40% and forecast EBITDA by 63%, after taking into account the mitigating actions that would be undertaken in these circumstances. The mitigating actions include, but are not limited to, reducing working capital, restricting capital expenditure, reducing overhead spend and employee costs and cutting or suspending dividend payments to shareholders. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-343": { "value": "Climate Change Climate change is considered to be a key element of our overall sustainability roadmap. In preparing the financial statements, the directors have considered the impact of climate change, particularly in the context of the risks identified in the TCFD disclosures on pages 61 to 81. There has been no material impact identified on the financial reporting judgements and estimates. Overall, sustainability is recognised in the market as a growth driver and a key part of our investment case. This is consistent with our assessment that climate change is not expected to have a detrimental impact on the viability of the Group in the medium\u2011term. Specifically we note the following: \u2013 The impact of climate change has been included in the modelling to assess the viability and going concern status of the Group, both in terms of the preparation of our Strategic Plan, which underpins our viability statement modelling, and the modelling of our severe, but plausible downside scenarios; \u2013 Our assessment of the carrying value of goodwill and intangible assets included consideration of scenario analysis of potential climate change on our end markets and this did not introduce a set of circumstances that could reasonably lead to an impairment; and \u2013 The impact on the carrying value and useful lives of tangible assets has been considered and while we continue to invest in projects to reduce our carbon impact, there is not considered to be a material impact on our existing asset base. ", "dimensions": { "concept": "imiplc:DescriptionOfAccountingPolicyForClimateChange", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-344": { "value": "Restatements 2022 comparatives have been restated to reflect the impact of the following items: Adjustments arising on prior year acquisitions In finalising the accounting for the 2022 acquisitions of CorSolutions and Heatmiser, 2022 goodwill was decreased by \u00a336.3m at 31 December 2022 and allocated to Other intangible assets (increase of \u00a346.2m), Inventories (increase of \u00a31.4m), Trade and other receivables (decrease of \u00a31.0m), Trade and other payables (decrease of \u00a31.7m), Deferred tax (decrease of \u00a311.6m) and Current tax (decrease of \u00a30.4m). Refer to Note 23, which shows a reconciliation between the 2022 Consolidated Balance Sheet as disclosed in the 2022 Annual Report and the restated 2022 Consolidated Balance Sheet as disclosed on page 186. Adjustments arising on changes in structure On 28 July 2023, the Group announced a structure change whereby the existing divisional structure, including IMI Critical Engineering, IMI Precision Engineering and IMI Hydronic Engineering will now report under two platforms, Automation and Life Technology. Industrial Automation (formerly part of the IMI Precision Engineering division) and Process Automation (formerly IMI Critical Engineering) will form the Automation platform and Climate Control (formerly IMI Hydronic Engineering), Transport and Life Science & Fluid Control (both formerly part of the IMI Precision Engineering division) will form the Life Technology platform. Rail, which was previously reported under Transportation, has been re\u2011presented within Industrial Automation. As part of the 2022 restatement, corporate costs of \u00a315.5m have been allocated to Automation and \u00a39.9m has been allocated to Life Technology. Refer to Note 4, which shows the restated segmental analysis under the two new platforms.", "dimensions": { "concept": "imiplc:DisclosureOfRestatements", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-314": { "value": "
2. Significant accounting policies
Where appropriate, the significant accounting policies are presented in the note to which it applies to aid the reader\u2019s understanding
of their application. Set out below are the significant accounting policies that do not have a specific note.
A. Subsidiaries
The Group financial statements consolidate the financial statements of IMI plc and the entities it controls (its subsidiaries) for the year
to 31 December 2023. The Group has no significant interests which are accounted for as associates or joint ventures.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies
of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights, currently
exercisable or convertible potential voting rights, or by way of contractual agreement. The financial statements of subsidiaries used in
the preparation of the consolidated financial statements are prepared for the same reporting year as the parent company and are based
on consistent accounting policies. All intragroup balances and transactions, including unrealised profits arising from them, are
eliminated in full.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it:
\u2013 derecognises the assets (including any goodwill relating to the subsidiary) and liabilities of the subsidiary;
\u2013 derecognises the carrying amount of any non\u2011controlling interest;
\u2013 derecognises the cumulative translation differences recorded in equity;
\u2013 recognises the fair value of the consideration received;
\u2013 recognises the fair value of any investment retained;
\u2013 recognises any surplus or deficit in profit or loss; and
\u2013 reclassifies the parent\u2019s share of components previously recognised in other comprehensive income to profit or loss or retained
earnings, as appropriate.
Taxation on the above accounting entries would also be recognised, where applicable.
B. Use of critical judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates.
i. Critical judgements
The critical judgements are the identification of the Alternative Performance Measures as disclosed in Note 3.
ii. Key sources of estimation uncertainty
The Group bases its assumptions and estimates on information available when the consolidated financial statements are prepared.
Market changes or circumstances arising beyond the control of the Group are reflected in the assumptions and estimates when they
occur. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are
disclosed in Note 14 \u2018Retirement benefits\u2019.
iii. Changes in critical judgements and key sources of estimation uncertainty
Management has reassessed the critical judgements and key sources of estimation uncertainty presented in the 2022 Annual Report
and concluded that the determination of a lease term previously considered a critical judgement is no longer considered critical on
the basis that the financial impact of revising lease terms to reflect the effect of exercising extension or termination options is no
longer materially significant.
C. Revenue recognition
Revenue is recognised when obligations under the terms of a contract with our customer are satisfied. This generally occurs when the
goods are transferred, or the services are provided, to our customer. Revenue is measured as the amount of consideration we expect
to receive in exchange for transferring goods or providing services. Sales and other taxes collected from customers are excluded from
revenue. The nature of the equipment, valve and other contracts into which the Group enters means that:
\u2013 the contracts usually contain distinct performance obligations, each of which transfers control of the goods to the customer. Where
such distinct performance obligations are present, revenue is recognised on each element in accordance with the policy on the sale
of goods; and
\u2013 the service element of the contract is usually insignificant in relation to the total contract value and is often provided on a short\u2011term
or one\u2011off basis. Where this is the case, revenue is recognised when the service is complete
As a result of the above, the significant majority of the Group\u2019s revenue is recognised on a sale of goods basis. Each of the platform\u2019s
revenue streams set out in Note 4 can consist of the sale of goods, the provision of services or a combination of the two. The specific
methods used to recognise the different forms of revenue earned by the Group are set out below:
i. Sale of goods
Revenue from the sale of goods is recognised in the income statement net of returns, trade discounts and volume rebates when control
has been transferred to our customer. No revenue is recognised where recovery of the consideration is not probable or if there are
significant uncertainties regarding associated costs or the possible return of goods.
In Climate Control, the amount of consideration received and the revenue recognised varies in line with discounts and promotions
offered to our customers and their customers. The level of estimation uncertainty associated with variable consideration is minimal,
as discounts and rebates are accounted for at the point of sale and adjusted as required at each financial year\u2011end.
The timing of the transfer of control to our customer varies depending on the nature of the products sold and the individual terms
of the contract of sale. Sales made under internationally accepted trade terms, Incoterms 2020, are recognised as revenue when the
Group has completed the primary duties required to transfer control as defined by the International Chamber of Commerce Official
Rules for the Interpretation of Trade Terms. Sales made outside Incoterms 2020 are generally recognised on delivery to the customer.
In limited instances, a customer may request that the Group retains physical possession of an asset for a period after control has been
transferred to the customer. In these circumstances, the Group provides this storage as a service to the customer and, therefore,
revenue is recognised prior to delivery of the asset.
ii. Rendering of services
Servicing relates to repairs and maintenance activity that is completed at our customer sites within our installed base. Revenue from the
rendering of services is usually insignificant in relation to the total contract value and is generally provided on a short\u2011term or one\u2011off
basis. Accordingly, revenue is usually recognised when the service is complete.
Where this is not the case, revenue from services rendered is recognised in proportion to the stage of completion of the service at the
balance sheet date.
The stage of completion is assessed by reference to the contractual performance obligations with each separate customer and
the costs incurred on the contract to date in comparison to the total forecast costs of the contract. Revenue recognition commences
only when the outcome of the contract can be reliably measured. Installation fees are similarly recognised by reference to the stage
of completion on the installation unless they are incidental to the sale of the goods, in which case they are recognised when the goods
are sold.
iii. Combined services and goods
When a transaction combines a supply of goods with the provision of a significant service, distinct performance obligations are identified
and recognised in line with the applicable policy. Revenue from a service that is incidental to the supply of goods is recognised at the
same time as the revenue from the supply of goods.
D. Foreign currencies
i. Foreign currency transactions
Monetary assets and liabilities denominated in foreign currencies have been translated into Sterling at the rates of exchange ruling at the
balance sheet date. Foreign exchange differences arising on translating transactions at the exchange rate ruling on the transaction date
are reflected in the income statement. Non\u2011monetary assets and liabilities that are measured at historical cost in a foreign currency are
translated using the exchange rates at the date of the transaction. Non\u2011monetary assets and liabilities denominated in foreign currencies
that are stated at fair value are translated into Sterling at foreign exchange rates ruling at the balance sheet date.
ii. Foreign operations
The income statements of overseas subsidiary undertakings are translated at the appropriate average rate of exchange for the year,
and the adjustment to year\u2011end rates is taken directly to reserves.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated
at foreign exchange rates ruling at the balance sheet date.
Foreign exchange differences arising on retranslation are recognised directly as a separate component of equity. Since 1 January 2004,
the Group\u2019s date of transition to IFRS, such differences have been recognised in the translation reserve. When a foreign operation is
disposed of, either in part or in full, the relevant amount in the translation reserve is transferred to profit or loss.
E. Financial instruments and fair value hedging
Financial instruments are initially recorded at fair value plus directly attributable transaction costs unless the instrument is a derivative
not designated as a hedge (see below). Subsequent measurement depends on the designation of the instrument, which follows the
categories in IFRS 9:
\u2013 short\u2011term borrowings and overdrafts are classified as financial liabilities at amortised cost;
\u2013 derivatives, comprising interest rate swaps, foreign exchange contracts and options, metals futures contracts and any embedded
derivatives, are classified as \u2018fair value through profit or loss\u2019 under IFRS 9, unless designated as hedges. Derivatives not designated as
hedges are initially recognised at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent
to initial recognition, changes in fair value of such derivatives and gains or losses on their settlement are recognised in net financial
income or expense;
\u2013 long\u2011term loans and other interest bearing borrowings are generally held at amortised cost using the effective interest rate method.
Where the long\u2011term loan is hedged, generally by an interest rate swap, and the hedge is regarded as effective, the carrying value
of the long\u2011term loan is adjusted for changes in fair value of the hedge;
\u2013 trade receivables are stated at cost as reduced by appropriate impairment allowances for expected irrecoverable amounts;
\u2013 trade payables are stated at cost;
\u2013 financial assets and liabilities are recognised on the balance sheet only when the Group becomes a party to the contractual provisions
of the instrument; and
\u2013 fair value through other comprehensive income (FVTOCI) financial instruments are carried at fair value with gains and losses being
recognised in equity, and represent investments.
i. Derecognition of financial instruments
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers
nor retains substantially all of the risks and rewards of ownership and continues to control the transferred asset, the Group recognises
its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks
and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset\u2019s carrying amount and the sum
of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt
instrument classified as FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified
to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial
recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not
reclassified to profit or loss, but is transferred to retained earnings.
The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised
in profit or loss.
When the Group exchanges with the existing lender one debt instrument into another one, with substantially different terms, such
exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the
Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability
and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash
flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate is at
least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not
substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash
flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses.
ii. Derecognition of hedging arrangements
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria
(after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised.
The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated
in cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs.
When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified
immediately to profit or loss.
F. Other hedging
i. Hedge of monetary assets and liabilities, financial commitments or forecast transactions
Where a derivative financial instrument is used as an economic hedge of the foreign exchange or metals commodity price exposure
of a recognised monetary asset or liability, financial commitment or forecast transaction, but does not meet the criteria to qualify for
hedge accounting under IFRS 9, no hedge accounting is applied and any gain or loss resulting from changes in fair value of the hedging
instrument is recognised in net financial income or expense.
Where such a derivative is a formally designated hedge of a forecast transaction for accounting purposes, movements in the value
of the derivative are recognised directly in other comprehensive income to the extent the hedge is effective. The Group assesses the
effectiveness of the hedge based on the expected fair value of the amount to be received and the movement in the fair value of the
derivative designated as the hedge.
For segmental reporting purposes, changes in the fair value of economic hedges that are not designated hedges, which relate to current
year trading, together with the gains and losses on their settlement, are allocated to the operating profit of the relevant business segment.
ii. Hedge of net investment in foreign operations
Where a foreign currency liability or derivative financial instrument is a formally designated hedge of a net investment in a foreign
operation, foreign exchange differences arising on translation of the foreign currency liability or changes in the fair value of the financial
instrument are recognised directly in equity via other comprehensive income, to the extent the hedge is effective. The Group assesses
the effectiveness of its net investment hedges based on fair value changes of its net assets, including relevant goodwill designated as
foreign currency assets, and the fair value changes of both the debt designated as a hedge and the relevant financial instrument.
G. Investments not held for trading
Investments that are designated as being not held for trading are initially recognised at fair value. Subsequently, the fair value of the
investment is reassessed at each balance sheet date, with movements in the fair value recognised in other comprehensive income.
In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial recognition to measure
at fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the investments revaluation
reserve is not reclassified to profit or loss, but is transferred to retained earnings.
H. Discontinued operations
When the Group has assets and liabilities that have been sold in the year or are likely to be sold rather than being held for continuing
use, these assets and liabilities are included in current assets and liabilities and denoted \u2018held for sale\u2019 rather than in their usual
categories. They are recognised at the lower of carrying amount and fair value less costs to sell. Impairment losses on the initial
classification of assets held for sale are included in the income statement, even for assets measured at fair value, as are impairment
losses on subsequent remeasurement and any reversal thereof. Once classified as held for sale, assets are no longer depreciated
or amortised.
If they represent a significant enough proportion of the Group, they are also treated as discontinued operations. A discontinued
operation is a component of the Group\u2019s business that represents a separate major line of business that has been disposed of, is held
for sale or is a subsidiary acquired exclusively with a view to resale. This means that their trading performance, i.e., their revenues, costs
and other items of income and expense, are no longer reported within the headline figures in the income statement and are instead
reported in a separate line, net of tax, called \u2018discontinued operations\u2019. These amounts no longer form part of continuing earnings per
share. Comparative figures are re\u2011presented to be shown on the same basis.
This enables the income statement for the current and prior year to be presented on a consistent basis and to convey a more
forward\u2011looking version of the results for the year.
Accounting policy
The Group\u2019s policy is to exclude items from underlying performance that are considered to be significant in nature (i.e., outside of
the normal course of business) and/or quantum and where treatment as an adjusting item provides stakeholders with additional
useful information to assess period\u2011on\u2011period trading performance of the Group.
The Group believes that APMs, which are not considered to be a substitute for, or superior to, IFRS measures, provide stakeholders
with additional helpful information on the performance of the business. These APMs are consistent with how the business
performance is planned and reported within the internal management reporting to the Board and Executive Committee. Some of
these measures are also used for the purpose of setting remuneration targets and for banking covenants.
The adjusting items in the income statement and the reasons these are considered to be adjusting items are detailed below:
\u2013 Costs associated with major restructuring projects \u2013 these costs are reported as adjusting items on the basis that they are
significant in quantum, relate to specific, approved strategic initiatives following reviews of our organisation structure during
the period and to provide stakeholders with comparability of underlying results from one period to the next, including dual
running costs. Restructuring costs that are not considered to be major or one\u2011off are included within underlying results in the
Consolidated Income Statement
\u2013 Impairment losses \u2013 impairment losses treated as adjusting items include those which are large in quantum or one\u2011off in nature
and, as a result, are not considered to be usual operating costs of the Group. In addition to this, impairment losses associated
with major restructuring projects are considered to be part of the overall project and therefore follow the same treatment as
restructuring projects, as described above. Impairment losses incurred, which are not significant or do not form part of a major
restructuring project are recorded as adjusted items. All impairment losses recorded as adjusting items in the current and prior
period relate to restructuring projects treated as adjusting items
\u2013 Gains and losses on property disposals \u2013 significant quantum gains and losses on property disposals are not considered to relate
to the underlying trading of the business and are therefore treated as adjusting items. All gains and losses on property disposals
associated with major restructuring projects are considered to be part of the overall project and therefore follow the same
treatment as restructuring projects, as described above
\u2013 Acquired intangible amortisation \u2013 the amortisation charge is not considered to be related to the underlying performance of
the Group and can fluctuate materially period\u2011on\u2011period as new businesses are acquired. All acquired intangible amortisation
is treated as an adjusting item due to its nature. The trading results of acquired businesses are included in the adjusted results
\u2013 Gains and losses on disposal of subsidiaries \u2013 due to their one\u2011off nature and large quantum, gains and losses on disposals
are treated as adjusting items. If these gains or losses are not considered to be one\u2011off or material, these amounts would be
included within underlying results. This also includes the impact of the exit from Russia \u2013 the loss on disposal of the Group\u2019s
Russian subsidiary and impairment of assets related to Russian contracts
\u2013 The reversal of gains and losses on economic hedges \u2013 gains and losses on economic hedges are treated as an adjusting item
on a qualitative basis. The adjusting item reverses the treatment taken locally by the Group\u2019s businesses, where the impact of
foreign currency forwards and commodity hedges are booked at the hedged rate in the adjusted results of the local businesses.
In compliance with IFRS 9 \u2018Financial Instruments\u2019, these do not meet the requirement of an effective hedge and are therefore
adjusted to be booked at the spot rate. The recognition of the gain and losses on the hedged items is recorded as a financing
item, including any unrealised gains and losses
\u2013 Other acquisition costs \u2013 for an acquired business, the acquisition costs which are primarily advisor and legal fees and the
one\u2011off write\u2011off of the inventory uplift to fair value do not reflect trading performance and so are treated as adjusting items
to ensure consistency between periods
\u2013 Special pension events \u2013 due to their one\u2011off nature and typically large quantum, special pension events are treated as adjusting
items. Special pension events which are not significant are recorded as adjusting items. There are no special pension events
recorded as adjusting items in the current or prior period
\u2013 Tax effect on adjusting items above \u2013 any tax effect of the above items is treated as an adjusting item
\u2013 Other tax items \u2013 an assessment is made, on a case\u2011by\u2011case basis, for one\u2011off tax items which significantly impact the Group\u2019s
results to determine whether the item should be treated as an adjusting item
The policies outlined above are consistent with the policies adopted in the previous period.
Movements in revenue and adjusted operating profit are given on an organic basis (see definition below) so that performance is not
distorted by acquisitions, disposals and movements in exchange rates.
The directors\u2019 commentary discusses these APMs to remove the effects of items of both income and expense that are considered
different in nature from the underlying trading and normal quantum and where treatment as an adjusting item provides
stakeholders with additional information to assess period\u2011on\u2011period trading.
Critical judgement
Management have applied judgement in the identification of the APMs used in the Annual Report. The APMs presented are used in
discussions with the investment analyst community and by the Board and management to monitor the trading performance of
the Group.
Accounting policy
The fair value of the employee services received in exchange for the grant of the options is recognised as an expense each year.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted,
excluding the impact of any non\u2011market vesting conditions (for example, profitability and sales growth targets). Non\u2011market
vesting conditions are included in assumptions about the number of options that are expected to become exercisable. The fair
value of the options is determined based on the Monte Carlo and Black\u2011Scholes option\u2011pricing models.
At each balance sheet date, the Group revises its estimates of the number of options that are expected to vest. It recognises the
impact of the revision of original estimates, if any, in the income statement.
For newly issued shares, the proceeds received net of any directly attributable transaction costs are credited to share capital
(nominal value) and share premium when the options are exercised.
Accounting policy
Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that
are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account
the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared.
Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related
element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense
component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates.
Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between
employee benefit plan liabilities and the employee benefit plan assets.
The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing
costs are excluded from adjusted earnings.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other
borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs
in connection with the borrowing of funds.
Accounting policy
Current tax payable/receivable represents the expected tax payable/receivable on the taxable profits for the year, using tax rates
enacted or substantively enacted at the balance sheet date and taking into account any adjustments in respect of prior years.
Deferred tax is provided, using the balance sheet method, on temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the
following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in
subsidiaries to the extent that the timing of the reversal of the differences can be controlled and it is probable that the differences
will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to apply when the temporary
differences reverse, based on the tax laws that have been enacted or substantively enacted by the balance sheet date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax
liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entities or different taxable entities where there is an intention to settle the balances on a net basis.
The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred
taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related
to the OECD Inclusive Framework agreement for a global minimum corporate income tax rate.
In common with many multinational companies, IMI faces tax audits in jurisdictions around the world, including in relation to the
transfer pricing of goods and services between associated entities within the Group, the outcomes of which are uncertain. These
tax audits may be subject to inter\u2011government negotiations. The matters under discussion are often complex and can take many
years to resolve. Tax liabilities are recorded based on Management\u2019s estimate of either the most likely amount or the expected
amount depending on which method is expected to better reflect the resolution of the uncertainty.
Accounting policy
Dividends are recognised as a liability in the period in which they are approved by shareholders.
Accounting policy
Intangible assets are disclosed as acquired intangible assets and non\u2011acquired intangible assets. Amortisation of acquired intangible
assets is treated as an adjusting item, as described in Note 3, as the impact of any acquisitions, which are clearly identifiable,
can materially impact the net book value, from period to period.
i. Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition date fair value of the consideration
transferred over the net identifiable amounts of the assets acquired and the liabilities assumed for the business combination. After
initial recognition, goodwill is measured at cost, less any accumulated impairment losses. The value of the goodwill can arise from
a number of sources, but in relation to our more recent acquisitions, it has been represented by post\u2011acquisition synergies and the
skills and knowledge of the workforce.
ii. Research and Development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding,
is recognised in the income statement as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or
substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if,
and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention
to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable
overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised
development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy
\u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin.
iii. Software development costs
Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition
as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset
to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation
(see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or
other non\u2011acquired category of intangible assets depending on their origin.
iv. Customer relationships and other acquired intangible assets
Customer relationships and other intangible assets that are acquired by the Group as part of a business combination are stated
at their fair value calculated by reference to the net present value of future benefits accruing to the Group from utilisation of the
asset, discounted at an appropriate discount rate.
Expenditure on other internally generated intangible assets is recognised in the income statement as an expense as incurred.
v. Amortisation of intangible assets other than goodwill
Amortisation is charged to the income statement on a straight\u2011line basis (other than for customer relationships and order book,
which are charged on a sum of digits basis) over the estimated useful lives of the intangible assets. Amortisation commences
from the date the intangible asset becomes available for use. The estimated useful lives for:
\u2013 Capitalised development costs are the life of the intangible asset (usually a maximum of 17 years)
\u2013 Software development costs are the life of the intangible asset (up to 17 years)
\u2013 Customer relationships are the life of the intangible asset (up to 17 years)
\u2013 Other intangible assets (including order books, brands and software) are the life of the intangible asset (up to 10 years)
The Group splits its intangible assets between those arising on acquisitions and those which do not, because the amortisation
of acquired intangibles is recognised as an adjusting item in the income statement.
Accounting policy
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each
of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows
are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to
review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the
lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an
operating segment before aggregation.
Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the
operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and
the portion of the CGU retained.
Impairment
The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance
sheet date to determine whether impairment indicators exist.
If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised
whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the
income statement.
For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date.
The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value
in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s
long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present
value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon
both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment
opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the
smallest cash\u2011generating unit to which the asset belongs.
Reversals of impairment
Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there
are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Accounting policy
Freehold land and assets in the course of construction are not depreciated.
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 11).
Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted
for as separate items of property, plant and equipment. Costs in respect of tooling owned by the Group for clearly identifiable
new products are capitalised net of any contribution received from customers and are included in plant and equipment.
Depreciation is charged to the income statement, from the date the asset is brought in to use, on a straight\u2011line basis (unless such
a basis is not aligned with the anticipated benefit) so as to write down the cost of assets to residual values over the period of their
estimated useful lives within the following ranges:
\u2013 Freehold buildings \u2013 25 to 50 years
\u2013 Plant and equipment \u2013 3 to 20 years
The useful lives of assets could be reduced by climate\u2011related matters, for example as a result of physical risks, obsolescence, or legal
restrictions. The change in useful lives would have a direct impact on the amount of depreciation or amortisation recognised each
year from the date of reassessment.
Assets in the course of construction comprise assets that are not currently ready to be brought in to use. Assets under construction
are not depreciated.
If there has been a technological change or decline in business performance, the directors review the value of the assets to ensure
they have not fallen below their depreciated value. If an asset\u2019s value falls below its depreciated value, a one\u2011off impairment charge
is made against profit.
Accounting policy
The Group leases various properties, plant, equipment and cars. Rental contracts are negotiated individually and have a range of
initial terms, and may have extension options. The lease agreements do not impose any covenants, but leased assets may not be
used as security for borrowing purposes.
Leases are recognised as a right\u2011of\u2011use asset and a corresponding liability at the date at which the leased asset is available for use
by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income
statement over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The right\u2011of\u2011use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight\u2011line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of:
i. fixed payments less any lease incentives receivable;
ii. variable lease payments that are based on an index or a rate;
iii. amounts expected to be payable by the Group under residual value guarantees;
iv. the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
v. payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the entity\u2019s
incremental borrowing rate is used, being the rate that the entity would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions.
Right\u2011of\u2011use assets are measured at cost, comprising:
i. the amount of the initial measurement of lease liability;
ii. any lease payments made at or before the commencement date less any lease incentives received; and
iii. restoration costs.
Payments associated with short\u2011term leases and leases of low\u2011value assets are recognised on a straight\u2011line basis as an expense
in profit or loss. Short\u2011term leases are leases with a lease term of 12 months or less. Low\u2011value assets comprise IT\u2011equipment
and small items of office furniture.
Extension and termination options \u2013 Extension and termination options are included in a number of property and equipment
leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority
of extension and termination options held are exercisable only by the Group and not by the respective lessor.
Accounting policy
i. Defined contribution (DC) pension plans
Arrangements where the employer pays fixed contributions into an external fund on behalf of the employee (who is responsible
for making the investment decision and, therefore, assumes the risks and rewards of fund performance).
Contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.
ii. Defined benefit (DB) pension plans
A defined benefit pension plan is a pension arrangement in which the employer promises a specified annual benefit on retirement
that is predetermined by a formula based on the employee\u2019s earnings history, tenure of service and age, rather than depending
directly on individual investment returns. In some cases, this benefit is paid as a lump sum on leaving the Company or while
in the service of the Company, rather than as a pension. The Group underwrites one or more risks in meeting these obligations
and therefore any net liability or surplus in these arrangements is shown on the Group balance sheet.
The Group\u2019s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the
amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is
discounted to determine its present value, and the fair value of any plan assets are deducted. Past service costs are recognised in
profit or loss on the earlier of the date of the plan amendment or curtailment, and the date that the Group recognises restructuring\u2011
related costs. The discount rate is the yield at the balance sheet date on high\u2011quality corporate bonds of the appropriate currency
that have durations approximating those of the Group\u2019s obligations. The calculation is performed by a qualified actuary using the
projected unit credit method. At each year\u2011end the Company and the local actuaries consider whether the plans are affected by the
asset ceiling requirements. When the calculation results in a net asset to the Group, the recognised asset is limited to the present
value of any future refunds from the plan or reductions in future contributions to the plan and restricted by any relevant asset ceiling.
Any deduction made by the tax authorities in the event of a refund of a surplus would be regarded by the Group as an income tax.
When the benefits of a plan are improved, the expense is recognised immediately in the income statement. Remeasurement gains
and losses are recognised immediately in equity and disclosed in the statement of comprehensive income.
iii. Long-term service and other post-employment benefits
The Group\u2019s net obligation in respect of long\u2011term service and other post\u2011employment benefits, other than pension plans, is the
amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation
is calculated using the projected unit credit method and is discounted to its present value, and the fair value of any related assets
is deducted. The discount rate is the yield at the balance sheet date on high\u2011quality bonds of the appropriate currency that have
durations approximating those of the Group\u2019s obligations.
Accounting policy
Inventories are valued at the lower of cost and net realisable value. Due to the varying nature of the Group\u2019s operations, both first
in, first out and weighted average methodologies are employed. In respect of work in progress and finished goods, cost includes
all direct costs of production and the appropriate proportion of production overheads.
The Group sells a wide range of highly technical products and whilst they are designed and engineered to a high degree of
precision and to customer specifications, there is a risk of products requiring modification, which can lead to excess or obsolete
inventory. The amount of inventory provision recognised is disclosed below.
Accounting policy
The recoverable amount of the Group\u2019s receivables other than financial assets held at fair value is calculated as the present value of
expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration
of less than one year are not discounted. Other receivables comprise various assets across the Group, including sales tax
receivables and other non\u2011trade balances.
The expected credit loss is calculated based on the ageing of individual customers\u2019 receivables, giving consideration to the
geographical location in which they operate, historical collectability and the customer\u2019s financial position, where this information
is known.
Accounting policy
A provision is recorded instead of a payable when uncertainty exists over the timing and amount of the cash outflow. Provisions are
recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow
of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are valued at Management\u2019s
best estimate of the amount required to settle the present obligation at the balance sheet date.
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring
has either commenced or has been announced publicly.
The recognition of a provision requires estimation. The principal estimates made in respect of the Group\u2019s provisions using the best
estimate methodology (with the exception of indemnity provisions as noted below) concern the timing and amount of payments
required to:
\u2013 cover the costs of known restructuring projects;
\u2013 reimburse customers for potential product warranty claims;
\u2013 ensure that current and former manufacturing sites meet relevant environmental standards;
\u2013 reflect the estimated outcome of ongoing legal disputes; and
\u2013 provide against indemnities following the disposal of subsidiaries.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-392": { "value": "A. Subsidiaries The Group financial statements consolidate the financial statements of IMI plc and the entities it controls (its subsidiaries) for the year to 31 December 2023. The Group has no significant interests which are accounted for as associates or joint ventures. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights, currently exercisable or convertible potential voting rights, or by way of contractual agreement. The financial statements of subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting year as the parent company and are based on consistent accounting policies. All intragroup balances and transactions, including unrealised profits arising from them, are eliminated in full. A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: \u2013 derecognises the assets (including any goodwill relating to the subsidiary) and liabilities of the subsidiary; \u2013 derecognises the carrying amount of any non\u2011controlling interest; \u2013 derecognises the cumulative translation differences recorded in equity; \u2013 recognises the fair value of the consideration received; \u2013 recognises the fair value of any investment retained; \u2013 recognises any surplus or deficit in profit or loss; and \u2013 reclassifies the parent\u2019s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate. Taxation on the above accounting entries would also be recognised, where applicable. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-421": { "value": "B. Use of critical judgements and key sources of estimation uncertainty The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. i. Critical judgements The critical judgements are the identification of the Alternative Performance Measures as disclosed in Note 3. ii. Key sources of estimation uncertainty The Group bases its assumptions and estimates on information available when the consolidated financial statements are prepared. Market changes or circumstances arising beyond the control of the Group are reflected in the assumptions and estimates when they occur. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are disclosed in Note 14 \u2018Retirement benefits\u2019. iii. Changes in critical judgements and key sources of estimation uncertainty Management has reassessed the critical judgements and key sources of estimation uncertainty presented in the 2022 Annual Report and concluded that the determination of a lease term previously considered a critical judgement is no longer considered critical on the basis that the financial impact of revising lease terms to reflect the effect of exercising extension or termination options is no longer materially significant.
Key source of estimation uncertainty
The present value of the Group\u2019s defined benefit pension plans and other post\u2011employment benefits are determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future.
These include the determination of the discount rate, inflation, future salary increases, mortality rates and future pension increases.
The assumptions used and analysis of their sensitivity is set out below. Due to the complexity of the valuation and its long\u2011term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-393": { "value": "C. Revenue recognition Revenue is recognised when obligations under the terms of a contract with our customer are satisfied. This generally occurs when the goods are transferred, or the services are provided, to our customer. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Sales and other taxes collected from customers are excluded from revenue. The nature of the equipment, valve and other contracts into which the Group enters means that: \u2013 the contracts usually contain distinct performance obligations, each of which transfers control of the goods to the customer. Where such distinct performance obligations are present, revenue is recognised on each element in accordance with the policy on the sale of goods; and \u2013 the service element of the contract is usually insignificant in relation to the total contract value and is often provided on a short\u2011term or one\u2011off basis. Where this is the case, revenue is recognised when the service is complete As a result of the above, the significant majority of the Group\u2019s revenue is recognised on a sale of goods basis. Each of the platform\u2019s revenue streams set out in Note 4 can consist of the sale of goods, the provision of services or a combination of the two. The specific methods used to recognise the different forms of revenue earned by the Group are set out below: i. Sale of goods Revenue from the sale of goods is recognised in the income statement net of returns, trade discounts and volume rebates when control has been transferred to our customer. No revenue is recognised where recovery of the consideration is not probable or if there are significant uncertainties regarding associated costs or the possible return of goods. In Climate Control, the amount of consideration received and the revenue recognised varies in line with discounts and promotions offered to our customers and their customers. The level of estimation uncertainty associated with variable consideration is minimal, as discounts and rebates are accounted for at the point of sale and adjusted as required at each financial year\u2011end. The timing of the transfer of control to our customer varies depending on the nature of the products sold and the individual terms of the contract of sale. Sales made under internationally accepted trade terms, Incoterms 2020, are recognised as revenue when the Group has completed the primary duties required to transfer control as defined by the International Chamber of Commerce Official Rules for the Interpretation of Trade Terms. Sales made outside Incoterms 2020 are generally recognised on delivery to the customer. In limited instances, a customer may request that the Group retains physical possession of an asset for a period after control has been transferred to the customer. In these circumstances, the Group provides this storage as a service to the customer and, therefore, revenue is recognised prior to delivery of the asset. ii. Rendering of services Servicing relates to repairs and maintenance activity that is completed at our customer sites within our installed base. Revenue from the rendering of services is usually insignificant in relation to the total contract value and is generally provided on a short\u2011term or one\u2011off basis. Accordingly, revenue is usually recognised when the service is complete. Where this is not the case, revenue from services rendered is recognised in proportion to the stage of completion of the service at the balance sheet date. The stage of completion is assessed by reference to the contractual performance obligations with each separate customer and the costs incurred on the contract to date in comparison to the total forecast costs of the contract. Revenue recognition commences only when the outcome of the contract can be reliably measured. Installation fees are similarly recognised by reference to the stage of completion on the installation unless they are incidental to the sale of the goods, in which case they are recognised when the goods are sold. iii. Combined services and goods When a transaction combines a supply of goods with the provision of a significant service, distinct performance obligations are identified and recognised in line with the applicable policy. Revenue from a service that is incidental to the supply of goods is recognised at the same time as the revenue from the supply of goods. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-394": { "value": "D. Foreign currencies i. Foreign currency transactions Monetary assets and liabilities denominated in foreign currencies have been translated into Sterling at the rates of exchange ruling at the balance sheet date. Foreign exchange differences arising on translating transactions at the exchange rate ruling on the transaction date are reflected in the income statement. Non\u2011monetary assets and liabilities that are measured at historical cost in a foreign currency are translated using the exchange rates at the date of the transaction. Non\u2011monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into Sterling at foreign exchange rates ruling at the balance sheet date. ii. Foreign operations The income statements of overseas subsidiary undertakings are translated at the appropriate average rate of exchange for the year, and the adjustment to year\u2011end rates is taken directly to reserves. The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated at foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on retranslation are recognised directly as a separate component of equity. Since 1 January 2004, the Group\u2019s date of transition to IFRS, such differences have been recognised in the translation reserve. When a foreign operation is disposed of, either in part or in full, the relevant amount in the translation reserve is transferred to profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-395": { "value": "E. Financial instruments and fair value hedging Financial instruments are initially recorded at fair value plus directly attributable transaction costs unless the instrument is a derivative not designated as a hedge (see below). Subsequent measurement depends on the designation of the instrument, which follows the categories in IFRS 9: \u2013 short\u2011term borrowings and overdrafts are classified as financial liabilities at amortised cost; \u2013 derivatives, comprising interest rate swaps, foreign exchange contracts and options, metals futures contracts and any embedded derivatives, are classified as \u2018fair value through profit or loss\u2019 under IFRS 9, unless designated as hedges. Derivatives not designated as hedges are initially recognised at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, changes in fair value of such derivatives and gains or losses on their settlement are recognised in net financial income or expense; \u2013 long\u2011term loans and other interest bearing borrowings are generally held at amortised cost using the effective interest rate method. Where the long\u2011term loan is hedged, generally by an interest rate swap, and the hedge is regarded as effective, the carrying value of the long\u2011term loan is adjusted for changes in fair value of the hedge; \u2013 trade receivables are stated at cost as reduced by appropriate impairment allowances for expected irrecoverable amounts; \u2013 trade payables are stated at cost; \u2013 financial assets and liabilities are recognised on the balance sheet only when the Group becomes a party to the contractual provisions of the instrument; and \u2013 fair value through other comprehensive income (FVTOCI) financial instruments are carried at fair value with gains and losses being recognised in equity, and represent investments. i. Derecognition of financial instruments The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all of the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset measured at amortised cost, the difference between the asset\u2019s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings. The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. When the Group exchanges with the existing lender one debt instrument into another one, with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses. ii. Derecognition of hedging arrangements The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified immediately to profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-411": { "value": "i. Derecognition of financial instruments The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all of the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset measured at amortised cost, the difference between the asset\u2019s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings. The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. When the Group exchanges with the existing lender one debt instrument into another one, with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses. ii. Derecognition of hedging arrangements The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified immediately to profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-396": { "value": "F. Other hedging i. Hedge of monetary assets and liabilities, financial commitments or forecast transactions Where a derivative financial instrument is used as an economic hedge of the foreign exchange or metals commodity price exposure of a recognised monetary asset or liability, financial commitment or forecast transaction, but does not meet the criteria to qualify for hedge accounting under IFRS 9, no hedge accounting is applied and any gain or loss resulting from changes in fair value of the hedging instrument is recognised in net financial income or expense. Where such a derivative is a formally designated hedge of a forecast transaction for accounting purposes, movements in the value of the derivative are recognised directly in other comprehensive income to the extent the hedge is effective. The Group assesses the effectiveness of the hedge based on the expected fair value of the amount to be received and the movement in the fair value of the derivative designated as the hedge. For segmental reporting purposes, changes in the fair value of economic hedges that are not designated hedges, which relate to current year trading, together with the gains and losses on their settlement, are allocated to the operating profit of the relevant business segment. ii. Hedge of net investment in foreign operations Where a foreign currency liability or derivative financial instrument is a formally designated hedge of a net investment in a foreign operation, foreign exchange differences arising on translation of the foreign currency liability or changes in the fair value of the financial instrument are recognised directly in equity via other comprehensive income, to the extent the hedge is effective. The Group assesses the effectiveness of its net investment hedges based on fair value changes of its net assets, including relevant goodwill designated as foreign currency assets, and the fair value changes of both the debt designated as a hedge and the relevant financial instrument. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-397": { "value": "G. Investments not held for trading Investments that are designated as being not held for trading are initially recognised at fair value. Subsequently, the fair value of the investment is reassessed at each balance sheet date, with movements in the fair value recognised in other comprehensive income. In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial recognition to measure at fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-398": { "value": "H. Discontinued operations When the Group has assets and liabilities that have been sold in the year or are likely to be sold rather than being held for continuing use, these assets and liabilities are included in current assets and liabilities and denoted \u2018held for sale\u2019 rather than in their usual categories. They are recognised at the lower of carrying amount and fair value less costs to sell. Impairment losses on the initial classification of assets held for sale are included in the income statement, even for assets measured at fair value, as are impairment losses on subsequent remeasurement and any reversal thereof. Once classified as held for sale, assets are no longer depreciated or amortised. If they represent a significant enough proportion of the Group, they are also treated as discontinued operations. A discontinued operation is a component of the Group\u2019s business that represents a separate major line of business that has been disposed of, is held for sale or is a subsidiary acquired exclusively with a view to resale. This means that their trading performance, i.e., their revenues, costs and other items of income and expense, are no longer reported within the headline figures in the income statement and are instead reported in a separate line, net of tax, called \u2018discontinued operations\u2019. These amounts no longer form part of continuing earnings per share. Comparative figures are re\u2011presented to be shown on the same basis. This enables the income statement for the current and prior year to be presented on a consistent basis and to convey a more forward\u2011looking version of the results for the year. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-316": { "value": "3. Alternative Performance Measures (APMs) and adjusting items Accounting policy The Group\u2019s policy is to exclude items from underlying performance that are considered to be significant in nature (i.e., outside of the normal course of business) and/or quantum and where treatment as an adjusting item provides stakeholders with additional useful information to assess period\u2011on\u2011period trading performance of the Group. The Group believes that APMs, which are not considered to be a substitute for, or superior to, IFRS measures, provide stakeholders with additional helpful information on the performance of the business. These APMs are consistent with how the business performance is planned and reported within the internal management reporting to the Board and Executive Committee. Some of these measures are also used for the purpose of setting remuneration targets and for banking covenants. The adjusting items in the income statement and the reasons these are considered to be adjusting items are detailed below: \u2013 Costs associated with major restructuring projects \u2013 these costs are reported as adjusting items on the basis that they are significant in quantum, relate to specific, approved strategic initiatives following reviews of our organisation structure during the period and to provide stakeholders with comparability of underlying results from one period to the next, including dual running costs. Restructuring costs that are not considered to be major or one\u2011off are included within underlying results in the Consolidated Income Statement \u2013 Impairment losses \u2013 impairment losses treated as adjusting items include those which are large in quantum or one\u2011off in nature and, as a result, are not considered to be usual operating costs of the Group. In addition to this, impairment losses associated with major restructuring projects are considered to be part of the overall project and therefore follow the same treatment as restructuring projects, as described above. Impairment losses incurred, which are not significant or do not form part of a major restructuring project are recorded as adjusted items. All impairment losses recorded as adjusting items in the current and prior period relate to restructuring projects treated as adjusting items \u2013 Gains and losses on property disposals \u2013 significant quantum gains and losses on property disposals are not considered to relate to the underlying trading of the business and are therefore treated as adjusting items. All gains and losses on property disposals associated with major restructuring projects are considered to be part of the overall project and therefore follow the same treatment as restructuring projects, as described above \u2013 Acquired intangible amortisation \u2013 the amortisation charge is not considered to be related to the underlying performance of the Group and can fluctuate materially period\u2011on\u2011period as new businesses are acquired. All acquired intangible amortisation is treated as an adjusting item due to its nature. The trading results of acquired businesses are included in the adjusted results \u2013 Gains and losses on disposal of subsidiaries \u2013 due to their one\u2011off nature and large quantum, gains and losses on disposals are treated as adjusting items. If these gains or losses are not considered to be one\u2011off or material, these amounts would be included within underlying results. This also includes the impact of the exit from Russia \u2013 the loss on disposal of the Group\u2019s Russian subsidiary and impairment of assets related to Russian contracts \u2013 The reversal of gains and losses on economic hedges \u2013 gains and losses on economic hedges are treated as an adjusting item on a qualitative basis. The adjusting item reverses the treatment taken locally by the Group\u2019s businesses, where the impact of foreign currency forwards and commodity hedges are booked at the hedged rate in the adjusted results of the local businesses. In compliance with IFRS 9 \u2018Financial Instruments\u2019, these do not meet the requirement of an effective hedge and are therefore adjusted to be booked at the spot rate. The recognition of the gain and losses on the hedged items is recorded as a financing item, including any unrealised gains and losses \u2013 Other acquisition costs \u2013 for an acquired business, the acquisition costs which are primarily advisor and legal fees and the one\u2011off write\u2011off of the inventory uplift to fair value do not reflect trading performance and so are treated as adjusting items to ensure consistency between periods \u2013 Special pension events \u2013 due to their one\u2011off nature and typically large quantum, special pension events are treated as adjusting items. Special pension events which are not significant are recorded as adjusting items. There are no special pension events recorded as adjusting items in the current or prior period \u2013 Tax effect on adjusting items above \u2013 any tax effect of the above items is treated as an adjusting item \u2013 Other tax items \u2013 an assessment is made, on a case\u2011by\u2011case basis, for one\u2011off tax items which significantly impact the Group\u2019s results to determine whether the item should be treated as an adjusting item The policies outlined above are consistent with the policies adopted in the previous period. Movements in revenue and adjusted operating profit are given on an organic basis (see definition below) so that performance is not distorted by acquisitions, disposals and movements in exchange rates. The directors\u2019 commentary discusses these APMs to remove the effects of items of both income and expense that are considered different in nature from the underlying trading and normal quantum and where treatment as an adjusting item provides stakeholders with additional information to assess period\u2011on\u2011period trading. Critical judgement Management have applied judgement in the identification of the APMs used in the Annual Report. The APMs presented are used in discussions with the investment analyst community and by the Board and management to monitor the trading performance of the Group. The table below details the definition of each APM and a reference to where it can be reconciled to the equivalent statutory measure.
Reconciliation to
APM
Definition
statutory measure
Adjusted profit before tax
Adjusted profit before tax is statutory profit before tax before adjusting items
 See income statement
as shown on the income statement. on page 183.
Adjusted net interest cost
Adjusted net interest cost is statutory net interest costs before adjusting items
 See income statement
as shown on the income statement. on page 183.
Adjusted earnings per share
Adjusted earnings per share is defined within the table in Note 7.
 See Note 7.
Adjusted effective tax rate
The adjusted effective tax rate is the tax impact on adjusted profit before tax
 See Note 9.
divided by adjusted profit before tax.
Adjusted EBITDA
This measure reflects adjusted profit after tax before interest, tax,
 See Note 19.
depreciation, amortisation and impairment.
Adjusted operating profit
Adjusted operating profit is statutory operating profit before adjusting items
 See income statement
as shown on the income statement. on page 183 and
Adjusted operating margin
Adjusted operating margin is adjusted operating profit divided by revenue.
segmental reporting
Adjusted net financing costs
Adjusted net financing costs is interest received and interest paid including
in Note 4.
the impact on interest costs on leases before gains on instruments measured
at fair value through profit or loss (other economic hedges) and net financial
income relating to defined benefit pension schemes.
Organic revenue growth These two measures remove the impact of adjusting items, acquisitions,
Organic adjusted disposals and movements in exchange rates and are reconciled in Note 4.
operating profit
Adjusted operating cash flow
This measure reflects cash generated from operations as shown in the
 See Note 19.
statement of cash flows less cash spent acquiring property, plant and
equipment, non\u2011acquired intangible assets and investments; plus cash
received from the sale of property, plant and equipment, the sale of
investments less the repayment of principal amounts of lease payments
excluding the cash impact of adjusting items.
Net debt
Net debt is defined as the cash and cash equivalents, overdrafts,
 See Note 19.
interest\u2011bearing loans and borrowings and lease liabilities.
Net debt: adjusted EBITDA
Net debt divided by adjusted EBITDA as defined above.
Free cash flow before This measure is a sub\u2011total in the reconciliation of adjusted EBITDA to net See Note 19.
corporate activity debt and is presented to assist the reader to understand the nature of the
current year\u2019s cash flows excluding dividends, share buybacks and the
purchase and issuance of own shares.
Return on invested capital This measure takes adjusted operating profit after tax divided by average
(ROIC) capital invested. Capital invested is defined as net assets adjusted to remove
net debt, derivative assets and liabilities, defined benefit pension position
(net\ue01fof deferred tax) and to reverse historical impairments of goodwill and
amortisation of acquired intangible assets.
Cash conversion
Cash conversion is the adjusted operating cash flow as a percentage of the
adjusted operating profit.
Outlined below are the adjusting items impacting the current and prior year results.
2023 2022
Key \u00a3m \u00a3m
Recognised in arriving at operating profit
Reversal of net economic hedge contract (gains)/losses
(a)
(8.3)
3.0
Restructuring costs
(b)
(48.1)
(25.9)
Acquired intangible amortisation and other acquisition costs
(c)
(33.6)
(33.7)
Exit from Russia
(d)
(2.0)
(9.0)
(92.0)
(65.6)
Recognised in net financial expense
Gains on instruments measured at fair value through profit or loss
(a)
7.0
4.9
Recognised in taxation
Tax impact of adjusting items above
(e)
19.4
14.6
(a) Reversal of net economic hedge contract gains/losses \u2013 for segmental reporting purposes, changes in the fair value of economic
hedges that are not designated as hedges for accounting purposes, together with the gains and losses on their settlement, are
included in the revenues and adjusted operating profit of the relevant business segment. The adjusting items at the operating costs
level reverse this treatment. The financing adjusting items reflect the change in value or settlement of these contracts with the
financial institutions with which they were transacted.
(b) Restructuring costs \u2013 restructuring costs of \u00a348.1m were recognised in 2023. The Automation platform incurred costs of \u00a330.6m
related to the rationalisation of three facilities. The Life Technology platform incurred costs of \u00a317.5m related to the Customer First
reorganisation project, which transforms the structure into customer\u2011led sectors (across a number of businesses), and the
rationalisation of three facilities. The benefits of the restructuring programme are included in adjusted operating profit. These
ongoing significant restructuring projects are due to be completed in 2024.
Restructuring costs of \u00a325.9m were recognised in 2022. These primarily related to Automation and were for the Customer First
project, across a number of businesses and the rationalisation of four facilities.
(c) Acquired intangible amortisation and other acquisition costs \u2013 the acquired intangible amortisation charge was \u00a332.0m
(2022: \u00a329.5m), which largely relates to the amortisation of the intangible assets recognised on the acquisition of Adaptas Solutions,
Heatmiser UK Ltd and Bimba Manufacturing Company. Other acquisition costs of \u00a31.6m for the year ended 31 December 2023 are
related to the unwind of the inventory fair value uplift adjustment for Heatmiser. Other acquisition costs of \u00a34.2m for the year ended
31 December 2022 primarily related to professional fees associated with the acquisition of Heatmiser and Bahr and the unwind of
the inventory fair value uplift adjustment for Adaptas.
(d) Exit from Russia \u2013 During 2023, changes were made to the legal structure of a customer, which resulted in a \u00a32m write\u2011off. In
2022, the Group\u2019s decision to end all new business in Russia resulted in a charge of \u00a39.0m. The Group recorded a loss on disposal
of its Russian subsidiary of \u00a34.8m. In addition, the exit resulted in a \u00a34.2m impairment of assets related to Russian contracts.
(e) Taxation \u2013 the tax effect of the above items has been recognised as an adjusting item and amounts to \u00a319.4m (2022: \u00a314.6m).
", "dimensions": { "concept": "imiplc:DisclosureOfAlternativePerformanceMeasures", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-417": { "value": "Accounting policy The Group\u2019s policy is to exclude items from underlying performance that are considered to be significant in nature (i.e., outside of the normal course of business) and/or quantum and where treatment as an adjusting item provides stakeholders with additional useful information to assess period\u2011on\u2011period trading performance of the Group. The Group believes that APMs, which are not considered to be a substitute for, or superior to, IFRS measures, provide stakeholders with additional helpful information on the performance of the business. These APMs are consistent with how the business performance is planned and reported within the internal management reporting to the Board and Executive Committee. Some of these measures are also used for the purpose of setting remuneration targets and for banking covenants. The adjusting items in the income statement and the reasons these are considered to be adjusting items are detailed below: \u2013 Costs associated with major restructuring projects \u2013 these costs are reported as adjusting items on the basis that they are significant in quantum, relate to specific, approved strategic initiatives following reviews of our organisation structure during the period and to provide stakeholders with comparability of underlying results from one period to the next, including dual running costs. Restructuring costs that are not considered to be major or one\u2011off are included within underlying results in the Consolidated Income Statement \u2013 Impairment losses \u2013 impairment losses treated as adjusting items include those which are large in quantum or one\u2011off in nature and, as a result, are not considered to be usual operating costs of the Group. In addition to this, impairment losses associated with major restructuring projects are considered to be part of the overall project and therefore follow the same treatment as restructuring projects, as described above. Impairment losses incurred, which are not significant or do not form part of a major restructuring project are recorded as adjusted items. All impairment losses recorded as adjusting items in the current and prior period relate to restructuring projects treated as adjusting items \u2013 Gains and losses on property disposals \u2013 significant quantum gains and losses on property disposals are not considered to relate to the underlying trading of the business and are therefore treated as adjusting items. All gains and losses on property disposals associated with major restructuring projects are considered to be part of the overall project and therefore follow the same treatment as restructuring projects, as described above \u2013 Acquired intangible amortisation \u2013 the amortisation charge is not considered to be related to the underlying performance of the Group and can fluctuate materially period\u2011on\u2011period as new businesses are acquired. All acquired intangible amortisation is treated as an adjusting item due to its nature. The trading results of acquired businesses are included in the adjusted results \u2013 Gains and losses on disposal of subsidiaries \u2013 due to their one\u2011off nature and large quantum, gains and losses on disposals are treated as adjusting items. If these gains or losses are not considered to be one\u2011off or material, these amounts would be included within underlying results. This also includes the impact of the exit from Russia \u2013 the loss on disposal of the Group\u2019s Russian subsidiary and impairment of assets related to Russian contracts \u2013 The reversal of gains and losses on economic hedges \u2013 gains and losses on economic hedges are treated as an adjusting item on a qualitative basis. The adjusting item reverses the treatment taken locally by the Group\u2019s businesses, where the impact of foreign currency forwards and commodity hedges are booked at the hedged rate in the adjusted results of the local businesses. In compliance with IFRS 9 \u2018Financial Instruments\u2019, these do not meet the requirement of an effective hedge and are therefore adjusted to be booked at the spot rate. The recognition of the gain and losses on the hedged items is recorded as a financing item, including any unrealised gains and losses \u2013 Other acquisition costs \u2013 for an acquired business, the acquisition costs which are primarily advisor and legal fees and the one\u2011off write\u2011off of the inventory uplift to fair value do not reflect trading performance and so are treated as adjusting items to ensure consistency between periods \u2013 Special pension events \u2013 due to their one\u2011off nature and typically large quantum, special pension events are treated as adjusting items. Special pension events which are not significant are recorded as adjusting items. There are no special pension events recorded as adjusting items in the current or prior period \u2013 Tax effect on adjusting items above \u2013 any tax effect of the above items is treated as an adjusting item \u2013 Other tax items \u2013 an assessment is made, on a case\u2011by\u2011case basis, for one\u2011off tax items which significantly impact the Group\u2019s results to determine whether the item should be treated as an adjusting item The policies outlined above are consistent with the policies adopted in the previous period. Movements in revenue and adjusted operating profit are given on an organic basis (see definition below) so that performance is not distorted by acquisitions, disposals and movements in exchange rates. The directors\u2019 commentary discusses these APMs to remove the effects of items of both income and expense that are considered different in nature from the underlying trading and normal quantum and where treatment as an adjusting item provides stakeholders with additional information to assess period\u2011on\u2011period trading. Critical judgement Management have applied judgement in the identification of the APMs used in the Annual Report. The APMs presented are used in discussions with the investment analyst community and by the Board and management to monitor the trading performance of the Group. ", "dimensions": { "concept": "imiplc:DescriptionOfAccountingPolicyForAlternativePerformanceMeasuresAndAdjustingItems", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-317": { "value": "
4. Segmental Information
Segmental information is presented in the consolidated financial statements for each of the Group\u2019s operating segments. The operating
segment reporting format reflects the Group\u2019s management and internal reporting structures and represents the information that was
presented to the chief operating decision\u2011maker, being the Executive Committee.
On 28 July 2023, the Group announced a structure change where the existing divisional structure, including IMI Critical Engineering,
IMI Precision Engineering and IMI Hydronic Engineering now reports under two platforms, Automation and Life Technology to better
align IMI to its key sectors and to help position IMI to accelerate growth.
Automation
The Automation business leverages deep automation technology and applications expertise to improve productivity, safety and
sustainability in the Process Automation and Industrial Automation sectors.
Life Technology
The Life Technology business focuses on technologies that enhance and improve everyday life, particularly in the areas of health,
sustainability and comfort across the Climate Control, Transport and Life Science & Fluid Control sectors.
Performance is measured by the Executive Committee, based on adjusted operating profit and organic revenue growth, which are
defined in Note 3. These two measures represent the two short\u2011term key performance indicators for the Group.
Businesses enter into forward currency and metal contracts to provide economic hedges against the impact on profitability of swings
in rates and values in accordance with the Group\u2019s policy to minimise the risk of volatility in revenues, costs and margins. Adjusted
operating profits are therefore charged/credited with the impact of these contracts. In accordance with IFRS 9, these contracts do not
meet the requirements for hedge accounting and gains and losses are reversed out of operating profit and are recorded in net financial
income and expense for the purposes of the Consolidated income statement.
The following table illustrates how the results for the segments reconcile to the overall results reported in the income statement.
2022 results have been restated to reflect the structure change described in Note 1.
The following table shows a reconciliation of platform adjusted operating profit to statutory operating profit. 2022 results have been
restated to reflect the structure change described in Note 1.
Life
Automation
Technology
Total
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Revenue
1,350
1,248
846
801
2,196
2,049
Adjusted operating profit
257.3
225.3
153.3
138.5
410.6
363.8
Adjusted operating profit margin (%)
19.1%
18.1%
18.1%
17.3%
18.7%
17.8%
Reconciliation to statutory operating profit:
Reversal of net economic hedge contract losses/(gains)
(7.5)
1.0
(0.8)
2.0
(8.3)
3.0
Restructuring costs
(30.6)
(15.9)
(17.5)
(10.0)
(48.1)
(25.9)
Acquired intangible amortisation and other acquisition items
(14.9)
(16.2)
(18.7)
(17.5)
(33.6)
(33.7)
Exit from Russia
(2.0)
(5.9)
\u2013
(3.1)
(2.0)
(9.0)
Statutory operating profit
202.3
188.3
116.3
109.9
318.6
298.2
Statutory operating margin (%)
15.0%
15.1%
13.7%
13.7%
14.5%
14.6%
Net financial expense
(16.2)
(12.8)
Statutory profit before tax
302.4
285.4
The following table illustrates how revenue and adjusted operating profit have been impacted by movements in foreign exchange,
acquisitions and disposals compared to 2022. 2022 results have been restated to reflect the structure change described in Note 1.
Year ended 31 December 2022 (Restated)
Year ended 31 December 2023
Adjusted Organic
As As growth growth
Revenue
adjusted
Disposal
Exchange
Organic
adjusted
Acquisitions
Organic
(%) (%)
Automation
1,248
(6)
(1)
1,241
1,350
(6)
1,344
8%
8%
Life Technology
801
(3)
4
802
846
(26)
820
6%
2%
Total
2,049
(9)
3
2,043
2,196
(32)
2,164
7%
6%
Adjusted operating profit
Automation
225.3
(0.6)
(0.6)
224.1
257.3
(1.1)
256.2
14%
14%
Life Technology
138.5
\u2013
1.8
140.3
153.3
(8.4)
144.9
11%
3%
Total
363.8
(0.6)
1.2
364.4
410.6
(9.5)
401.1
13%
10%
Adjusted operating profit margin (%)
17.8%
17.8%
18.7%
18.5%
The following table illustrates how the segmental assets and liabilities reconcile to the overall total assets and liabilities reported in the
balance sheet. 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions and the structure
change, both of which are described in Note 1.
Assets
Liabilities
2022 2022
2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m
Automation
1,393.0
1,362.2
444.1
389.5
Life Technology
921.8
955.5
155.6
171.8
Total segmental assets/liabilities (including lease liabilities)
2,314.8
2,317.7
599.7
561.3
Corporate items
18.5
22.5
38.7
46.6
Employee benefits
1.7
28.5
50.6
47.4
Investments
1.7
2.0
\u2013
\u2013
Net debt items (excluding lease liabilities)
106.5
133.0
644.9
839.3
Net taxation
27.2
26.1
106.3
129.6
Total assets and liabilities in Group balance sheet
2,470.4
2,529.8
1,440.2
1,624.2
The following table includes other information to show how certain costs are allocated between the platforms of the Group.
2022 results have been restated to reflect the structure change described in Note 1.
Adjusting restructuring
costs
Capital expenditure
Amortisation
*
Depreciation
2022 2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Automation
30.6
15.9
51.3
40.7
24.7
23.6
46.2
43.6
Life Technology
17.5
10.0
28.6
30.6
24.9
24.4
28.6
30.6
Total
48.1
25.9
79.9
71.3
49.6
48.0
74.8
74.2
**
* The amortisation figures above include the amortisation of acquired intangibles. \u00a314.9m (2022: \u00a315.3m restated) is included in respect of Automation and \u00a317.1m (2022: \u00a314.2m
restated) is included in respect of Life Technology.
** The depreciation figures above include the impact of IFRS 16 \u2018Leases\u2019: \u00a317.1m in respect of Automation (2022: \u00a318.8m restated) and \u00a312.3m in respect of Life Technology
(2022: \u00a313.6m restated).
The following table shows a geographical analysis of how the Group\u2019s revenue is derived by destination:
2023 2022
\u00a3m \u00a3m
UK
117
93
Germany
280
265
Rest of Europe
557
520
Total Europe
954
878
USA
525
536
Rest of Americas
140
91
Total Americas
665
627
China
174
179
Rest of Asia Pacific
296
271
Total Asia Pacific
470
450
Middle East and Africa
107
94
Total revenue
2,196
2,049
Revenue by geography (2023)
A
B
C
D
A
Europe 43%
B
Americas 30%
C
Asia Pacific 22%
D
Middle East and Africa 5%
Revenue by geography (2022)
A
B
C
D
A
Europe 43%
B
Americas 30%
C
Asia Pacific 22%
D
Middle East and Africa 5%
The following table shows a geographical analysis of the location of the Group\u2019s intangible assets, property, plant and equipment
and right\u2011of\u2011use assets. 2022 results have been restated to include the impact of Heatmiser and CorSolutions acquisitions, as discussed
in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
UK
196.6
192.3
Germany
298.2
306.8
Rest of Europe
312.9
307.4
USA
468.5
519.0
Asia Pacific
49.1
64.5
Rest of World
32.4
30.3
Total
1,357.7
1,420.3
The Group\u2019s revenue streams are disaggregated in the table below. The 2022 results have been restated as a result of the changes
to the Group\u2019s structure, which now reports under two platforms, Automation and Life Technology, as discussed in Note 1.
2022
2023 Revenue
Revenue (Restated)
\u00a3m \u00a3m
Industrial Automation
543
535
Aftermarket
483
411
New Construction
324
302
Process Automation
807
713
Automation
1,350
1,248
Climate Control
386
350
Life Science & Fluid Control
276
289
Transport
184
162
Life Technology
846
801
Total revenue
2,196
2,049
Sale of goods
2,115
1,977
Sale of services
81
72
Total revenue
2,196
2,049
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-369": { "value": "4. Segmental Information Segmental information is presented in the consolidated financial statements for each of the Group\u2019s operating segments. The operating segment reporting format reflects the Group\u2019s management and internal reporting structures and represents the information that was presented to the chief operating decision\u2011maker, being the Executive Committee. On 28 July 2023, the Group announced a structure change where the existing divisional structure, including IMI Critical Engineering, IMI Precision Engineering and IMI Hydronic Engineering now reports under two platforms, Automation and Life Technology to better align IMI to its key sectors and to help position IMI to accelerate growth. Automation The Automation business leverages deep automation technology and applications expertise to improve productivity, safety and sustainability in the Process Automation and Industrial Automation sectors. Life Technology The Life Technology business focuses on technologies that enhance and improve everyday life, particularly in the areas of health, sustainability and comfort across the Climate Control, Transport and Life Science & Fluid Control sectors. Performance is measured by the Executive Committee, based on adjusted operating profit and organic revenue growth, which are defined in Note 3. These two measures represent the two short\u2011term key performance indicators for the Group. Businesses enter into forward currency and metal contracts to provide economic hedges against the impact on profitability of swings in rates and values in accordance with the Group\u2019s policy to minimise the risk of volatility in revenues, costs and margins. Adjusted operating profits are therefore charged/credited with the impact of these contracts. In accordance with IFRS 9, these contracts do not meet the requirements for hedge accounting and gains and losses are reversed out of operating profit and are recorded in net financial income and expense for the purposes of the Consolidated income statement. The following table illustrates how the results for the segments reconcile to the overall results reported in the income statement. 2022 results have been restated to reflect the structure change described in Note 1. The following table shows a reconciliation of platform adjusted operating profit to statutory operating profit. 2022 results have been restated to reflect the structure change described in Note 1.
Life
Automation
Technology
Total
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Revenue
1,350
1,248
846
801
2,196
2,049
Adjusted operating profit
257.3
225.3
153.3
138.5
410.6
363.8
Adjusted operating profit margin (%)
19.1%
18.1%
18.1%
17.3%
18.7%
17.8%
Reconciliation to statutory operating profit:
Reversal of net economic hedge contract losses/(gains)
(7.5)
1.0
(0.8)
2.0
(8.3)
3.0
Restructuring costs
(30.6)
(15.9)
(17.5)
(10.0)
(48.1)
(25.9)
Acquired intangible amortisation and other acquisition items
(14.9)
(16.2)
(18.7)
(17.5)
(33.6)
(33.7)
Exit from Russia
(2.0)
(5.9)
\u2013
(3.1)
(2.0)
(9.0)
Statutory operating profit
202.3
188.3
116.3
109.9
318.6
298.2
Statutory operating margin (%)
15.0%
15.1%
13.7%
13.7%
14.5%
14.6%
Net financial expense
(16.2)
(12.8)
Statutory profit before tax
302.4
285.4
The following table illustrates how revenue and adjusted operating profit have been impacted by movements in foreign exchange, acquisitions and disposals compared to 2022. 2022 results have been restated to reflect the structure change described in Note 1.
Year ended 31 December 2022 (Restated)
Year ended 31 December 2023
Adjusted Organic
As As growth growth
Revenue
adjusted
Disposal
Exchange
Organic
adjusted
Acquisitions
Organic
(%) (%)
Automation
1,248
(6)
(1)
1,241
1,350
(6)
1,344
8%
8%
Life Technology
801
(3)
4
802
846
(26)
820
6%
2%
Total
2,049
(9)
3
2,043
2,196
(32)
2,164
7%
6%
Adjusted operating profit
Automation
225.3
(0.6)
(0.6)
224.1
257.3
(1.1)
256.2
14%
14%
Life Technology
138.5
\u2013
1.8
140.3
153.3
(8.4)
144.9
11%
3%
Total
363.8
(0.6)
1.2
364.4
410.6
(9.5)
401.1
13%
10%
Adjusted operating profit margin (%)
17.8%
17.8%
18.7%
18.5%
The following table illustrates how the segmental assets and liabilities reconcile to the overall total assets and liabilities reported in the balance sheet. 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions and the structure change, both of which are described in Note 1.
Assets
Liabilities
2022 2022
2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m
Automation
1,393.0
1,362.2
444.1
389.5
Life Technology
921.8
955.5
155.6
171.8
Total segmental assets/liabilities (including lease liabilities)
2,314.8
2,317.7
599.7
561.3
Corporate items
18.5
22.5
38.7
46.6
Employee benefits
1.7
28.5
50.6
47.4
Investments
1.7
2.0
\u2013
\u2013
Net debt items (excluding lease liabilities)
106.5
133.0
644.9
839.3
Net taxation
27.2
26.1
106.3
129.6
Total assets and liabilities in Group balance sheet
2,470.4
2,529.8
1,440.2
1,624.2
The following table includes other information to show how certain costs are allocated between the platforms of the Group. 2022 results have been restated to reflect the structure change described in Note 1.
Adjusting restructuring
costs
Capital expenditure
Amortisation
*
Depreciation
2022 2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Automation
30.6
15.9
51.3
40.7
24.7
23.6
46.2
43.6
Life Technology
17.5
10.0
28.6
30.6
24.9
24.4
28.6
30.6
Total
48.1
25.9
79.9
71.3
49.6
48.0
74.8
74.2
** * The amortisation figures above include the amortisation of acquired intangibles. \u00a314.9m (2022: \u00a315.3m restated) is included in respect of Automation and \u00a317.1m (2022: \u00a314.2m restated) is included in respect of Life Technology. ** The depreciation figures above include the impact of IFRS 16 \u2018Leases\u2019: \u00a317.1m in respect of Automation (2022: \u00a318.8m restated) and \u00a312.3m in respect of Life Technology (2022: \u00a313.6m restated). The following table shows a geographical analysis of how the Group\u2019s revenue is derived by destination:
2023 2022
\u00a3m \u00a3m
UK
117
93
Germany
280
265
Rest of Europe
557
520
Total Europe
954
878
USA
525
536
Rest of Americas
140
91
Total Americas
665
627
China
174
179
Rest of Asia Pacific
296
271
Total Asia Pacific
470
450
Middle East and Africa
107
94
Total revenue
2,196
2,049
Revenue by geography (2023) A B C D A Europe 43% B Americas 30% C Asia Pacific 22% D Middle East and Africa 5% Revenue by geography (2022) A B C D A Europe 43% B Americas 30% C Asia Pacific 22% D Middle East and Africa 5% The following table shows a geographical analysis of the location of the Group\u2019s intangible assets, property, plant and equipment and right\u2011of\u2011use assets. 2022 results have been restated to include the impact of Heatmiser and CorSolutions acquisitions, as discussed in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
UK
196.6
192.3
Germany
298.2
306.8
Rest of Europe
312.9
307.4
USA
468.5
519.0
Asia Pacific
49.1
64.5
Rest of World
32.4
30.3
Total
1,357.7
1,420.3
The Group\u2019s revenue streams are disaggregated in the table below. The 2022 results have been restated as a result of the changes to the Group\u2019s structure, which now reports under two platforms, Automation and Life Technology, as discussed in Note 1.
2022
2023 Revenue
Revenue (Restated)
\u00a3m \u00a3m
Industrial Automation
543
535
Aftermarket
483
411
New Construction
324
302
Process Automation
807
713
Automation
1,350
1,248
Climate Control
386
350
Life Science & Fluid Control
276
289
Transport
184
162
Life Technology
846
801
Total revenue
2,196
2,049
Sale of goods
2,115
1,977
Sale of services
81
72
Total revenue
2,196
2,049
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-345": { "value": "4. Segmental Information Segmental information is presented in the consolidated financial statements for each of the Group\u2019s operating segments. The operating segment reporting format reflects the Group\u2019s management and internal reporting structures and represents the information that was presented to the chief operating decision\u2011maker, being the Executive Committee. On 28 July 2023, the Group announced a structure change where the existing divisional structure, including IMI Critical Engineering, IMI Precision Engineering and IMI Hydronic Engineering now reports under two platforms, Automation and Life Technology to better align IMI to its key sectors and to help position IMI to accelerate growth. Automation The Automation business leverages deep automation technology and applications expertise to improve productivity, safety and sustainability in the Process Automation and Industrial Automation sectors. Life Technology The Life Technology business focuses on technologies that enhance and improve everyday life, particularly in the areas of health, sustainability and comfort across the Climate Control, Transport and Life Science & Fluid Control sectors. Performance is measured by the Executive Committee, based on adjusted operating profit and organic revenue growth, which are defined in Note 3. These two measures represent the two short\u2011term key performance indicators for the Group. Businesses enter into forward currency and metal contracts to provide economic hedges against the impact on profitability of swings in rates and values in accordance with the Group\u2019s policy to minimise the risk of volatility in revenues, costs and margins. Adjusted operating profits are therefore charged/credited with the impact of these contracts. In accordance with IFRS 9, these contracts do not meet the requirements for hedge accounting and gains and losses are reversed out of operating profit and are recorded in net financial income and expense for the purposes of the Consolidated income statement. The following table illustrates how the results for the segments reconcile to the overall results reported in the income statement. 2022 results have been restated to reflect the structure change described in Note 1. The following table shows a reconciliation of platform adjusted operating profit to statutory operating profit. 2022 results have been restated to reflect the structure change described in Note 1.
Life
Automation
Technology
Total
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Revenue
1,350
1,248
846
801
2,196
2,049
Adjusted operating profit
257.3
225.3
153.3
138.5
410.6
363.8
Adjusted operating profit margin (%)
19.1%
18.1%
18.1%
17.3%
18.7%
17.8%
Reconciliation to statutory operating profit:
Reversal of net economic hedge contract losses/(gains)
(7.5)
1.0
(0.8)
2.0
(8.3)
3.0
Restructuring costs
(30.6)
(15.9)
(17.5)
(10.0)
(48.1)
(25.9)
Acquired intangible amortisation and other acquisition items
(14.9)
(16.2)
(18.7)
(17.5)
(33.6)
(33.7)
Exit from Russia
(2.0)
(5.9)
\u2013
(3.1)
(2.0)
(9.0)
Statutory operating profit
202.3
188.3
116.3
109.9
318.6
298.2
Statutory operating margin (%)
15.0%
15.1%
13.7%
13.7%
14.5%
14.6%
Net financial expense
(16.2)
(12.8)
Statutory profit before tax
302.4
285.4
The following table illustrates how revenue and adjusted operating profit have been impacted by movements in foreign exchange, acquisitions and disposals compared to 2022. 2022 results have been restated to reflect the structure change described in Note 1.
Year ended 31 December 2022 (Restated)
Year ended 31 December 2023
Adjusted Organic
As As growth growth
Revenue
adjusted
Disposal
Exchange
Organic
adjusted
Acquisitions
Organic
(%) (%)
Automation
1,248
(6)
(1)
1,241
1,350
(6)
1,344
8%
8%
Life Technology
801
(3)
4
802
846
(26)
820
6%
2%
Total
2,049
(9)
3
2,043
2,196
(32)
2,164
7%
6%
Adjusted operating profit
Automation
225.3
(0.6)
(0.6)
224.1
257.3
(1.1)
256.2
14%
14%
Life Technology
138.5
\u2013
1.8
140.3
153.3
(8.4)
144.9
11%
3%
Total
363.8
(0.6)
1.2
364.4
410.6
(9.5)
401.1
13%
10%
Adjusted operating profit margin (%)
17.8%
17.8%
18.7%
18.5%
The following table illustrates how the segmental assets and liabilities reconcile to the overall total assets and liabilities reported in the balance sheet. 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions and the structure change, both of which are described in Note 1.
Assets
Liabilities
2022 2022
2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m
Automation
1,393.0
1,362.2
444.1
389.5
Life Technology
921.8
955.5
155.6
171.8
Total segmental assets/liabilities (including lease liabilities)
2,314.8
2,317.7
599.7
561.3
Corporate items
18.5
22.5
38.7
46.6
Employee benefits
1.7
28.5
50.6
47.4
Investments
1.7
2.0
\u2013
\u2013
Net debt items (excluding lease liabilities)
106.5
133.0
644.9
839.3
Net taxation
27.2
26.1
106.3
129.6
Total assets and liabilities in Group balance sheet
2,470.4
2,529.8
1,440.2
1,624.2
The following table includes other information to show how certain costs are allocated between the platforms of the Group. 2022 results have been restated to reflect the structure change described in Note 1.
Adjusting restructuring
costs
Capital expenditure
Amortisation
*
Depreciation
2022 2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Automation
30.6
15.9
51.3
40.7
24.7
23.6
46.2
43.6
Life Technology
17.5
10.0
28.6
30.6
24.9
24.4
28.6
30.6
Total
48.1
25.9
79.9
71.3
49.6
48.0
74.8
74.2
** * The amortisation figures above include the amortisation of acquired intangibles. \u00a314.9m (2022: \u00a315.3m restated) is included in respect of Automation and \u00a317.1m (2022: \u00a314.2m restated) is included in respect of Life Technology. ** The depreciation figures above include the impact of IFRS 16 \u2018Leases\u2019: \u00a317.1m in respect of Automation (2022: \u00a318.8m restated) and \u00a312.3m in respect of Life Technology (2022: \u00a313.6m restated). The following table shows a geographical analysis of how the Group\u2019s revenue is derived by destination:
2023 2022
\u00a3m \u00a3m
UK
117
93
Germany
280
265
Rest of Europe
557
520
Total Europe
954
878
USA
525
536
Rest of Americas
140
91
Total Americas
665
627
China
174
179
Rest of Asia Pacific
296
271
Total Asia Pacific
470
450
Middle East and Africa
107
94
Total revenue
2,196
2,049
Revenue by geography (2023) A B C D A Europe 43% B Americas 30% C Asia Pacific 22% D Middle East and Africa 5% Revenue by geography (2022) A B C D A Europe 43% B Americas 30% C Asia Pacific 22% D Middle East and Africa 5% The following table shows a geographical analysis of the location of the Group\u2019s intangible assets, property, plant and equipment and right\u2011of\u2011use assets. 2022 results have been restated to include the impact of Heatmiser and CorSolutions acquisitions, as discussed in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
UK
196.6
192.3
Germany
298.2
306.8
Rest of Europe
312.9
307.4
USA
468.5
519.0
Asia Pacific
49.1
64.5
Rest of World
32.4
30.3
Total
1,357.7
1,420.3
The Group\u2019s revenue streams are disaggregated in the table below. The 2022 results have been restated as a result of the changes to the Group\u2019s structure, which now reports under two platforms, Automation and Life Technology, as discussed in Note 1.
2022
2023 Revenue
Revenue (Restated)
\u00a3m \u00a3m
Industrial Automation
543
535
Aftermarket
483
411
New Construction
324
302
Process Automation
807
713
Automation
1,350
1,248
Climate Control
386
350
Life Science & Fluid Control
276
289
Transport
184
162
Life Technology
846
801
Total revenue
2,196
2,049
Sale of goods
2,115
1,977
Sale of services
81
72
Total revenue
2,196
2,049
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-382": { "value": "The following table shows a geographical analysis of how the Group\u2019s revenue is derived by destination:
2023 2022
\u00a3m \u00a3m
UK
117
93
Germany
280
265
Rest of Europe
557
520
Total Europe
954
878
USA
525
536
Rest of Americas
140
91
Total Americas
665
627
China
174
179
Rest of Asia Pacific
296
271
Total Asia Pacific
470
450
Middle East and Africa
107
94
Total revenue
2,196
2,049
Revenue by geography (2023) A B C D A Europe 43% B Americas 30% C Asia Pacific 22% D Middle East and Africa 5% Revenue by geography (2022) A B C D A Europe 43% B Americas 30% C Asia Pacific 22% D Middle East and Africa 5% ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeographicalAreasExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-318": { "value": "
5. Net operating costs
Operating profit is stated after charging/(crediting):
2023 2022
Revenue Revenue
\u00a3m \u00a3m
Net foreign exchange gains included in operating profit
(4.6)
(3.2)
Research and development expense
73.6
70.3
Amortisation of intangible assets
49.6
48.0
Impairment of intangible assets treated as adjusting items
\u2013
0.2
Impairment of intangible assets
\u2013
0.5
Depreciation of owned property, plant and equipment
45.4
41.9
Impairment/(reversal of impairment) of owned property, plant and equipment and leased assets treated as
adjusting items
5.0
(2.3)
Impairment/(reversal of impairment) of owned property, plant and equipment
0.2
(0.6)
Depreciation of right\u2011of\u2011use assets
29.4
32.3
Cost of inventories recognised as an expense
1,183.7
1,112.1
Loss on disposal of property, plant and equipment
0.5
1.7
Operating costs by function
The following table shows how much of the operating costs disclosed in the income statement relate to selling and distribution costs
and administrative expenses:
2023 2022
\u00a3m \u00a3m
Selling and distribution costs
224.2
207.2
Administrative expenses
387.4
367.1
Total
611.6
574.3
Employee information
The average number of people employed by the Group during the year is shown in the table below. 2022 comparatives have been
restated to reflect the change to the business structure as described in Note 1.
2023
2022
(Restated)
Automation
6,542
7,102
Life Technology
4,410
3,947
Corporate
85
80
Total Group
11,037
11,129
The aggregate employment cost charged to operating profit for the year was:
2023 2022
\u00a3m \u00a3m
Wages and salaries
531.9
505.9
Share\u2011based payments
12.9
11.7
Social security costs
82.4
76.7
Pension costs
5.8
8.3
Total
633.0
602.6
The aggregate gains made by directors on the exercise of share options was \u00a33.7m (2022: \u00a32.6m). The remuneration, as defined in the
Companies Act 2006 Schedule 5, for the executive directors comprises fixed and annual variable pay as set out in the table on page 147 of
the Remuneration Report. For details of the non\u2011executive directors\u2019 remuneration please refer to page 159 of the Remuneration Report.
Research and development expenditure
The cost of research and development expenditure charged directly to the income statement was \u00a373.6m (2022: \u00a370.3m). Included
within this is amortisation of capitalised intangible development costs which amounted to \u00a37.3m (2022: \u00a38.2m) and across the Group
a further \u00a36.2m (2022: \u00a35.9m) was capitalised in the year.
Exchange on operating activities net of hedging arrangements
The transactional foreign exchange gains in the Group were \u00a34.6m (2022: gains of \u00a33.2m).
Audit fees
The Group engages its auditor, Deloitte, to perform other assurance assignments in addition to their statutory audit duties where their
expertise, experience and knowledge of the Group should enable them to perform these assignments more efficiently than other similar
service providers.
The Group\u2019s policy on such assignments is set out in the Audit Committee Report on page 130. Fees earned by Deloitte and its associates
during the year are set out below:
2023 2022
\u00a3m \u00a3m
Fees earned by the Company\u2019s auditor for the audit of the Company\u2019s Annual Accounts
0.2
0.2
The audit of the Company\u2019s subsidiaries pursuant to legislation
3.0
2.9
Other assurance services
0.1
0.1
Total
3.3
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-346": { "value": "5. Net operating costs Operating profit is stated after charging/(crediting):
2023 2022
Revenue Revenue
\u00a3m \u00a3m
Net foreign exchange gains included in operating profit
(4.6)
(3.2)
Research and development expense
73.6
70.3
Amortisation of intangible assets
49.6
48.0
Impairment of intangible assets treated as adjusting items
\u2013
0.2
Impairment of intangible assets
\u2013
0.5
Depreciation of owned property, plant and equipment
45.4
41.9
Impairment/(reversal of impairment) of owned property, plant and equipment and leased assets treated as
adjusting items
5.0
(2.3)
Impairment/(reversal of impairment) of owned property, plant and equipment
0.2
(0.6)
Depreciation of right\u2011of\u2011use assets
29.4
32.3
Cost of inventories recognised as an expense
1,183.7
1,112.1
Loss on disposal of property, plant and equipment
0.5
1.7
Operating costs by function The following table shows how much of the operating costs disclosed in the income statement relate to selling and distribution costs and administrative expenses:
2023 2022
\u00a3m \u00a3m
Selling and distribution costs
224.2
207.2
Administrative expenses
387.4
367.1
Total
611.6
574.3
Employee information The average number of people employed by the Group during the year is shown in the table below. 2022 comparatives have been restated to reflect the change to the business structure as described in Note 1.
2023
2022
(Restated)
Automation
6,542
7,102
Life Technology
4,410
3,947
Corporate
85
80
Total Group
11,037
11,129
The aggregate employment cost charged to operating profit for the year was:
2023 2022
\u00a3m \u00a3m
Wages and salaries
531.9
505.9
Share\u2011based payments
12.9
11.7
Social security costs
82.4
76.7
Pension costs
5.8
8.3
Total
633.0
602.6
The aggregate gains made by directors on the exercise of share options was \u00a33.7m (2022: \u00a32.6m). The remuneration, as defined in the Companies Act 2006 Schedule 5, for the executive directors comprises fixed and annual variable pay as set out in the table on page 147 of the Remuneration Report. For details of the non\u2011executive directors\u2019 remuneration please refer to page 159 of the Remuneration Report. Research and development expenditure The cost of research and development expenditure charged directly to the income statement was \u00a373.6m (2022: \u00a370.3m). Included within this is amortisation of capitalised intangible development costs which amounted to \u00a37.3m (2022: \u00a38.2m) and across the Group a further \u00a36.2m (2022: \u00a35.9m) was capitalised in the year. Exchange on operating activities net of hedging arrangements The transactional foreign exchange gains in the Group were \u00a34.6m (2022: gains of \u00a33.2m). Audit fees The Group engages its auditor, Deloitte, to perform other assurance assignments in addition to their statutory audit duties where their expertise, experience and knowledge of the Group should enable them to perform these assignments more efficiently than other similar service providers. The Group\u2019s policy on such assignments is set out in the Audit Committee Report on page 130. Fees earned by Deloitte and its associates during the year are set out below:
2023 2022
\u00a3m \u00a3m
Fees earned by the Company\u2019s auditor for the audit of the Company\u2019s Annual Accounts
0.2
0.2
The audit of the Company\u2019s subsidiaries pursuant to legislation
3.0
2.9
Other assurance services
0.1
0.1
Total
3.3
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-370": { "value": "
2023 2022
Revenue Revenue
\u00a3m \u00a3m
Net foreign exchange gains included in operating profit
(4.6)
(3.2)
Research and development expense
73.6
70.3
Amortisation of intangible assets
49.6
48.0
Impairment of intangible assets treated as adjusting items
\u2013
0.2
Impairment of intangible assets
\u2013
0.5
Depreciation of owned property, plant and equipment
45.4
41.9
Impairment/(reversal of impairment) of owned property, plant and equipment and leased assets treated as
adjusting items
5.0
(2.3)
Impairment/(reversal of impairment) of owned property, plant and equipment
0.2
(0.6)
Depreciation of right\u2011of\u2011use assets
29.4
32.3
Cost of inventories recognised as an expense
1,183.7
1,112.1
Loss on disposal of property, plant and equipment
0.5
1.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-383": { "value": "
2023 2022
Revenue Revenue
\u00a3m \u00a3m
Net foreign exchange gains included in operating profit
(4.6)
(3.2)
Research and development expense
73.6
70.3
Amortisation of intangible assets
49.6
48.0
Impairment of intangible assets treated as adjusting items
\u2013
0.2
Impairment of intangible assets
\u2013
0.5
Depreciation of owned property, plant and equipment
45.4
41.9
Impairment/(reversal of impairment) of owned property, plant and equipment and leased assets treated as
adjusting items
5.0
(2.3)
Impairment/(reversal of impairment) of owned property, plant and equipment
0.2
(0.6)
Depreciation of right\u2011of\u2011use assets
29.4
32.3
Cost of inventories recognised as an expense
1,183.7
1,112.1
Loss on disposal of property, plant and equipment
0.5
1.7
Goodwill impairment testing Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The Group has 12 (2022: 12) cash\u2011generating units to which goodwill is allocated. The recoverable amount of a CGU is the higher of its fair value less costs to sell and its value in use. Value in use is determined using cash flow projections from financial budgets, forecasts and plans approved by the Board covering a five\u2011year period, and include a terminal value multiple. The projected cash flows reflect the latest expectation of demand for products and services, including consideration of the future impacts of climate change, which is considered as part of the Group\u2019s five\u2011year strategic planning process. The key assumptions in these calculations are the long\u2011term growth rates and the discount rates applied to forecast cash flows, in addition to the achievement of the forecasts themselves. Long\u2011term growth rates are based on long\u2011term economic forecasts for growth in the manufacturing sector in the geographical regions in which the cash\u2011generating unit operates. Pre\u2011tax discount rates specific to each cash\u2011generating unit are calculated by adjusting country and region\u2011specific post\u2011tax weighted average cost of capital (WACC) for specific country risk premium, the Group\u2019s size risk premium and tax rate relevant to the jurisdiction in which the cash flows are generated. This exercise resulted in the use of the following ranges of values for the key assumptions:
2023 2022
% %
Discount rate
8.5-13.3
8.8\u201113.3
Short\u2011term growth rate
8.0-14.0
10.0\u201112.0
Long\u2011term growth rate
1.5-2.1
1.2\u20112.0
For the purpose of assessing the significance of CGUs, the Group uses a threshold of 10% of the total goodwill balance. The recoverable amount of the CGUs is determined from a value in use calculation and the key assumptions used in this calculation are the discount rate, growth rate and operating cash flows. These estimates are determined using the methodology discussed above and for those CGUs considered to be significant, outlined in the table below. 2022 results have been restated to reflect the goodwill allocation of Heatmiser and the structure change, both of which are described in Note 1.
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2023 \u00a3m % % %
CGU
Life Science & Fluid Control
201.4
10.5
8.0
2.0
Process Automation \u2013 Petrochemical & Isolation
115.2
11.8
8.0
2.0
Process Automation \u2013 Control Valves
96.5
13.3
8.0
2.0
Heatmiser
67.6
12.0
14.0
1.5
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2022 \u00a3m % % %
CGU
Life Science & Fluid Control
208.9
10.3
12.0
2.0
Process Automation \u2013 Petrochemical & Isolation
117.4
10.0
10.0
2.0
Process Automation \u2013 Control Valves
99.6
13.3
10.0
2.0
The carrying amount of goodwill allocated to CGUs deemed to be non\u2011significant is \u00a3199.6m (2022: \u00a3272.1m restated). Sensitivity to changes in assumptions The key estimates reflect the combination of assumptions used, including the long\u2011term growth rates and the discount rate applied to forecast cash flows, in addition to the achievement of the forecasts themselves. The directors do not consider that any reasonably possible changes to the key assumptions would cause the carrying amount to exceed the recoverable amount of the CGU. The aggregate amount of goodwill arising from acquisitions prior to 1 January 2004 that had been deducted from the profit and loss reserves and incorporated into the IFRS transitional balance sheet as at 1 January 2004, amounted to \u00a3364m. The cumulative impairment recognised in relation to goodwill is \u00a341m (2022: \u00a341m).", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-371": { "value": "Employee information The average number of people employed by the Group during the year is shown in the table below. 2022 comparatives have been restated to reflect the change to the business structure as described in Note 1.
2023
2022
(Restated)
Automation
6,542
7,102
Life Technology
4,410
3,947
Corporate
85
80
Total Group
11,037
11,129
The aggregate employment cost charged to operating profit for the year was:
2023 2022
\u00a3m \u00a3m
Wages and salaries
531.9
505.9
Share\u2011based payments
12.9
11.7
Social security costs
82.4
76.7
Pension costs
5.8
8.3
Total
633.0
602.6
The aggregate gains made by directors on the exercise of share options was \u00a33.7m (2022: \u00a32.6m). The remuneration, as defined in the Companies Act 2006 Schedule 5, for the executive directors comprises fixed and annual variable pay as set out in the table on page 147 of the Remuneration Report. For details of the non\u2011executive directors\u2019 remuneration please refer to page 159 of the Remuneration Report. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-372": { "value": "Research and development expenditure The cost of research and development expenditure charged directly to the income statement was \u00a373.6m (2022: \u00a370.3m). Included within this is amortisation of capitalised intangible development costs which amounted to \u00a37.3m (2022: \u00a38.2m) and across the Group a further \u00a36.2m (2022: \u00a35.9m) was capitalised in the year. ", "dimensions": { "concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-373": { "value": "Audit fees The Group engages its auditor, Deloitte, to perform other assurance assignments in addition to their statutory audit duties where their expertise, experience and knowledge of the Group should enable them to perform these assignments more efficiently than other similar service providers. The Group\u2019s policy on such assignments is set out in the Audit Committee Report on page 130. Fees earned by Deloitte and its associates during the year are set out below:
2023 2022
\u00a3m \u00a3m
Fees earned by the Company\u2019s auditor for the audit of the Company\u2019s Annual Accounts
0.2
0.2
The audit of the Company\u2019s subsidiaries pursuant to legislation
3.0
2.9
Other assurance services
0.1
0.1
Total
3.3
3.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-319": { "value": "6. Share-based payments The Group operates a number of equity and equity\u2011related compensation benefits to reward its employees. The estimated cost of awarding these share options is charged to the income statement over the period that the Group benefits from the employees\u2019 services. This cost is then added back to retained earnings, to reflect that there is no overall impact on the Group\u2019s balance sheet until the shares are issued to the employees when the options are exercised. The individual share option schemes, the number of options outstanding under each of them, the estimated cost of these options recognised in the income statement and the assumptions used in arriving at this estimated cost are described below. Accounting policy The fair value of the employee services received in exchange for the grant of the options is recognised as an expense each year. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non\u2011market vesting conditions (for example, profitability and sales growth targets). Non\u2011market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. The fair value of the options is determined based on the Monte Carlo and Black\u2011Scholes option\u2011pricing models. At each balance sheet date, the Group revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in the income statement. For newly issued shares, the proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. Outstanding share options At 31 December 2023, options to purchase ordinary shares had been granted to, but not yet exercised by, participants of IMI share option schemes as follows:
Date of grant
Number of shares
Price
Dates from which exercisable
IMI Sharesave Scheme
04.04.18
650
1012.68p
01.08.21 or 01.08.23
04.04.19
15,663
884.16p
01.08.22 or 01.08.24
02.04.20
11,966
904.66p
01.08.23 or 01.08.25
02.04.21
62,396
1166.58p
01.08.24 or 01.08.26
31.03.22
89,403
1260.18p
01.08.25 or 01.08.27
07.06.23
70,305
1458.36p
01.08.26 or 01.08.28
250,383
Purchase Plans
15.08.22
68,053
1155.78p
15.08.24
20.03.23
41,140
1375.11p
20.03.25
109,193
IMI Incentive Plan
18.03.19
9,880
\u2013
18.03.22
16.03.20
113,408
\u2013
16.03.23
22.03.21
735,433
\u2013
22.03.24
18.03.22
815,275
\u2013
09.03.25
24.03.23
822,056
\u2013
09.03.26
2,496,052
IMI Share Option Plan
11.03.14
22,450
1467
.00p
11.03.17
22,450
Total
2,878,078
Schemes under which options are outstanding
The options in the above table relate to the following share\u2011based payment schemes:
IMI Sharesave Scheme (SAYE)
This scheme is open to the majority of the Group\u2019s UK employees, including the executive directors, and allows the grant of options to
all participants at a discount of up to 20% below the market price. Such schemes are not subject to performance conditions and offer
tax incentives to encourage employees to use their own money to purchase IMI shares. SAYE options may be exercised within six
months of the date they first become exercisable.
Global Employee Share Purchase Plans (GESPP)
These plans were introduced in 2011 for the USA and Germany. The German and USA GESPP offer the opportunity to buy shares in IMI
at a fixed price at a future date. The German GESPP mirrors the UK Sharesave Scheme, with a minimum/maximum savings limit per
month and a contract duration of three to five years. The US GESPP also operates in a similar way to the UK Sharesave Scheme, with a
minimum/maximum savings limit per month, but the contract duration is for a fixed period of two years and different taxation
conditions apply for the exercise period. No further awards are intended to be granted under the German GESPP.
IMI Share Option Plan (SOP)
Share option awards were made from 2009 to selected senior managers and certain other employees under the SOP. These awards
are not subject to performance conditions, but are subject to a three year vesting period. The purpose of the SOP is to give selected
IMI employees (who are not executive directors of the Company) the opportunity to share the benefits of share price growth and to
increase their IMI shareholding.
Other share-based payment arrangements
The Group also operates the following employee share plans:
Share Incentive Plan (SIP)
The SIP is open to the majority of the Group\u2019s UK employees, including the executive directors. This scheme covers two separate
opportunities for employees to share in IMI\u2019s success, as follows:
\u2013 Partnership shares \u2013 allows employees to invest up to the statutory maximum from pre\u2011tax pay, which is used to buy IMI shares
\u2013 Free shares \u2013 allows a grant of shares to employees each year, up to the statutory maximum
Shares acquired or awarded under the SIP are not subject to performance conditions and offer tax incentives to encourage employees
to build up their shareholdings with the Company.
The IMI Incentive Plan (IIP)
In light of the expiry in 2015 of both the PSP and SMP, the IIP was introduced to act as the Company\u2019s sole senior executive long\u2011term
incentive plan. The IIP acts as an umbrella plan which allows the Company to grant different types of awards to different employee
groups in an efficient way. The IIP is to be used annually to grant \u2018Performance Share Awards\u2019 in respect of ordinary shares to the
executive directors and other members of senior management, subject to performance conditions. The IIP will also be used annually
to grant \u2018Bonus Share Awards\u2019 below board level. The IIP also gives the Company the ability to grant \u2018Restricted Stock Unit Awards\u2019
and \u2018Share Options\u2019. It is currently intended that Restricted Stock Unit Awards and share options will only be granted in response to
specific business requirements.
Options granted during the year
Number of Weighted Normal
options granted average exercisable
(thousand) option price date
SAYE
2019
200
884p
2022\u20112025
2020
68
905p
2023\u20112026
2021
75
1167p
2024\u20112027
2022
103
1260p
2025\u20112028
2023
75
1458p
2026-2029
GESPP
2019
33
903p
2021
2020
43
956p
2022
2021
\u2013
\u2013
2023
2022
85
1156p
2024
2023
44
1375p
2025
IIP
2019
845
\u2013
2021\u20112022
2020
1,466
\u2013
2022\u20112023
2021
891
\u2013
2023\u20112024
2022
929
\u2013
2024\u20112025
2023
859
\u2013
2025-2026
Movement in outstanding options in the year
1
Options
Options not granted granted at
at nil cost nil cost Total
Number of Weighted Number of Number of
options Range of average options options
(thousand) option prices option price (thousand) (thousand)
Outstanding at 1 January 2022
538
845\u20111518p
1116p
3,065
3,603
Exercisable at 1 January 2022
222
845\u20111518p
1325p
272
494
Granted
188
1156\u20111260p
1213p
1,033
1,221
Exercised
142
845\u20111467p
947p
533
675
Lapsed
65
845\u20111467p
1025p
306
371
Outstanding at 31 December 2022
519
884\u20111518p
1209p
3,255
3,774
Exercisable at 31 December 2022
180
884\u20111518p
1197p
477
657
Granted
119
1375-1458p
1428p
905
1,024
Exercised
191
845-1375p
1238p
799
989
Lapsed
66
845-1458p
1219p
594
660
Outstanding at 31 December 2023
382
884-1458p
1260p
2,767
3,149
Exercisable at 31 December 2023
25
905-1467p
1412p
195
286
2
1 Options not granted at nil cost include options granted under the following schemes: IMI Sharesave Scheme, Global Employee Share Purchase Plans and IMI Share Option Plan.
2 Options granted at nil cost are those granted under the Performance Share Plan, Share Matching Plan and IMI Incentive Plan.
Share-based payment charge for the year
The total expense recognised for the year arising from share\u2011based payments was \u00a312.9m (2022: \u00a311.7m) which comprises a charge
of \u00a315.9m (2022: \u00a315.5m) for the year, offset by a credit of \u00a33.0m (2022: \u00a33.8m) in respect of lapses.
\u00a32.8m (2022: \u00a32.7m) of the total charge and \u00a30.8m (2022: \u00a30.5m) of the total credit is in respect of options granted to directors.
Share-based payment valuation methodology
The fair value of services received in return for share options granted are measured by reference to the fair value of share options
granted, based on Black\u2011Scholes and Monte Carlo option pricing models. The assumptions used for grants in 2023 included a
dividend yield of 2.0% (2022: 2.0%), expected share price volatility of 29% (2022: 32%), a weighted average expected life of 3.7 years
(2022: 3.5 years) and a weighted average interest rate of 4.11% (2022: 1.75%). The expected volatility is wholly based on the historical
volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future
volatility due to publicly available information.
Other share-based payment disclosures
The weighted average remaining contractual life for the share options outstanding as at 31 December 2023 is 3.1 years (2022: 4.8 years)
and the weighted average fair value of share options granted in the year at their grant date was \u00a313.69 (2022: \u00a313.01).
The weighted average share price at the date of exercise of share options exercised during the year was \u00a315.18 (2022: \u00a314.71).
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-399": { "value": "Accounting policy The fair value of the employee services received in exchange for the grant of the options is recognised as an expense each year. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non\u2011market vesting conditions (for example, profitability and sales growth targets). Non\u2011market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. The fair value of the options is determined based on the Monte Carlo and Black\u2011Scholes option\u2011pricing models. At each balance sheet date, the Group revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in the income statement. For newly issued shares, the proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-347": { "value": "
Outstanding share options
At 31 December 2023, options to purchase ordinary shares had been granted to, but not yet exercised by, participants of IMI share
option schemes as follows:
Date of grant
Number of shares
Price
Dates from which exercisable
IMI Sharesave Scheme
04.04.18
650
1012.68p
01.08.21 or 01.08.23
04.04.19
15,663
884.16p
01.08.22 or 01.08.24
02.04.20
11,966
904.66p
01.08.23 or 01.08.25
02.04.21
62,396
1166.58p
01.08.24 or 01.08.26
31.03.22
89,403
1260.18p
01.08.25 or 01.08.27
07.06.23
70,305
1458.36p
01.08.26 or 01.08.28
250,383
Purchase Plans
15.08.22
68,053
1155.78p
15.08.24
20.03.23
41,140
1375.11p
20.03.25
109,193
IMI Incentive Plan
18.03.19
9,880
\u2013
18.03.22
16.03.20
113,408
\u2013
16.03.23
22.03.21
735,433
\u2013
22.03.24
18.03.22
815,275
\u2013
09.03.25
24.03.23
822,056
\u2013
09.03.26
2,496,052
IMI Share Option Plan
11.03.14
22,450
1467
.00p
11.03.17
22,450
Total
2,878,078
", "dimensions": { "concept": "ifrs-full:DisclosureOfRangeOfExercisePricesOfOutstandingShareOptionsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-348": { "value": "Options granted during the year
Number of Weighted Normal
options granted average exercisable
(thousand) option price date
SAYE
2019
200
884p
2022\u20112025
2020
68
905p
2023\u20112026
2021
75
1167p
2024\u20112027
2022
103
1260p
2025\u20112028
2023
75
1458p
2026-2029
GESPP
2019
33
903p
2021
2020
43
956p
2022
2021
\u2013
\u2013
2023
2022
85
1156p
2024
2023
44
1375p
2025
IIP
2019
845
\u2013
2021\u20112022
2020
1,466
\u2013
2022\u20112023
2021
891
\u2013
2023\u20112024
2022
929
\u2013
2024\u20112025
2023
859
\u2013
2025-2026
Movement in outstanding options in the year 1
Options
Options not granted granted at
at nil cost nil cost Total
Number of Weighted Number of Number of
options Range of average options options
(thousand) option prices option price (thousand) (thousand)
Outstanding at 1 January 2022
538
845\u20111518p
1116p
3,065
3,603
Exercisable at 1 January 2022
222
845\u20111518p
1325p
272
494
Granted
188
1156\u20111260p
1213p
1,033
1,221
Exercised
142
845\u20111467p
947p
533
675
Lapsed
65
845\u20111467p
1025p
306
371
Outstanding at 31 December 2022
519
884\u20111518p
1209p
3,255
3,774
Exercisable at 31 December 2022
180
884\u20111518p
1197p
477
657
Granted
119
1375-1458p
1428p
905
1,024
Exercised
191
845-1375p
1238p
799
989
Lapsed
66
845-1458p
1219p
594
660
Outstanding at 31 December 2023
382
884-1458p
1260p
2,767
3,149
Exercisable at 31 December 2023
25
905-1467p
1412p
195
286
2 1 Options not granted at nil cost include options granted under the following schemes: IMI Sharesave Scheme, Global Employee Share Purchase Plans and IMI Share Option Plan. 2 Options granted at nil cost are those granted under the Performance Share Plan, Share Matching Plan and IMI Incentive Plan. ", "dimensions": { "concept": "ifrs-full:DisclosureOfNumberAndWeightedAverageExercisePricesOfShareOptionsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-320": { "value": "
7. Earnings per ordinary share
Earnings per share (EPS) is the amount of post\u2011tax profit attributable to each share (excluding those held in the Employee Benefit Trust
or by the Company). Basic EPS measures are calculated as the Group profit for the year attributable to equity shareholders, divided by
the weighted average number of shares in issue during the year. Diluted EPS takes into account the dilutive effect of all outstanding
share options priced below the market price, in arriving at the number of shares used in its calculation.
Both of these measures are also presented on an adjusted basis to assist the reader of the financial statements and provide insight into
the performance of the Group. The table below demonstrates how this calculation has been performed.
2023 2022
Key million million
Weighted average number of shares for the purpose of basic earnings per share
A
259.3
258.3
Dilutive effect of employee share options
1.0
1.2
Weighted average number of shares for the purpose of diluted earnings per share
B
260.3
259.5
\u00a3m
\u00a3m
Statutory profit for the year
C
237.3
226.3
Total adjusting item charges included in profit before tax
85.0
60.7
Total adjusting item credits included in taxation
(19.4)
(14.6)
Earnings for adjusted EPS
D
302.9
272.4
2023
2022
Statutory EPS measures
Statutory basic EPS
C/A
91.5p
87.6p
Statutory diluted EPS
C/B
91.2p
87.2p
Adjusted EPS measures
Adjusted basic EPS
D/A
116.8p
105.5p
Adjusted diluted EPS
D/B
116.4p
105.0p
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-390": { "value": "8. Net financing costs Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2023
2022
Financial Financial
Interest Instruments Total Interest Instruments Total
Recognised in the income statement \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Interest income on bank deposits
8.1
8.1
4.6
4.6
Financial income
8.1
\u2013
8.1
4.6
\u2013
4.6
Interest expense on interest\u2011bearing loans and borrowings
(27.9)
(27.9)
(21.0)
(21.0)
Interest expense on leases
(2.9)
(2.9)
(2.8)
(2.8)
Financial expense
(30.8)
\u2013
(30.8)
(23.8)
\u2013
(23.8)
Recognised in other comprehensive income
Gains on instruments measured at fair value through profit or loss:
Other economic hedges
7.0
7.0
4.9
4.9
Net financial (expense)/income relating to defined benefit pension
schemes
(0.5)
(0.5)
1.5
1.5
Net financial (expense)/income
(23.2)
7.0
(16.2)
(17.7)
4.9
(12.8)
Included in financial instruments are current year trading gains and losses on economically effective transactions, which, for management reporting purposes, are included in adjusted revenue and operating profit (Note 3). For statutory purposes, these are shown within net financial income and expense above. Gains or losses for future year transactions are in respect of financial instruments held by the Group to provide stability of future trading cash flows.
2023 2022
Recognised in other comprehensive income \u00a3m \u00a3m
Gain/(loss) arising on hedging instruments designated in hedges of the net assets in foreign operations
6.7
(7.5)
Exchange differences on translation of foreign operations net of funding revaluations
(41.1)
40.9
Exchange differences reclassified to the income statement on disposal of operations
(0.2)
0.6
Income tax on items recognised in other comprehensive income
1.8
(0.3)
Total items recognised in other comprehensive income (net of tax)
(32.8)
33.7
Recognised in statement of changes in equity
Translation reserve
(32.8)
33.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-387": { "value": "8. Net financing costs Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2023
2022
Financial Financial
Interest Instruments Total Interest Instruments Total
Recognised in the income statement \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Interest income on bank deposits
8.1
8.1
4.6
4.6
Financial income
8.1
\u2013
8.1
4.6
\u2013
4.6
Interest expense on interest\u2011bearing loans and borrowings
(27.9)
(27.9)
(21.0)
(21.0)
Interest expense on leases
(2.9)
(2.9)
(2.8)
(2.8)
Financial expense
(30.8)
\u2013
(30.8)
(23.8)
\u2013
(23.8)
Recognised in other comprehensive income
Gains on instruments measured at fair value through profit or loss:
Other economic hedges
7.0
7.0
4.9
4.9
Net financial (expense)/income relating to defined benefit pension
schemes
(0.5)
(0.5)
1.5
1.5
Net financial (expense)/income
(23.2)
7.0
(16.2)
(17.7)
4.9
(12.8)
Included in financial instruments are current year trading gains and losses on economically effective transactions, which, for management reporting purposes, are included in adjusted revenue and operating profit (Note 3). For statutory purposes, these are shown within net financial income and expense above. Gains or losses for future year transactions are in respect of financial instruments held by the Group to provide stability of future trading cash flows.
2023 2022
Recognised in other comprehensive income \u00a3m \u00a3m
Gain/(loss) arising on hedging instruments designated in hedges of the net assets in foreign operations
6.7
(7.5)
Exchange differences on translation of foreign operations net of funding revaluations
(41.1)
40.9
Exchange differences reclassified to the income statement on disposal of operations
(0.2)
0.6
Income tax on items recognised in other comprehensive income
1.8
(0.3)
Total items recognised in other comprehensive income (net of tax)
(32.8)
33.7
Recognised in statement of changes in equity
Translation reserve
(32.8)
33.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-384": { "value": "8. Net financing costs Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2023
2022
Financial Financial
Interest Instruments Total Interest Instruments Total
Recognised in the income statement \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Interest income on bank deposits
8.1
8.1
4.6
4.6
Financial income
8.1
\u2013
8.1
4.6
\u2013
4.6
Interest expense on interest\u2011bearing loans and borrowings
(27.9)
(27.9)
(21.0)
(21.0)
Interest expense on leases
(2.9)
(2.9)
(2.8)
(2.8)
Financial expense
(30.8)
\u2013
(30.8)
(23.8)
\u2013
(23.8)
Recognised in other comprehensive income
Gains on instruments measured at fair value through profit or loss:
Other economic hedges
7.0
7.0
4.9
4.9
Net financial (expense)/income relating to defined benefit pension
schemes
(0.5)
(0.5)
1.5
1.5
Net financial (expense)/income
(23.2)
7.0
(16.2)
(17.7)
4.9
(12.8)
Included in financial instruments are current year trading gains and losses on economically effective transactions, which, for management reporting purposes, are included in adjusted revenue and operating profit (Note 3). For statutory purposes, these are shown within net financial income and expense above. Gains or losses for future year transactions are in respect of financial instruments held by the Group to provide stability of future trading cash flows.
2023 2022
Recognised in other comprehensive income \u00a3m \u00a3m
Gain/(loss) arising on hedging instruments designated in hedges of the net assets in foreign operations
6.7
(7.5)
Exchange differences on translation of foreign operations net of funding revaluations
(41.1)
40.9
Exchange differences reclassified to the income statement on disposal of operations
(0.2)
0.6
Income tax on items recognised in other comprehensive income
1.8
(0.3)
Total items recognised in other comprehensive income (net of tax)
(32.8)
33.7
Recognised in statement of changes in equity
Translation reserve
(32.8)
33.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-374": { "value": "8. Net financing costs Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2023
2022
Financial Financial
Interest Instruments Total Interest Instruments Total
Recognised in the income statement \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Interest income on bank deposits
8.1
8.1
4.6
4.6
Financial income
8.1
\u2013
8.1
4.6
\u2013
4.6
Interest expense on interest\u2011bearing loans and borrowings
(27.9)
(27.9)
(21.0)
(21.0)
Interest expense on leases
(2.9)
(2.9)
(2.8)
(2.8)
Financial expense
(30.8)
\u2013
(30.8)
(23.8)
\u2013
(23.8)
Recognised in other comprehensive income
Gains on instruments measured at fair value through profit or loss:
Other economic hedges
7.0
7.0
4.9
4.9
Net financial (expense)/income relating to defined benefit pension
schemes
(0.5)
(0.5)
1.5
1.5
Net financial (expense)/income
(23.2)
7.0
(16.2)
(17.7)
4.9
(12.8)
Included in financial instruments are current year trading gains and losses on economically effective transactions, which, for management reporting purposes, are included in adjusted revenue and operating profit (Note 3). For statutory purposes, these are shown within net financial income and expense above. Gains or losses for future year transactions are in respect of financial instruments held by the Group to provide stability of future trading cash flows.
2023 2022
Recognised in other comprehensive income \u00a3m \u00a3m
Gain/(loss) arising on hedging instruments designated in hedges of the net assets in foreign operations
6.7
(7.5)
Exchange differences on translation of foreign operations net of funding revaluations
(41.1)
40.9
Exchange differences reclassified to the income statement on disposal of operations
(0.2)
0.6
Income tax on items recognised in other comprehensive income
1.8
(0.3)
Total items recognised in other comprehensive income (net of tax)
(32.8)
33.7
Recognised in statement of changes in equity
Translation reserve
(32.8)
33.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-349": { "value": "8. Net financing costs Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2023
2022
Financial Financial
Interest Instruments Total Interest Instruments Total
Recognised in the income statement \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Interest income on bank deposits
8.1
8.1
4.6
4.6
Financial income
8.1
\u2013
8.1
4.6
\u2013
4.6
Interest expense on interest\u2011bearing loans and borrowings
(27.9)
(27.9)
(21.0)
(21.0)
Interest expense on leases
(2.9)
(2.9)
(2.8)
(2.8)
Financial expense
(30.8)
\u2013
(30.8)
(23.8)
\u2013
(23.8)
Recognised in other comprehensive income
Gains on instruments measured at fair value through profit or loss:
Other economic hedges
7.0
7.0
4.9
4.9
Net financial (expense)/income relating to defined benefit pension
schemes
(0.5)
(0.5)
1.5
1.5
Net financial (expense)/income
(23.2)
7.0
(16.2)
(17.7)
4.9
(12.8)
Included in financial instruments are current year trading gains and losses on economically effective transactions, which, for management reporting purposes, are included in adjusted revenue and operating profit (Note 3). For statutory purposes, these are shown within net financial income and expense above. Gains or losses for future year transactions are in respect of financial instruments held by the Group to provide stability of future trading cash flows.
2023 2022
Recognised in other comprehensive income \u00a3m \u00a3m
Gain/(loss) arising on hedging instruments designated in hedges of the net assets in foreign operations
6.7
(7.5)
Exchange differences on translation of foreign operations net of funding revaluations
(41.1)
40.9
Exchange differences reclassified to the income statement on disposal of operations
(0.2)
0.6
Income tax on items recognised in other comprehensive income
1.8
(0.3)
Total items recognised in other comprehensive income (net of tax)
(32.8)
33.7
Recognised in statement of changes in equity
Translation reserve
(32.8)
33.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-321": { "value": "8. Net financing costs Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2023
2022
Financial Financial
Interest Instruments Total Interest Instruments Total
Recognised in the income statement \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Interest income on bank deposits
8.1
8.1
4.6
4.6
Financial income
8.1
\u2013
8.1
4.6
\u2013
4.6
Interest expense on interest\u2011bearing loans and borrowings
(27.9)
(27.9)
(21.0)
(21.0)
Interest expense on leases
(2.9)
(2.9)
(2.8)
(2.8)
Financial expense
(30.8)
\u2013
(30.8)
(23.8)
\u2013
(23.8)
Recognised in other comprehensive income
Gains on instruments measured at fair value through profit or loss:
Other economic hedges
7.0
7.0
4.9
4.9
Net financial (expense)/income relating to defined benefit pension
schemes
(0.5)
(0.5)
1.5
1.5
Net financial (expense)/income
(23.2)
7.0
(16.2)
(17.7)
4.9
(12.8)
Included in financial instruments are current year trading gains and losses on economically effective transactions, which, for management reporting purposes, are included in adjusted revenue and operating profit (Note 3). For statutory purposes, these are shown within net financial income and expense above. Gains or losses for future year transactions are in respect of financial instruments held by the Group to provide stability of future trading cash flows.
2023 2022
Recognised in other comprehensive income \u00a3m \u00a3m
Gain/(loss) arising on hedging instruments designated in hedges of the net assets in foreign operations
6.7
(7.5)
Exchange differences on translation of foreign operations net of funding revaluations
(41.1)
40.9
Exchange differences reclassified to the income statement on disposal of operations
(0.2)
0.6
Income tax on items recognised in other comprehensive income
1.8
(0.3)
Total items recognised in other comprehensive income (net of tax)
(32.8)
33.7
Recognised in statement of changes in equity
Translation reserve
(32.8)
33.7
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-412": { "value": "Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-400": { "value": "Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-418": { "value": "Accounting policy Financial income comprises interest receivable on funds invested, income from investments and gains on hedging instruments that are recognised in the income statement. Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the income statement on the date that the dividend is declared. Financial expense comprises interest payable on borrowings calculated using the effective interest rate method, the interest\u2011related element of derivatives and losses on financial instruments that are recognised in the income statement. The interest expense component of lease payments is recognised in the income statement applying territory\u2011specific incremental borrowing rates. Net finance expense relating to defined benefit pension schemes represents the assumed interest on the difference between employee benefit plan liabilities and the employee benefit plan assets. The finance income or expense on mark\u2011to\u2011market movements on interest and foreign exchange derivatives and other financing costs are excluded from adjusted earnings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-322": { "value": "9. Taxation IMI operates through subsidiary companies all around the world that pay many different taxes, such as corporate income taxes, VAT, payroll withholdings, social security contributions, customs import duties and excise duties. This note aggregates only those corporate income taxes that are or will be levied on the profits of IMI plc and its subsidiary companies for periods leading up to and including the balance sheet date. The profits of each company are subject to certain adjustments as specified by applicable tax laws in each country to arrive at the tax liability that is expected to result on its tax returns. Where these adjustments have future tax impact, then deferred taxes may also be recorded. Accounting policy Current tax payable/receivable represents the expected tax payable/receivable on the taxable profits for the year, using tax rates enacted or substantively enacted at the balance sheet date and taking into account any adjustments in respect of prior years. Deferred tax is provided, using the balance sheet method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that the timing of the reversal of the differences can be controlled and it is probable that the differences will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to apply when the temporary differences reverse, based on the tax laws that have been enacted or substantively enacted by the balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entities or different taxable entities where there is an intention to settle the balances on a net basis. The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related to the OECD Inclusive Framework agreement for a global minimum corporate income tax rate. In common with many multinational companies, IMI faces tax audits in jurisdictions around the world, including in relation to the transfer pricing of goods and services between associated entities within the Group, the outcomes of which are uncertain. These tax audits may be subject to inter\u2011government negotiations. The matters under discussion are often complex and can take many years to resolve. Tax liabilities are recorded based on Management\u2019s estimate of either the most likely amount or the expected amount depending on which method is expected to better reflect the resolution of the uncertainty.
Tax governance, risk and strategy
IMI recognises its corporate responsibility to ensure that all businesses within the IMI Group follow responsible tax practices to enhance
long\u2011term shareholder value, whilst also contributing to the public expenditure and the overall welfare of the communities in which it
operates. Accordingly, the IMI Tax Policy sets the core principles of compliance, fairness, value and transparency for the management
of the Group\u2019s tax affairs.
This Policy has been approved by the Board, fully communicated to subsidiary businesses, and is reviewed to ensure that responsible
business practices across the Group are maintained. The Chief Financial Officer has primary responsibility for all tax matters and keeps
the Board apprised of any significant issues or changes to the Tax Policy. A robust tax governance framework has also been established
under which the Executive Committee and the IMI Board are apprised on a regular basis of any material or significant tax matters,
so that appropriate action can be implemented. Through our internal communications platform, the Group communicates policies,
procedures, guidance and best practices to improve the management of taxation across its subsidiary companies worldwide.
Compliance: IMI pays and collects significant amounts of taxes around the world as a result of its business activities. It seeks to manage
its taxation obligations worldwide in compliance with all applicable tax laws and regulations, as well as fully in line with the Group\u2019s
Code of Conduct. Accordingly, the tax contribution by the individual businesses is monitored and robust standard tax compliance
processes operate together with appropriate financial controls to ensure that all tax returns are complete, accurate and filed on a timely
basis with the tax authorities around the world and the declared taxes are paid on time. Furthermore, the preparation and filing of the
corporate income tax returns for IMI subsidiary companies worldwide have been largely outsourced to one tax advisory firm.
Tax laws are often complex, which can lead to inconsistent interpretations by different stakeholders. Where this occurs, IMI may reduce
uncertainty and controversy through various actions, including proactive discussion with the fiscal authorities to obtain early resolution
and securing external tax advice to ensure the robust interpretation of tax laws and practices.
The Group Tax Policy is fully aligned with the Group\u2019s Code of Conduct, which requires the Group and its employees and agents to act
in compliance with applicable laws and with fairness and integrity in all of its business dealings. IMI has a zero\u2011tolerance approach to tax
evasion and the facilitation of tax evasion. Consideration of UK legislation regarding third party tax evasion has also been incorporated
into the Group\u2019s prevention procedures, including employee training.
Fairness: IMI seeks to record its profits across the subsidiary companies around the world on an arm\u2019s length basis in accordance with
internationally accepted best practices, recognising the relative contributions of people, assets, intellectual property and risks borne
by the various businesses. The resulting allocation of profits is regularly tested for compliance with this standard.
IMI has taken action to ensure that it meets the enhanced transfer pricing disclosures and documentation requirements by tax
authorities as a result of the Base Erosion & Profit Shifting (commonly referred to as \u2018BEPS\u2019) initiative by the OECD.
Value: IMI manages the impact of taxation on its businesses in a responsible manner by only adopting legitimate and commercial
positions. In doing so, the Group may make use of legitimate tax incentives, exemptions and statutory alternatives offered by
governments and will look to ensure that it is not taxed more than once on the same profit. As a UK\u2011headquartered group, IMI\u2019s profits
are ultimately subject to UK taxation, although as the Group pays significant taxes overseas, the overall effective tax rate for the Group
is slightly different from the UK statutory tax rate.
Transparency: IMI aims to build positive working relationships with tax authorities by cooperating in a constructive, open and timely
manner. IMI seeks to disclose its tax affairs in its published accounts and taxation returns fully in accordance with the applicable
standards and, where appropriate, will supplement its tax disclosures with further information to better inform, and to be transparent to,
its stakeholders.
Risk: IMI engages external support to manage tax risks and achieve the strategic objectives outlined above. Tax risks are regularly
assessed for all companies within the Group, promptly addressed and reported so that they may be appropriately provided and
disclosed in the relevant accounts and tax returns. To the extent that identified tax risks are material they will be reported to the
Executive Committee through the Group\u2019s process for strategic risk management as described on page 88.
UK Corporation tax
The average rate of corporation tax in the UK for 2023 was 23.5% (2022: 19%). From 1 April 2023, the statutory rate increased from 19%
to 25%. UK deferred tax assets and liabilities have therefore been calculated using a rate of 25% (2022: 25%).
Tax payments
During the year, the Group made payments of corporate income tax of \u00a376.1m (2022: \u00a348.6m), principally arising as follows:
Jurisdiction of companies making corporate income tax payments:
2022: \u00a348.6m 2023: \u00a376.1m
A
Germany \u00a310.4m
B
USA \u00a31.1m
C
Italy \u00a31.0m
D
Japan \u00a33.1m
E
Switzerland \u00a35.8m
F
UK \u00a35.7m
G
Sweden \u00a30.5m
H
Austria \u00a30.1m
I
China \u00a33.4m
J
Czech Republic \u00a32.3m
K
South Korea \u00a32.7m
L
India \u00a33.8m
M
Singapore \u00a30.9m
N
Other \u00a37.8m
A
F
G
H
I
J
B
C
D
E
K
L
M
N
A
Germany \u00a39.1m
B
USA \u00a313.9m
C
Italy \u00a33.4m
D
Japan \u00a32.6m
E
Switzerland \u00a310.5m
F
UK \u00a311.1m
G
Sweden \u00a31.3m
H
Austria \u00a30.7m
I
China \u00a35.9m
J
Czech Republic \u00a31.4m
K
South Korea \u00a30.3m
L
India \u00a34.3m
M
Singapore \u00a32.2m
N
Other \u00a39.4m
A
F
G
H
I
J
B
C
D
E
K
L
M
N
There is normally an element of volatility in the annual payments of corporate income taxes due to the timing of assessments, acquisitions
and disposals, exceptional items and payments on account in the many countries in which the Group operates. Changes in the jurisdictions
in which profits are earned can have an impact on cashflow levels which may take time to be reflected in the tax cashflow.
The level of payments made during 2023 increased significantly compared to 2022. Of the significant movements, the UK and USA
payments for 2022 included the recovery of tax assets and receivables and so the 2023 levels of payment are more normal. The USA
also reflects an increase in taxable profits, including recent acquisitions. Switzerland payments reflect the timing differences in profits
being earned and tax assessments being received. Other territorial movements in payments largely reflect shifts in trading.
In addition, the Group makes substantial other tax payments relating to employment, consumption, procurement and investment to tax
authorities around the world.
Recognised in the income statement
This section sets out the current and deferred tax charges, which together comprise the total tax charge in the income statement.
2023 2022
\u00a3m \u00a3m
Current tax charge
Current year charge
86.7
63.0
Adjustments in respect of prior years
(7.3)
(1.9)
79.4
61.1
Deferred taxation
Origination and reversal of temporary differences
(14.3)
(2.0)
Total income tax charge
65.1
59.1
Reconciliation of effective tax rate
As IMI\u2019s head office and parent company is domiciled in the UK, the Group references its effective tax rate to the UK corporation tax
rate, despite only a small portion of the Group\u2019s business being in the UK. Therefore, the following tax reconciliation applies the UK
corporation tax rate for the year to profit before tax, both before and after adjusting items. The resulting tax charge is reconciled to
the actual tax charge for the Group, by taking account of specific tax adjustments as follows:
2023
2022
Adjusted Adjusting Total Adjusted Adjusting Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Profit before tax
387.4
(85.0)
302.4
346.1
(60.7)
285.4
Income tax using the Company\u2019s domestic rate of tax of 23.5%
(2022: 19.0%)
91.0
(20.0)
71.0
65.8
(11.5)
54.3
Effects of:
Non\u2011deductible items
4.6
0.7
5.3
3.0
0.4
3.4
Non\u2011taxable loss on disposal of businesses
(0.3)
\u2013
(0.3)
\u2013
0.9
0.9
Utilisation of losses on which no deferred tax had been
recognised
\u2013
\u2013
\u2013
(1.0)
\u2013
(1.0)
Current year losses for which no deferred tax asset has
been recognised
0.8
\u2013
0.8
0.2
\u2013
0.2
Recognition of deferred tax asset on previously unprovided
timing differences
\u2013
\u2013
\u2013
(0.8)
\u2013
(0.8)
Differing tax rates
(4.0)
(1.6)
(5.6)
12.5
(4.4)
8.1
Adjustments to prior year current and deferred tax charges
(7.6)
1.5
(6.1)
(6.0)
\u2013
(6.0)
Total tax in income statement
84.5
(19.4)
65.1
73.7
(14.6)
59.1
Income tax expense reported in the consolidated
income statement
84.5
(19.4)
65.1
73.7
(14.6)
59.1
Effective rate of tax:
21.8%
21.5%
21.3%
20.7%
Events after the reporting period
During 2023, the UK government substantively enacted the OECD Inclusive Framework agreement for a global minimum corporate
income tax rate of 15%. For IMI, this takes effect from 1 January 2024. The event does not therefore affect IMI\u2019s results for 2023. IMI is
evaluating the impact that this will have on future accounting periods but expects that its entities in most territories will not be impacted
by this minimum tax requirement. To the extent top\u2011up taxes are required, the impact on IMI\u2019s results is expected to be minimal.
However, further evaluation will be undertaken as additional guidance becomes available.
Recognised outside of the income statement
In addition to amounts charged to the income statement, some current tax and deferred tax is charged/(credited) directly to equity
or through other comprehensive income, which can be analysed as follows:
2023 2022
\u00a3m \u00a3m
Deferred tax:
On equity\u2011settled transactions
(0.4)
1.9
On remeasurement gains and on defined benefit plans
(8.6)
(20.4)
(9.0)
(18.5)
Current tax:
On change in value of effective net investment hedge derivatives
(1.8)
0.3
On equity\u2011settled transactions
(0.1)
\u2013
(10.9)
(18.2)
Of which the following amounts are charged/(credited):
to the statement of comprehensive income
(10.4)
(20.1)
to the statement of changes in equity
(0.5)
1.9
(10.9)
(18.2)
Recognised deferred tax assets and liabilities
Deferred taxes record the tax consequences of temporary differences between the accounting and taxation recognition of certain items,
as explained below:
Assets
Liabilities
Net
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
13.0
6.2
(67.6)
(76.3)
(54.6)
(70.1)
Inventories
6.4
5.1
(0.8)
(1.7)
5.6
3.4
Revaluation of derivatives
0.5
0.5
(1.1)
(0.8)
(0.6)
(0.3)
Pension and share\u2011based payments
13.5
12.1
\u2013
(7.1)
13.5
5.0
Short term timing differences
29.7
31.1
(5.6)
(5.8)
24.1
25.3
Other tax credits and losses
1.4
1.7
\u2013
\u2013
1.4
1.7
64.5
56.7
(75.1)
(91.7)
(10.6)
(35.0)
Offsetting within tax jurisdictions
(41.8)
(32.5)
41.8
32.5
\u2013
\u2013
Total deferred tax assets and liabilities
22.7
24.2
(33.3)
(59.2)
(10.6)
(35.0)
The movement in the net deferred tax balances has been recognised in the financial statements, as analysed below:
Recognised Recognised
Balance at in the outside the
1 Jan 23 income income Acquisitions/ Balance at
(Restated) statement statement Exchange disposals 31 Dec 23
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(70.1)
13.8
1.7
(54.6)
Inventories
3.4
2.3
(0.1)
5.6
Revaluation of derivatives
(0.3)
(0.3)
(0.6)
Pension and share\u2011based payments
5.0
(0.5)
9.0
13.5
Short\u2011term timing differences
25.3
(0.8)
(0.4)
24.1
Other tax credits and losses
1.7
(0.2)
(0.1)
1.4
Net deferred tax (liability)/asset
(35.0)
14.3
9.0
1.1
\u2013
(10.6)
Recognised
in the Recognised
income outside the Acquisitions/ Balance at
Balance at statement income disposals 31 Dec 22
1 Jan 22 (Restated) statement Exchange (Restated) (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(48.7)
6.0
(4.4)
(23.0)
(70.1)
Inventories
3.3
0.4
0.1
(0.4)
3.4
Revaluation of derivatives
(0.6)
0.3
(0.3)
Pension and share\u2011based payments
(13.9)
(0.2)
18.5
0.6
5.0
Short\u2011term timing differences
25.0
(1.7)
1.6
0.4
25.3
Other tax credits and losses
4.4
(2.8)
0.1
1.7
Net deferred tax (liability)/asset
(30.5)
2.0
18.5
(2.0)
(23.0)
(35.0)
All exchange movements are taken through the translation reserve.
Unrecognised deferred tax assets and liabilities
Deferred assets are reviewed at each reporting date. Deferred tax assets have not been recognised for the following temporary differences:
2023
2022
Gross Tax Gross Tax
amount effected amount effected
\u00a3m \u00a3m \u00a3m \u00a3m
Tax losses expiring:
Within 10 years
2.3
0.6
7.4
1.8
Available indefinitely
18.1
4.8
46.0
12.0
Capital losses expiring:
Within 10 years
\u2013
\u2013
\u2013
\u2013
Available indefinitely
118.5
29.7
119.2
29.9
Surplus interest expiring:
Within 10 years
0.6
0.1
0.5
0.1
Available indefinitely
\u2013
\u2013
\u2013
\u2013
Other temporary differences:
Within 10 years
56.2
3.5
\u2013
\u2013
Available indefinitely
\u2013
\u2013
\u2013
\u2013
195.7
38.7
173.1
43.8
Deferred tax assets have not been recognised for these temporary differences due to uncertainty over suitable future taxable profits
and therefore their ability to be recovered. In assessing the probability of recovery, the Group assesses the likelihood of them being
recovered within a reasonably foreseeable time frame, this being typically a minimum of five years, taking into account the future
expected profit profile business model of the relevant company and country. The Group also considers the nature of the temporary
differences, and any potential legislative restrictions on use. In some instances, these amounts are yet to be accepted by the tax
authorities and could be challenged. The majority of these amounts have no expiry date as noted in the table above.
It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption. However,
\u00a3159.4m (2022: \u00a3112.9m) of those earnings may still result in a tax liability principally as a result of withholding taxes levied by the
overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed \u00a39.0m (2022: \u00a36.6m),
of which \u00a33.5m (2022: \u00a33.2m) has been provided on the basis that the Group expects to remit these amounts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-413": { "value": "Accounting policy Current tax payable/receivable represents the expected tax payable/receivable on the taxable profits for the year, using tax rates enacted or substantively enacted at the balance sheet date and taking into account any adjustments in respect of prior years. Deferred tax is provided, using the balance sheet method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that the timing of the reversal of the differences can be controlled and it is probable that the differences will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to apply when the temporary differences reverse, based on the tax laws that have been enacted or substantively enacted by the balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entities or different taxable entities where there is an intention to settle the balances on a net basis. The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related to the OECD Inclusive Framework agreement for a global minimum corporate income tax rate. In common with many multinational companies, IMI faces tax audits in jurisdictions around the world, including in relation to the transfer pricing of goods and services between associated entities within the Group, the outcomes of which are uncertain. These tax audits may be subject to inter\u2011government negotiations. The matters under discussion are often complex and can take many years to resolve. Tax liabilities are recorded based on Management\u2019s estimate of either the most likely amount or the expected amount depending on which method is expected to better reflect the resolution of the uncertainty. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-401": { "value": "Accounting policy Current tax payable/receivable represents the expected tax payable/receivable on the taxable profits for the year, using tax rates enacted or substantively enacted at the balance sheet date and taking into account any adjustments in respect of prior years. Deferred tax is provided, using the balance sheet method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that the timing of the reversal of the differences can be controlled and it is probable that the differences will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to apply when the temporary differences reverse, based on the tax laws that have been enacted or substantively enacted by the balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entities or different taxable entities where there is an intention to settle the balances on a net basis. The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related to the OECD Inclusive Framework agreement for a global minimum corporate income tax rate. In common with many multinational companies, IMI faces tax audits in jurisdictions around the world, including in relation to the transfer pricing of goods and services between associated entities within the Group, the outcomes of which are uncertain. These tax audits may be subject to inter\u2011government negotiations. The matters under discussion are often complex and can take many years to resolve. Tax liabilities are recorded based on Management\u2019s estimate of either the most likely amount or the expected amount depending on which method is expected to better reflect the resolution of the uncertainty. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-391": { "value": "Recognised deferred tax assets and liabilities Deferred taxes record the tax consequences of temporary differences between the accounting and taxation recognition of certain items, as explained below:
Assets
Liabilities
Net
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
13.0
6.2
(67.6)
(76.3)
(54.6)
(70.1)
Inventories
6.4
5.1
(0.8)
(1.7)
5.6
3.4
Revaluation of derivatives
0.5
0.5
(1.1)
(0.8)
(0.6)
(0.3)
Pension and share\u2011based payments
13.5
12.1
\u2013
(7.1)
13.5
5.0
Short term timing differences
29.7
31.1
(5.6)
(5.8)
24.1
25.3
Other tax credits and losses
1.4
1.7
\u2013
\u2013
1.4
1.7
64.5
56.7
(75.1)
(91.7)
(10.6)
(35.0)
Offsetting within tax jurisdictions
(41.8)
(32.5)
41.8
32.5
\u2013
\u2013
Total deferred tax assets and liabilities
22.7
24.2
(33.3)
(59.2)
(10.6)
(35.0)
The movement in the net deferred tax balances has been recognised in the financial statements, as analysed below:
Recognised Recognised
Balance at in the outside the
1 Jan 23 income income Acquisitions/ Balance at
(Restated) statement statement Exchange disposals 31 Dec 23
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(70.1)
13.8
1.7
(54.6)
Inventories
3.4
2.3
(0.1)
5.6
Revaluation of derivatives
(0.3)
(0.3)
(0.6)
Pension and share\u2011based payments
5.0
(0.5)
9.0
13.5
Short\u2011term timing differences
25.3
(0.8)
(0.4)
24.1
Other tax credits and losses
1.7
(0.2)
(0.1)
1.4
Net deferred tax (liability)/asset
(35.0)
14.3
9.0
1.1
\u2013
(10.6)
Recognised
in the Recognised
income outside the Acquisitions/ Balance at
Balance at statement income disposals 31 Dec 22
1 Jan 22 (Restated) statement Exchange (Restated) (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(48.7)
6.0
(4.4)
(23.0)
(70.1)
Inventories
3.3
0.4
0.1
(0.4)
3.4
Revaluation of derivatives
(0.6)
0.3
(0.3)
Pension and share\u2011based payments
(13.9)
(0.2)
18.5
0.6
5.0
Short\u2011term timing differences
25.0
(1.7)
1.6
0.4
25.3
Other tax credits and losses
4.4
(2.8)
0.1
1.7
Net deferred tax (liability)/asset
(30.5)
2.0
18.5
(2.0)
(23.0)
(35.0)
All exchange movements are taken through the translation reserve. Unrecognised deferred tax assets and liabilities Deferred assets are reviewed at each reporting date. Deferred tax assets have not been recognised for the following temporary differences:
2023
2022
Gross Tax Gross Tax
amount effected amount effected
\u00a3m \u00a3m \u00a3m \u00a3m
Tax losses expiring:
Within 10 years
2.3
0.6
7.4
1.8
Available indefinitely
18.1
4.8
46.0
12.0
Capital losses expiring:
Within 10 years
\u2013
\u2013
\u2013
\u2013
Available indefinitely
118.5
29.7
119.2
29.9
Surplus interest expiring:
Within 10 years
0.6
0.1
0.5
0.1
Available indefinitely
\u2013
\u2013
\u2013
\u2013
Other temporary differences:
Within 10 years
56.2
3.5
\u2013
\u2013
Available indefinitely
\u2013
\u2013
\u2013
\u2013
195.7
38.7
173.1
43.8
Deferred tax assets have not been recognised for these temporary differences due to uncertainty over suitable future taxable profits and therefore their ability to be recovered. In assessing the probability of recovery, the Group assesses the likelihood of them being recovered within a reasonably foreseeable time frame, this being typically a minimum of five years, taking into account the future expected profit profile business model of the relevant company and country. The Group also considers the nature of the temporary differences, and any potential legislative restrictions on use. In some instances, these amounts are yet to be accepted by the tax authorities and could be challenged. The majority of these amounts have no expiry date as noted in the table above. It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption. However, \u00a3159.4m (2022: \u00a3112.9m) of those earnings may still result in a tax liability principally as a result of withholding taxes levied by the overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed \u00a39.0m (2022: \u00a36.6m), of which \u00a33.5m (2022: \u00a33.2m) has been provided on the basis that the Group expects to remit these amounts. 21. Trade and other payables 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
Current
Trade payables
152.0
150.4
Social security and other taxation
33.7
35.1
Accruals
42.6
43.9
Deferred income
0.3
\u2013
Progress billings and advance payments from customers
96.8
71.9
Other payables
144.9
136.7
470.3
438.0
Non-current
Other payables
15.3
7.9
485.6
445.9
\u00a350.9m of the \u00a371.9m progress billings and advance payments from customers held at the prior year\u2011end, were recognised as revenue during the year. \u00a352.5m of the \u00a373.2m progress billings and advance payments from customers held at 31 December 2021, were recognised as revenue during the 2022 financial year. Other payables includes costs for services and professional fees invoiced at the balance sheet date.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-388": { "value": "Recognised deferred tax assets and liabilities Deferred taxes record the tax consequences of temporary differences between the accounting and taxation recognition of certain items, as explained below:
Assets
Liabilities
Net
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
13.0
6.2
(67.6)
(76.3)
(54.6)
(70.1)
Inventories
6.4
5.1
(0.8)
(1.7)
5.6
3.4
Revaluation of derivatives
0.5
0.5
(1.1)
(0.8)
(0.6)
(0.3)
Pension and share\u2011based payments
13.5
12.1
\u2013
(7.1)
13.5
5.0
Short term timing differences
29.7
31.1
(5.6)
(5.8)
24.1
25.3
Other tax credits and losses
1.4
1.7
\u2013
\u2013
1.4
1.7
64.5
56.7
(75.1)
(91.7)
(10.6)
(35.0)
Offsetting within tax jurisdictions
(41.8)
(32.5)
41.8
32.5
\u2013
\u2013
Total deferred tax assets and liabilities
22.7
24.2
(33.3)
(59.2)
(10.6)
(35.0)
The movement in the net deferred tax balances has been recognised in the financial statements, as analysed below:
Recognised Recognised
Balance at in the outside the
1 Jan 23 income income Acquisitions/ Balance at
(Restated) statement statement Exchange disposals 31 Dec 23
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(70.1)
13.8
1.7
(54.6)
Inventories
3.4
2.3
(0.1)
5.6
Revaluation of derivatives
(0.3)
(0.3)
(0.6)
Pension and share\u2011based payments
5.0
(0.5)
9.0
13.5
Short\u2011term timing differences
25.3
(0.8)
(0.4)
24.1
Other tax credits and losses
1.7
(0.2)
(0.1)
1.4
Net deferred tax (liability)/asset
(35.0)
14.3
9.0
1.1
\u2013
(10.6)
Recognised
in the Recognised
income outside the Acquisitions/ Balance at
Balance at statement income disposals 31 Dec 22
1 Jan 22 (Restated) statement Exchange (Restated) (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(48.7)
6.0
(4.4)
(23.0)
(70.1)
Inventories
3.3
0.4
0.1
(0.4)
3.4
Revaluation of derivatives
(0.6)
0.3
(0.3)
Pension and share\u2011based payments
(13.9)
(0.2)
18.5
0.6
5.0
Short\u2011term timing differences
25.0
(1.7)
1.6
0.4
25.3
Other tax credits and losses
4.4
(2.8)
0.1
1.7
Net deferred tax (liability)/asset
(30.5)
2.0
18.5
(2.0)
(23.0)
(35.0)
All exchange movements are taken through the translation reserve. Unrecognised deferred tax assets and liabilities Deferred assets are reviewed at each reporting date. Deferred tax assets have not been recognised for the following temporary differences:
2023
2022
Gross Tax Gross Tax
amount effected amount effected
\u00a3m \u00a3m \u00a3m \u00a3m
Tax losses expiring:
Within 10 years
2.3
0.6
7.4
1.8
Available indefinitely
18.1
4.8
46.0
12.0
Capital losses expiring:
Within 10 years
\u2013
\u2013
\u2013
\u2013
Available indefinitely
118.5
29.7
119.2
29.9
Surplus interest expiring:
Within 10 years
0.6
0.1
0.5
0.1
Available indefinitely
\u2013
\u2013
\u2013
\u2013
Other temporary differences:
Within 10 years
56.2
3.5
\u2013
\u2013
Available indefinitely
\u2013
\u2013
\u2013
\u2013
195.7
38.7
173.1
43.8
Deferred tax assets have not been recognised for these temporary differences due to uncertainty over suitable future taxable profits and therefore their ability to be recovered. In assessing the probability of recovery, the Group assesses the likelihood of them being recovered within a reasonably foreseeable time frame, this being typically a minimum of five years, taking into account the future expected profit profile business model of the relevant company and country. The Group also considers the nature of the temporary differences, and any potential legislative restrictions on use. In some instances, these amounts are yet to be accepted by the tax authorities and could be challenged. The majority of these amounts have no expiry date as noted in the table above. It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption. However, \u00a3159.4m (2022: \u00a3112.9m) of those earnings may still result in a tax liability principally as a result of withholding taxes levied by the overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed \u00a39.0m (2022: \u00a36.6m), of which \u00a33.5m (2022: \u00a33.2m) has been provided on the basis that the Group expects to remit these amounts. 16. Trade and other receivables Accounting policy The recoverable amount of the Group\u2019s receivables other than financial assets held at fair value is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration of less than one year are not discounted. Other receivables comprise various assets across the Group, including sales tax receivables and other non\u2011trade balances. The expected credit loss is calculated based on the ageing of individual customers\u2019 receivables, giving consideration to the geographical location in which they operate, historical collectability and the customer\u2019s financial position, where this information is known. Trade and other receivables 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2022
2023 (Restated)
Current \u00a3m \u00a3m
Trade receivables
402.6
367.1
Prepayments
24.6
23.6
Accrued income
11.2
2.3
Other receivables
85.5
90.9
523.9
483.9
Receivables are stated after:
Allowance for impairment
18.0
16.4
Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers, cash and cash equivalents held by the Group\u2019s banks and other financial assets. At the end of 2023 these totalled \u00a3565.8m (2022: \u00a3526.1m). Managing credit risk arising from customers The Group\u2019s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. Our largest single customer accounted for 2% of our 2023 revenues (2022: 2%). Geographically, there is no unusual concentration of credit risk. The Group\u2019s contract approval procedure ensures that large contracts are signed off at executive director level at which time the risk profile of the contract, including potential credit and foreign exchange risks, is reviewed. Credit risk is minimised through due diligence regarding potential customers, appropriate credit limits, cash flow management and the use of documentary credits where appropriate. Exposure to credit risk in respect of trade receivables 2022 results have been restated in the below table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Carrying amount
2022
2023 (Restated)
\u00a3m \u00a3m
UK
17.5
16.7
Germany
28.3
33.0
Rest of Europe
108.1
98.3
USA
77.9
75.7
Asia Pacific
105.8
95.6
Rest of World
65.0
47.8
Total
402.6
367.1
The maximum exposure to credit risk for trade receivables at the reporting date by segment is shown in the table below. 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Carrying amount
2022
2023 (Restated)
\u00a3m \u00a3m
Automation
302.8
249.7
Life Technology
99.8
117.4
Total
402.6
367.1
Impairment provisions for trade receivables The ageing of trade receivables at the reporting date is shown in the following table. 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2023
2022 (Restated)
Gross Impairment Gross Impairment
\u00a3m \u00a3m \u00a3m \u00a3m
Not past due
343.0
(0.1)
315.6
(0.1)
Past due 1\u201130 days
36.2
(0.9)
30.7
(0.9)
Past due 31\u201190 days
14.9
(1.0)
14.4
(0.9)
Past due over 90 days
26.5
(16.0)
22.8
(14.5)
Total
420.6
(18.0)
383.5
(16.4)
The net movement in the allowance for impairment in respect of trade receivables during the year in shown in the below table. 2022 results have been re\u2011presented to correct a typographical error between amounts \u2018utilised during the year\u2019 and \u2018charged to the income statement\u2019:
2022
(Re\u2011
2023 presented)
\u00a3m \u00a3m
Net balance at 1 January
16.4
15.7
Acquisitions
\u2013
(0.4)
Utilised during the year
(0.7)
(0.1)
Charged to the income statement
3.9
2.0
Released
(1.4)
(1.6)
Exchange
(0.2)
0.8
Net balance at 31 December
18.0
16.4
Managing credit risk arising from counterparties A group of relationship banks provides the bulk of the banking services, with preapproved credit limits set for each institution. Financial derivatives are entered into with these core banks and the credit exposure to these instruments is included when considering the credit exposure to the counterparties. At the end of 2023, credit exposure including cash deposited did not exceed \u00a319.0m with any single institution (2022: \u00a316.0m).", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-375": { "value": "Recognised deferred tax assets and liabilities Deferred taxes record the tax consequences of temporary differences between the accounting and taxation recognition of certain items, as explained below:
Assets
Liabilities
Net
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
13.0
6.2
(67.6)
(76.3)
(54.6)
(70.1)
Inventories
6.4
5.1
(0.8)
(1.7)
5.6
3.4
Revaluation of derivatives
0.5
0.5
(1.1)
(0.8)
(0.6)
(0.3)
Pension and share\u2011based payments
13.5
12.1
\u2013
(7.1)
13.5
5.0
Short term timing differences
29.7
31.1
(5.6)
(5.8)
24.1
25.3
Other tax credits and losses
1.4
1.7
\u2013
\u2013
1.4
1.7
64.5
56.7
(75.1)
(91.7)
(10.6)
(35.0)
Offsetting within tax jurisdictions
(41.8)
(32.5)
41.8
32.5
\u2013
\u2013
Total deferred tax assets and liabilities
22.7
24.2
(33.3)
(59.2)
(10.6)
(35.0)
The movement in the net deferred tax balances has been recognised in the financial statements, as analysed below:
Recognised Recognised
Balance at in the outside the
1 Jan 23 income income Acquisitions/ Balance at
(Restated) statement statement Exchange disposals 31 Dec 23
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(70.1)
13.8
1.7
(54.6)
Inventories
3.4
2.3
(0.1)
5.6
Revaluation of derivatives
(0.3)
(0.3)
(0.6)
Pension and share\u2011based payments
5.0
(0.5)
9.0
13.5
Short\u2011term timing differences
25.3
(0.8)
(0.4)
24.1
Other tax credits and losses
1.7
(0.2)
(0.1)
1.4
Net deferred tax (liability)/asset
(35.0)
14.3
9.0
1.1
\u2013
(10.6)
Recognised
in the Recognised
income outside the Acquisitions/ Balance at
Balance at statement income disposals 31 Dec 22
1 Jan 22 (Restated) statement Exchange (Restated) (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(48.7)
6.0
(4.4)
(23.0)
(70.1)
Inventories
3.3
0.4
0.1
(0.4)
3.4
Revaluation of derivatives
(0.6)
0.3
(0.3)
Pension and share\u2011based payments
(13.9)
(0.2)
18.5
0.6
5.0
Short\u2011term timing differences
25.0
(1.7)
1.6
0.4
25.3
Other tax credits and losses
4.4
(2.8)
0.1
1.7
Net deferred tax (liability)/asset
(30.5)
2.0
18.5
(2.0)
(23.0)
(35.0)
All exchange movements are taken through the translation reserve. Unrecognised deferred tax assets and liabilities Deferred assets are reviewed at each reporting date. Deferred tax assets have not been recognised for the following temporary differences:
2023
2022
Gross Tax Gross Tax
amount effected amount effected
\u00a3m \u00a3m \u00a3m \u00a3m
Tax losses expiring:
Within 10 years
2.3
0.6
7.4
1.8
Available indefinitely
18.1
4.8
46.0
12.0
Capital losses expiring:
Within 10 years
\u2013
\u2013
\u2013
\u2013
Available indefinitely
118.5
29.7
119.2
29.9
Surplus interest expiring:
Within 10 years
0.6
0.1
0.5
0.1
Available indefinitely
\u2013
\u2013
\u2013
\u2013
Other temporary differences:
Within 10 years
56.2
3.5
\u2013
\u2013
Available indefinitely
\u2013
\u2013
\u2013
\u2013
195.7
38.7
173.1
43.8
Deferred tax assets have not been recognised for these temporary differences due to uncertainty over suitable future taxable profits and therefore their ability to be recovered. In assessing the probability of recovery, the Group assesses the likelihood of them being recovered within a reasonably foreseeable time frame, this being typically a minimum of five years, taking into account the future expected profit profile business model of the relevant company and country. The Group also considers the nature of the temporary differences, and any potential legislative restrictions on use. In some instances, these amounts are yet to be accepted by the tax authorities and could be challenged. The majority of these amounts have no expiry date as noted in the table above. It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption. However, \u00a3159.4m (2022: \u00a3112.9m) of those earnings may still result in a tax liability principally as a result of withholding taxes levied by the overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed \u00a39.0m (2022: \u00a36.6m), of which \u00a33.5m (2022: \u00a33.2m) has been provided on the basis that the Group expects to remit these amounts. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-350": { "value": "Recognised deferred tax assets and liabilities Deferred taxes record the tax consequences of temporary differences between the accounting and taxation recognition of certain items, as explained below:
Assets
Liabilities
Net
2022 2022 2022
2023 (Restated) 2023 (Restated) 2023 (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
13.0
6.2
(67.6)
(76.3)
(54.6)
(70.1)
Inventories
6.4
5.1
(0.8)
(1.7)
5.6
3.4
Revaluation of derivatives
0.5
0.5
(1.1)
(0.8)
(0.6)
(0.3)
Pension and share\u2011based payments
13.5
12.1
\u2013
(7.1)
13.5
5.0
Short term timing differences
29.7
31.1
(5.6)
(5.8)
24.1
25.3
Other tax credits and losses
1.4
1.7
\u2013
\u2013
1.4
1.7
64.5
56.7
(75.1)
(91.7)
(10.6)
(35.0)
Offsetting within tax jurisdictions
(41.8)
(32.5)
41.8
32.5
\u2013
\u2013
Total deferred tax assets and liabilities
22.7
24.2
(33.3)
(59.2)
(10.6)
(35.0)
The movement in the net deferred tax balances has been recognised in the financial statements, as analysed below:
Recognised Recognised
Balance at in the outside the
1 Jan 23 income income Acquisitions/ Balance at
(Restated) statement statement Exchange disposals 31 Dec 23
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(70.1)
13.8
1.7
(54.6)
Inventories
3.4
2.3
(0.1)
5.6
Revaluation of derivatives
(0.3)
(0.3)
(0.6)
Pension and share\u2011based payments
5.0
(0.5)
9.0
13.5
Short\u2011term timing differences
25.3
(0.8)
(0.4)
24.1
Other tax credits and losses
1.7
(0.2)
(0.1)
1.4
Net deferred tax (liability)/asset
(35.0)
14.3
9.0
1.1
\u2013
(10.6)
Recognised
in the Recognised
income outside the Acquisitions/ Balance at
Balance at statement income disposals 31 Dec 22
1 Jan 22 (Restated) statement Exchange (Restated) (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Intangible and tangible fixed assets
(48.7)
6.0
(4.4)
(23.0)
(70.1)
Inventories
3.3
0.4
0.1
(0.4)
3.4
Revaluation of derivatives
(0.6)
0.3
(0.3)
Pension and share\u2011based payments
(13.9)
(0.2)
18.5
0.6
5.0
Short\u2011term timing differences
25.0
(1.7)
1.6
0.4
25.3
Other tax credits and losses
4.4
(2.8)
0.1
1.7
Net deferred tax (liability)/asset
(30.5)
2.0
18.5
(2.0)
(23.0)
(35.0)
All exchange movements are taken through the translation reserve. Unrecognised deferred tax assets and liabilities Deferred assets are reviewed at each reporting date. Deferred tax assets have not been recognised for the following temporary differences:
2023
2022
Gross Tax Gross Tax
amount effected amount effected
\u00a3m \u00a3m \u00a3m \u00a3m
Tax losses expiring:
Within 10 years
2.3
0.6
7.4
1.8
Available indefinitely
18.1
4.8
46.0
12.0
Capital losses expiring:
Within 10 years
\u2013
\u2013
\u2013
\u2013
Available indefinitely
118.5
29.7
119.2
29.9
Surplus interest expiring:
Within 10 years
0.6
0.1
0.5
0.1
Available indefinitely
\u2013
\u2013
\u2013
\u2013
Other temporary differences:
Within 10 years
56.2
3.5
\u2013
\u2013
Available indefinitely
\u2013
\u2013
\u2013
\u2013
195.7
38.7
173.1
43.8
Deferred tax assets have not been recognised for these temporary differences due to uncertainty over suitable future taxable profits and therefore their ability to be recovered. In assessing the probability of recovery, the Group assesses the likelihood of them being recovered within a reasonably foreseeable time frame, this being typically a minimum of five years, taking into account the future expected profit profile business model of the relevant company and country. The Group also considers the nature of the temporary differences, and any potential legislative restrictions on use. In some instances, these amounts are yet to be accepted by the tax authorities and could be challenged. The majority of these amounts have no expiry date as noted in the table above. It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption. However, \u00a3159.4m (2022: \u00a3112.9m) of those earnings may still result in a tax liability principally as a result of withholding taxes levied by the overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed \u00a39.0m (2022: \u00a36.6m), of which \u00a33.5m (2022: \u00a33.2m) has been provided on the basis that the Group expects to remit these amounts. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-323": { "value": "10. Dividends Accounting policy Dividends are recognised as a liability in the period in which they are approved by shareholders. Dividends After the balance sheet date, the following dividends were proposed by the directors. The dividends have not been provided for and there are no income tax consequences.
2023 2022
\u00a3m \u00a3m
Current year final dividend \u2013 19 .2p per qualifying ordinary share (2022: 17 . 4p)
49.9
45.1
The following dividends were declared and paid by the Group during the year:
2023 2022
\u00a3m \u00a3m
Prior year final dividend paid \u2013 17.4p per qualifying ordinary share (2022 final year dividend: 15.8p)
45.1
40.8
Current year interim dividend paid \u2013 9.1p per qualifying ordinary share (2022: 8.3p)
23.7
21.4
68.8
62.2
Dividend policy and share buy backs As part of the capital management process, the Group ensures that adequate reserves are available in IMI plc in order to meet proposed shareholder dividends, the purchase of shares for employee share scheme incentives and any on\u2011market share buyback programme. The Group does not have a formal dividend policy or pay out ratio. The Group\u2019s aim is to continue with progressive dividends which typically increase at a steady rate for both the interim and final dividend payments. In the event that the Board cannot identify sufficient investment opportunities through capital expenditure, organic growth initiatives and acquisitions, the return of funds to shareholders through share buybacks or special dividends will be considered. It should be noted that a number of shares are regularly bought in the market by an employee benefit trust, in order to hedge the exposure under certain management incentive plans. Details of these purchases are shown in Note 22 to the financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-402": { "value": "Accounting policy Dividends are recognised as a liability in the period in which they are approved by shareholders. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-351": { "value": "0.192", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP/xbrli:shares" } }, "fact-352": { "value": "0.174", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:2138002W9Q21PF751R30", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:GBP/xbrli:shares" } }, "fact-376": { "value": "11. Intangible assets Accounting policy Intangible assets are disclosed as acquired intangible assets and non\u2011acquired intangible assets. Amortisation of acquired intangible assets is treated as an adjusting item, as described in Note 3, as the impact of any acquisitions, which are clearly identifiable, can materially impact the net book value, from period to period. i. Goodwill Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition date fair value of the consideration transferred over the net identifiable amounts of the assets acquired and the liabilities assumed for the business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. The value of the goodwill can arise from a number of sources, but in relation to our more recent acquisitions, it has been represented by post\u2011acquisition synergies and the skills and knowledge of the workforce. ii. Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy \u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin. iii. Software development costs Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation (see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or other non\u2011acquired category of intangible assets depending on their origin. iv. Customer relationships and other acquired intangible assets Customer relationships and other intangible assets that are acquired by the Group as part of a business combination are stated at their fair value calculated by reference to the net present value of future benefits accruing to the Group from utilisation of the asset, discounted at an appropriate discount rate. Expenditure on other internally generated intangible assets is recognised in the income statement as an expense as incurred. v. Amortisation of intangible assets other than goodwill Amortisation is charged to the income statement on a straight\u2011line basis (other than for customer relationships and order book, which are charged on a sum of digits basis) over the estimated useful lives of the intangible assets. Amortisation commences from the date the intangible asset becomes available for use. The estimated useful lives for: \u2013 Capitalised development costs are the life of the intangible asset (usually a maximum of 17 years) \u2013 Software development costs are the life of the intangible asset (up to 17 years) \u2013 Customer relationships are the life of the intangible asset (up to 17 years) \u2013 Other intangible assets (including order books, brands and software) are the life of the intangible asset (up to 10 years) The Group splits its intangible assets between those arising on acquisitions and those which do not, because the amortisation of acquired intangibles is recognised as an adjusting item in the income statement. Analysis of intangible assets 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as discussed in Note 1.
Non-
Acquired Other Other acquired Other
customer acquired non- intangibles intangible
Goodwill relationships intangibles acquired under assets
(Restated) (Restated) (Restated) intangibles* construction (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Cost
As at 1 January 2022
569.6
283.9
185.0
172.2
8.9
650.0
Exchange adjustments
48.3
21.2
22.3
12.7
(0.7)
55.5
Acquisitions (Note 23)
117.2
59.7
33.9
93.6
Additions
7.0
7.1
14.1
Transfers from assets in the course of construction
9.3
(9.3)
\u2013
Disposals
(6.0)
(6.0)
As at 31 December 2022
735.1
364.8
241.2
195.2
6.0
807.2
Exchange adjustments
(17.7)
(7.8)
(10.6)
(4.5)
(22.9)
Additions
12.1
7.4
19.5
Transfers from assets in the course of construction
3.8
(3.8)
\u2013
Disposals
(4.0)
(4.0)
As at 31 December 2023
717.4
357.0
230.6
202.6
9.6
799.8
Amortisation
As at 1 January 2022
36.0
204.3
107.2
104.0
415.5
Exchange adjustments
1.7
14.0
11.5
6.8
32.3
Disposals
(6.0)
(6.0)
Impairment charge
0.7
0.7
Amortisation for year
17.2
12.3
18.5
48.0
As at 31 December 2022
37.7
235.5
131.0
124.0
490.5
Exchange adjustments
(0.6)
(5.7)
(5.2)
(2.8)
(13.7)
Disposals
(4.0)
(4.0)
Amortisation for year
21.3
10.7
17.6
49.6
As at 31 December 2023
37.1
251.1
136.5
134.8
522.4
Net book value at 31 December 2022
697.4
129.3
110.2
71.2
6.0
316.7
Net book value at 31 December 2023
680.3
105.9
94.1
67.8
9.6
277.4
* Other non\u2011acquired intangibles include capitalised development costs with a carrying value of \u00a332.0m (2022: \u00a333.1m) and capitalised software costs with a carrying value of \u00a335.8m (2022: \u00a338.1m). The individually significant acquired customer relationships includes \u00a342.1m (2022: \u00a350.5m) in Adaptas Solutions LLC, \u00a321.1m (2022: \u00a324.3m) in Bahr Modultechnik GmbH and \u00a324.6m (2022: \u00a328.7m) in Heatmiser UK Limited, which have 12 to 16 years of amortisation remaining. The only individually significant other acquired intangibles is the Adaptas brands, with a net book value of \u00a329.1m (2022: \u00a333.3m), which have 8 to 13 years of amortisation remaining. Goodwill impairment testing Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The Group has 12 (2022: 12) cash\u2011generating units to which goodwill is allocated. The recoverable amount of a CGU is the higher of its fair value less costs to sell and its value in use. Value in use is determined using cash flow projections from financial budgets, forecasts and plans approved by the Board covering a five\u2011year period, and include a terminal value multiple. The projected cash flows reflect the latest expectation of demand for products and services, including consideration of the future impacts of climate change, which is considered as part of the Group\u2019s five\u2011year strategic planning process. The key assumptions in these calculations are the long\u2011term growth rates and the discount rates applied to forecast cash flows, in addition to the achievement of the forecasts themselves. Long\u2011term growth rates are based on long\u2011term economic forecasts for growth in the manufacturing sector in the geographical regions in which the cash\u2011generating unit operates. Pre\u2011tax discount rates specific to each cash\u2011generating unit are calculated by adjusting country and region\u2011specific post\u2011tax weighted average cost of capital (WACC) for specific country risk premium, the Group\u2019s size risk premium and tax rate relevant to the jurisdiction in which the cash flows are generated. This exercise resulted in the use of the following ranges of values for the key assumptions:
2023 2022
% %
Discount rate
8.5-13.3
8.8\u201113.3
Short\u2011term growth rate
8.0-14.0
10.0\u201112.0
Long\u2011term growth rate
1.5-2.1
1.2\u20112.0
For the purpose of assessing the significance of CGUs, the Group uses a threshold of 10% of the total goodwill balance. The recoverable amount of the CGUs is determined from a value in use calculation and the key assumptions used in this calculation are the discount rate, growth rate and operating cash flows. These estimates are determined using the methodology discussed above and for those CGUs considered to be significant, outlined in the table below. 2022 results have been restated to reflect the goodwill allocation of Heatmiser and the structure change, both of which are described in Note 1.
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2023 \u00a3m % % %
CGU
Life Science & Fluid Control
201.4
10.5
8.0
2.0
Process Automation \u2013 Petrochemical & Isolation
115.2
11.8
8.0
2.0
Process Automation \u2013 Control Valves
96.5
13.3
8.0
2.0
Heatmiser
67.6
12.0
14.0
1.5
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2022 \u00a3m % % %
CGU
Life Science & Fluid Control
208.9
10.3
12.0
2.0
Process Automation \u2013 Petrochemical & Isolation
117.4
10.0
10.0
2.0
Process Automation \u2013 Control Valves
99.6
13.3
10.0
2.0
The carrying amount of goodwill allocated to CGUs deemed to be non\u2011significant is \u00a3199.6m (2022: \u00a3272.1m restated). Sensitivity to changes in assumptions The key estimates reflect the combination of assumptions used, including the long\u2011term growth rates and the discount rate applied to forecast cash flows, in addition to the achievement of the forecasts themselves. The directors do not consider that any reasonably possible changes to the key assumptions would cause the carrying amount to exceed the recoverable amount of the CGU. The aggregate amount of goodwill arising from acquisitions prior to 1 January 2004 that had been deducted from the profit and loss reserves and incorporated into the IFRS transitional balance sheet as at 1 January 2004, amounted to \u00a3364m. The cumulative impairment recognised in relation to goodwill is \u00a341m (2022: \u00a341m).", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-353": { "value": "11. Intangible assets Accounting policy Intangible assets are disclosed as acquired intangible assets and non\u2011acquired intangible assets. Amortisation of acquired intangible assets is treated as an adjusting item, as described in Note 3, as the impact of any acquisitions, which are clearly identifiable, can materially impact the net book value, from period to period. i. Goodwill Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition date fair value of the consideration transferred over the net identifiable amounts of the assets acquired and the liabilities assumed for the business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. The value of the goodwill can arise from a number of sources, but in relation to our more recent acquisitions, it has been represented by post\u2011acquisition synergies and the skills and knowledge of the workforce. ii. Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy \u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin. iii. Software development costs Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation (see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or other non\u2011acquired category of intangible assets depending on their origin. iv. Customer relationships and other acquired intangible assets Customer relationships and other intangible assets that are acquired by the Group as part of a business combination are stated at their fair value calculated by reference to the net present value of future benefits accruing to the Group from utilisation of the asset, discounted at an appropriate discount rate. Expenditure on other internally generated intangible assets is recognised in the income statement as an expense as incurred. v. Amortisation of intangible assets other than goodwill Amortisation is charged to the income statement on a straight\u2011line basis (other than for customer relationships and order book, which are charged on a sum of digits basis) over the estimated useful lives of the intangible assets. Amortisation commences from the date the intangible asset becomes available for use. The estimated useful lives for: \u2013 Capitalised development costs are the life of the intangible asset (usually a maximum of 17 years) \u2013 Software development costs are the life of the intangible asset (up to 17 years) \u2013 Customer relationships are the life of the intangible asset (up to 17 years) \u2013 Other intangible assets (including order books, brands and software) are the life of the intangible asset (up to 10 years) The Group splits its intangible assets between those arising on acquisitions and those which do not, because the amortisation of acquired intangibles is recognised as an adjusting item in the income statement. Analysis of intangible assets 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as discussed in Note 1.
Non-
Acquired Other Other acquired Other
customer acquired non- intangibles intangible
Goodwill relationships intangibles acquired under assets
(Restated) (Restated) (Restated) intangibles* construction (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Cost
As at 1 January 2022
569.6
283.9
185.0
172.2
8.9
650.0
Exchange adjustments
48.3
21.2
22.3
12.7
(0.7)
55.5
Acquisitions (Note 23)
117.2
59.7
33.9
93.6
Additions
7.0
7.1
14.1
Transfers from assets in the course of construction
9.3
(9.3)
\u2013
Disposals
(6.0)
(6.0)
As at 31 December 2022
735.1
364.8
241.2
195.2
6.0
807.2
Exchange adjustments
(17.7)
(7.8)
(10.6)
(4.5)
(22.9)
Additions
12.1
7.4
19.5
Transfers from assets in the course of construction
3.8
(3.8)
\u2013
Disposals
(4.0)
(4.0)
As at 31 December 2023
717.4
357.0
230.6
202.6
9.6
799.8
Amortisation
As at 1 January 2022
36.0
204.3
107.2
104.0
415.5
Exchange adjustments
1.7
14.0
11.5
6.8
32.3
Disposals
(6.0)
(6.0)
Impairment charge
0.7
0.7
Amortisation for year
17.2
12.3
18.5
48.0
As at 31 December 2022
37.7
235.5
131.0
124.0
490.5
Exchange adjustments
(0.6)
(5.7)
(5.2)
(2.8)
(13.7)
Disposals
(4.0)
(4.0)
Amortisation for year
21.3
10.7
17.6
49.6
As at 31 December 2023
37.1
251.1
136.5
134.8
522.4
Net book value at 31 December 2022
697.4
129.3
110.2
71.2
6.0
316.7
Net book value at 31 December 2023
680.3
105.9
94.1
67.8
9.6
277.4
* Other non\u2011acquired intangibles include capitalised development costs with a carrying value of \u00a332.0m (2022: \u00a333.1m) and capitalised software costs with a carrying value of \u00a335.8m (2022: \u00a338.1m). The individually significant acquired customer relationships includes \u00a342.1m (2022: \u00a350.5m) in Adaptas Solutions LLC, \u00a321.1m (2022: \u00a324.3m) in Bahr Modultechnik GmbH and \u00a324.6m (2022: \u00a328.7m) in Heatmiser UK Limited, which have 12 to 16 years of amortisation remaining. The only individually significant other acquired intangibles is the Adaptas brands, with a net book value of \u00a329.1m (2022: \u00a333.3m), which have 8 to 13 years of amortisation remaining. Goodwill impairment testing Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The Group has 12 (2022: 12) cash\u2011generating units to which goodwill is allocated. The recoverable amount of a CGU is the higher of its fair value less costs to sell and its value in use. Value in use is determined using cash flow projections from financial budgets, forecasts and plans approved by the Board covering a five\u2011year period, and include a terminal value multiple. The projected cash flows reflect the latest expectation of demand for products and services, including consideration of the future impacts of climate change, which is considered as part of the Group\u2019s five\u2011year strategic planning process. The key assumptions in these calculations are the long\u2011term growth rates and the discount rates applied to forecast cash flows, in addition to the achievement of the forecasts themselves. Long\u2011term growth rates are based on long\u2011term economic forecasts for growth in the manufacturing sector in the geographical regions in which the cash\u2011generating unit operates. Pre\u2011tax discount rates specific to each cash\u2011generating unit are calculated by adjusting country and region\u2011specific post\u2011tax weighted average cost of capital (WACC) for specific country risk premium, the Group\u2019s size risk premium and tax rate relevant to the jurisdiction in which the cash flows are generated. This exercise resulted in the use of the following ranges of values for the key assumptions:
2023 2022
% %
Discount rate
8.5-13.3
8.8\u201113.3
Short\u2011term growth rate
8.0-14.0
10.0\u201112.0
Long\u2011term growth rate
1.5-2.1
1.2\u20112.0
For the purpose of assessing the significance of CGUs, the Group uses a threshold of 10% of the total goodwill balance. The recoverable amount of the CGUs is determined from a value in use calculation and the key assumptions used in this calculation are the discount rate, growth rate and operating cash flows. These estimates are determined using the methodology discussed above and for those CGUs considered to be significant, outlined in the table below. 2022 results have been restated to reflect the goodwill allocation of Heatmiser and the structure change, both of which are described in Note 1.
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2023 \u00a3m % % %
CGU
Life Science & Fluid Control
201.4
10.5
8.0
2.0
Process Automation \u2013 Petrochemical & Isolation
115.2
11.8
8.0
2.0
Process Automation \u2013 Control Valves
96.5
13.3
8.0
2.0
Heatmiser
67.6
12.0
14.0
1.5
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2022 \u00a3m % % %
CGU
Life Science & Fluid Control
208.9
10.3
12.0
2.0
Process Automation \u2013 Petrochemical & Isolation
117.4
10.0
10.0
2.0
Process Automation \u2013 Control Valves
99.6
13.3
10.0
2.0
The carrying amount of goodwill allocated to CGUs deemed to be non\u2011significant is \u00a3199.6m (2022: \u00a3272.1m restated). Sensitivity to changes in assumptions The key estimates reflect the combination of assumptions used, including the long\u2011term growth rates and the discount rate applied to forecast cash flows, in addition to the achievement of the forecasts themselves. The directors do not consider that any reasonably possible changes to the key assumptions would cause the carrying amount to exceed the recoverable amount of the CGU. The aggregate amount of goodwill arising from acquisitions prior to 1 January 2004 that had been deducted from the profit and loss reserves and incorporated into the IFRS transitional balance sheet as at 1 January 2004, amounted to \u00a3364m. The cumulative impairment recognised in relation to goodwill is \u00a341m (2022: \u00a341m).", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-324": { "value": "11. Intangible assets Accounting policy Intangible assets are disclosed as acquired intangible assets and non\u2011acquired intangible assets. Amortisation of acquired intangible assets is treated as an adjusting item, as described in Note 3, as the impact of any acquisitions, which are clearly identifiable, can materially impact the net book value, from period to period. i. Goodwill Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition date fair value of the consideration transferred over the net identifiable amounts of the assets acquired and the liabilities assumed for the business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. The value of the goodwill can arise from a number of sources, but in relation to our more recent acquisitions, it has been represented by post\u2011acquisition synergies and the skills and knowledge of the workforce. ii. Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy \u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin. iii. Software development costs Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation (see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or other non\u2011acquired category of intangible assets depending on their origin. iv. Customer relationships and other acquired intangible assets Customer relationships and other intangible assets that are acquired by the Group as part of a business combination are stated at their fair value calculated by reference to the net present value of future benefits accruing to the Group from utilisation of the asset, discounted at an appropriate discount rate. Expenditure on other internally generated intangible assets is recognised in the income statement as an expense as incurred. v. Amortisation of intangible assets other than goodwill Amortisation is charged to the income statement on a straight\u2011line basis (other than for customer relationships and order book, which are charged on a sum of digits basis) over the estimated useful lives of the intangible assets. Amortisation commences from the date the intangible asset becomes available for use. The estimated useful lives for: \u2013 Capitalised development costs are the life of the intangible asset (usually a maximum of 17 years) \u2013 Software development costs are the life of the intangible asset (up to 17 years) \u2013 Customer relationships are the life of the intangible asset (up to 17 years) \u2013 Other intangible assets (including order books, brands and software) are the life of the intangible asset (up to 10 years) The Group splits its intangible assets between those arising on acquisitions and those which do not, because the amortisation of acquired intangibles is recognised as an adjusting item in the income statement.
Analysis of intangible assets
2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as discussed in Note 1.
Non-
Acquired Other Other acquired Other
customer acquired non- intangibles intangible
Goodwill relationships intangibles acquired under assets
(Restated) (Restated) (Restated) intangibles* construction (Restated)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Cost
As at 1 January 2022
569.6
283.9
185.0
172.2
8.9
650.0
Exchange adjustments
48.3
21.2
22.3
12.7
(0.7)
55.5
Acquisitions (Note 23)
117.2
59.7
33.9
93.6
Additions
7.0
7.1
14.1
Transfers from assets in the course of construction
9.3
(9.3)
\u2013
Disposals
(6.0)
(6.0)
As at 31 December 2022
735.1
364.8
241.2
195.2
6.0
807.2
Exchange adjustments
(17.7)
(7.8)
(10.6)
(4.5)
(22.9)
Additions
12.1
7.4
19.5
Transfers from assets in the course of construction
3.8
(3.8)
\u2013
Disposals
(4.0)
(4.0)
As at 31 December 2023
717.4
357.0
230.6
202.6
9.6
799.8
Amortisation
As at 1 January 2022
36.0
204.3
107.2
104.0
415.5
Exchange adjustments
1.7
14.0
11.5
6.8
32.3
Disposals
(6.0)
(6.0)
Impairment charge
0.7
0.7
Amortisation for year
17.2
12.3
18.5
48.0
As at 31 December 2022
37.7
235.5
131.0
124.0
490.5
Exchange adjustments
(0.6)
(5.7)
(5.2)
(2.8)
(13.7)
Disposals
(4.0)
(4.0)
Amortisation for year
21.3
10.7
17.6
49.6
As at 31 December 2023
37.1
251.1
136.5
134.8
522.4
Net book value at 31 December 2022
697.4
129.3
110.2
71.2
6.0
316.7
Net book value at 31 December 2023
680.3
105.9
94.1
67.8
9.6
277.4
* Other non\u2011acquired intangibles include capitalised development costs with a carrying value of \u00a332.0m (2022: \u00a333.1m) and capitalised software costs with a carrying value of \u00a335.8m
(2022: \u00a338.1m).
The individually significant acquired customer relationships includes \u00a342.1m (2022: \u00a350.5m) in Adaptas Solutions LLC, \u00a321.1m
(2022: \u00a324.3m) in Bahr Modultechnik GmbH and \u00a324.6m (2022: \u00a328.7m) in Heatmiser UK Limited, which have 12 to 16 years of
amortisation remaining. The only individually significant other acquired intangibles is the Adaptas brands, with a net book value
of \u00a329.1m (2022: \u00a333.3m), which have 8 to 13 years of amortisation remaining.
Goodwill impairment testing Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The Group has 12 (2022: 12) cash\u2011generating units to which goodwill is allocated. The recoverable amount of a CGU is the higher of its fair value less costs to sell and its value in use. Value in use is determined using cash flow projections from financial budgets, forecasts and plans approved by the Board covering a five\u2011year period, and include a terminal value multiple. The projected cash flows reflect the latest expectation of demand for products and services, including consideration of the future impacts of climate change, which is considered as part of the Group\u2019s five\u2011year strategic planning process. The key assumptions in these calculations are the long\u2011term growth rates and the discount rates applied to forecast cash flows, in addition to the achievement of the forecasts themselves. Long\u2011term growth rates are based on long\u2011term economic forecasts for growth in the manufacturing sector in the geographical regions in which the cash\u2011generating unit operates. Pre\u2011tax discount rates specific to each cash\u2011generating unit are calculated by adjusting country and region\u2011specific post\u2011tax weighted average cost of capital (WACC) for specific country risk premium, the Group\u2019s size risk premium and tax rate relevant to the jurisdiction in which the cash flows are generated.
This exercise resulted in the use of the following ranges of values for the key assumptions:
2023 2022
% %
Discount rate
8.5-13.3
8.8\u201113.3
Short\u2011term growth rate
8.0-14.0
10.0\u201112.0
Long\u2011term growth rate
1.5-2.1
1.2\u20112.0
For the purpose of assessing the significance of CGUs, the Group uses a threshold of 10% of the total goodwill balance. The recoverable
amount of the CGUs is determined from a value in use calculation and the key assumptions used in this calculation are the discount
rate, growth rate and operating cash flows. These estimates are determined using the methodology discussed above and for those
CGUs considered to be significant, outlined in the table below. 2022 results have been restated to reflect the goodwill allocation of
Heatmiser and the structure change, both of which are described in Note 1.
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2023 \u00a3m % % %
CGU
Life Science & Fluid Control
201.4
10.5
8.0
2.0
Process Automation \u2013 Petrochemical & Isolation
115.2
11.8
8.0
2.0
Process Automation \u2013 Control Valves
96.5
13.3
8.0
2.0
Heatmiser
67.6
12.0
14.0
1.5
Short-term Long-term
Discount growth growth
Goodwill rate rate rate
2022 \u00a3m % % %
CGU
Life Science & Fluid Control
208.9
10.3
12.0
2.0
Process Automation \u2013 Petrochemical & Isolation
117.4
10.0
10.0
2.0
Process Automation \u2013 Control Valves
99.6
13.3
10.0
2.0
The carrying amount of goodwill allocated to CGUs deemed to be non\u2011significant is \u00a3199.6m (2022: \u00a3272.1m restated).
Sensitivity to changes in assumptions
The key estimates reflect the combination of assumptions used, including the long\u2011term growth rates and the discount rate applied
to forecast cash flows, in addition to the achievement of the forecasts themselves.
The directors do not consider that any reasonably possible changes to the key assumptions would cause the carrying amount to exceed
the recoverable amount of the CGU.
The aggregate amount of goodwill arising from acquisitions prior to 1 January 2004 that had been deducted from the profit and loss
reserves and incorporated into the IFRS transitional balance sheet as at 1 January 2004, amounted to \u00a3364m. The cumulative
impairment recognised in relation to goodwill is \u00a341m (2022: \u00a341m).
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-403": { "value": "Accounting policy Intangible assets are disclosed as acquired intangible assets and non\u2011acquired intangible assets. Amortisation of acquired intangible assets is treated as an adjusting item, as described in Note 3, as the impact of any acquisitions, which are clearly identifiable, can materially impact the net book value, from period to period. i. Goodwill Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition date fair value of the consideration transferred over the net identifiable amounts of the assets acquired and the liabilities assumed for the business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. The value of the goodwill can arise from a number of sources, but in relation to our more recent acquisitions, it has been represented by post\u2011acquisition synergies and the skills and knowledge of the workforce. ii. Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy \u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin. iii. Software development costs Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation (see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or other non\u2011acquired category of intangible assets depending on their origin. iv. Customer relationships and other acquired intangible assets Customer relationships and other intangible assets that are acquired by the Group as part of a business combination are stated at their fair value calculated by reference to the net present value of future benefits accruing to the Group from utilisation of the asset, discounted at an appropriate discount rate. Expenditure on other internally generated intangible assets is recognised in the income statement as an expense as incurred. v. Amortisation of intangible assets other than goodwill Amortisation is charged to the income statement on a straight\u2011line basis (other than for customer relationships and order book, which are charged on a sum of digits basis) over the estimated useful lives of the intangible assets. Amortisation commences from the date the intangible asset becomes available for use. The estimated useful lives for: \u2013 Capitalised development costs are the life of the intangible asset (usually a maximum of 17 years) \u2013 Software development costs are the life of the intangible asset (up to 17 years) \u2013 Customer relationships are the life of the intangible asset (up to 17 years) \u2013 Other intangible assets (including order books, brands and software) are the life of the intangible asset (up to 10 years) The Group splits its intangible assets between those arising on acquisitions and those which do not, because the amortisation of acquired intangibles is recognised as an adjusting item in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-419": { "value": "i. Goodwill Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition date fair value of the consideration transferred over the net identifiable amounts of the assets acquired and the liabilities assumed for the business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. The value of the goodwill can arise from a number of sources, but in relation to our more recent acquisitions, it has been represented by post\u2011acquisition synergies and the skills and knowledge of the workforce. Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-420": { "value": "ii. Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy \u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin. iii. Software development costs Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation (see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or other non\u2011acquired category of intangible assets depending on their origin. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-414": { "value": "ii. Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised provided benefits are probable, cost can be reliably measured and if, and only if, the product or process is technically and commercially feasible and the Group has sufficient resources and intention to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly attributable overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy \u2018Impairment\u2019) and is included in the other acquired or other non\u2011acquired category of intangible assets depending on its origin. iii. Software development costs Software applications and systems that are not an integral part of their host computer equipment are capitalised on initial recognition as intangible assets at cost. Cost comprises the purchase price plus directly attributable costs incurred on development of the asset to bring it into use. Following initial recognition, software development costs are carried at cost less any accumulated amortisation (see below) and accumulated impairment losses (see accounting policy \u2018Impairment\u2019) and are included in the other acquired or other non\u2011acquired category of intangible assets depending on their origin. iv. Customer relationships and other acquired intangible assets Customer relationships and other intangible assets that are acquired by the Group as part of a business combination are stated at their fair value calculated by reference to the net present value of future benefits accruing to the Group from utilisation of the asset, discounted at an appropriate discount rate. Expenditure on other internally generated intangible assets is recognised in the income statement as an expense as incurred. v. Amortisation of intangible assets other than goodwill Amortisation is charged to the income statement on a straight\u2011line basis (other than for customer relationships and order book, which are charged on a sum of digits basis) over the estimated useful lives of the intangible assets. Amortisation commences from the date the intangible asset becomes available for use. The estimated useful lives for: \u2013 Capitalised development costs are the life of the intangible asset (usually a maximum of 17 years) \u2013 Software development costs are the life of the intangible asset (up to 17 years) \u2013 Customer relationships are the life of the intangible asset (up to 17 years) \u2013 Other intangible assets (including order books, brands and software) are the life of the intangible asset (up to 10 years) The Group splits its intangible assets between those arising on acquisitions and those which do not, because the amortisation of acquired intangibles is recognised as an adjusting item in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-415": { "value": "Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-404": { "value": "Accounting policy For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group\u2019s cash\u2011generating units (or groups of \u2019CGUs\u2019). The composition of CGUs reflects both the way in which cash inflows are generated and the internal reporting structure. Where our businesses operate closely with each other we will continue to review whether they should be treated as a single CGU. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes and shall not be larger than an operating segment before aggregation. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Impairment The carrying values of the Group\u2019s non\u2011financial assets other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether impairment indicators exist. If indicators exist, the recoverable amount of the asset or all assets within its CGU is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its CGU unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. For goodwill and assets that are not yet available for use, the recoverable amount is evaluated at each balance sheet date. The recoverable amount of non\u2011financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, an individual assessment is made of the estimated future cash flows generated for each CGU derived from the Group\u2019s long\u2011term forecasts for the next five years with due consideration to climate related risks. These are discounted to their present value using a pre\u2011tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Management believe that this approach, including the use of the indefinite cash flow projection, is appropriate based upon both historical experience and because it is one of the bases management utilise to evaluate the fair value of investment opportunities. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest cash\u2011generating unit to which the asset belongs. Reversals of impairment Impairments of goodwill are non\u2011reversible. In respect of other assets, an impairment loss is reversed if at the balance sheet date, there are indications that the loss has decreased or no longer exists following a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-325": { "value": "12. Property, plant and equipment This note details the physical assets used by the Group to generate revenues and profits, in addition to those disclosed in Note 13 \u2018Leases\u2019. These assets include manufacturing, distribution and office sites, and equipment used in the manufacture of the Group\u2019s products. The cost of these assets represents the amount initially paid for them. Accounting policy Freehold land and assets in the course of construction are not depreciated. Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 11). Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment. Costs in respect of tooling owned by the Group for clearly identifiable new products are capitalised net of any contribution received from customers and are included in plant and equipment. Depreciation is charged to the income statement, from the date the asset is brought in to use, on a straight\u2011line basis (unless such a basis is not aligned with the anticipated benefit) so as to write down the cost of assets to residual values over the period of their estimated useful lives within the following ranges: \u2013 Freehold buildings \u2013 25 to 50 years \u2013 Plant and equipment \u2013 3 to 20 years The useful lives of assets could be reduced by climate\u2011related matters, for example as a result of physical risks, obsolescence, or legal restrictions. The change in useful lives would have a direct impact on the amount of depreciation or amortisation recognised each year from the date of reassessment. Assets in the course of construction comprise assets that are not currently ready to be brought in to use. Assets under construction are not depreciated. If there has been a technological change or decline in business performance, the directors review the value of the assets to ensure they have not fallen below their depreciated value. If an asset\u2019s value falls below its depreciated value, a one\u2011off impairment charge is made against profit.
Plant and Assets in the
Land and equipment course of
buildings (restated) construction Total
\u00a3m \u00a3m \u00a3m \u00a3m
Cost
As at 1 January 2022
186.7
674.7
26.6
888.0
Exchange adjustments
8.7
43.9
(0.4)
52.2
Acquisitions (Note 23)
2.9
2.0
0.2
5.1
Additions
3.6
23.7
29.9
57.2
Transfers from assets in the course of construction
0.8
24.4
(25.2)
\u2013
Disposals
(4.3)
(32.8)
(0.1)
(37.2)
As at 31 December 2022
198.4
735.9
31.0
965.3
Exchange adjustments
(5.6)
(17.6)
(0.5)
(23.7)
Additions
7.1
27.2
26.1
60.4
Transfers from assets in the course of construction
1.6
19.1
(20.7)
\u2013
Disposals
(1.6)
(35.9)
(0.6)
(38.1)
As at 31 December 2023
199.9
728.7
35.3
963.9
Depreciation
As at 1 January 2022
100.6
519.7
620.3
Exchange adjustments
3.6
35.6
39.2
Disposals
(2.1)
(30.5)
(32.6)
Reversal of impairment
(1.9)
(1.0)
(2.9)
Depreciation
4.7
37.2
41.9
As at 31 December 2022
104.9
561.0
\u2013
665.9
Exchange adjustments
(2.3)
(12.5)
(14.8)
Disposals
(1.2)
(34.9)
(36.1)
Impairment charge
0.2
2.9
3.1
Depreciation
5.2
40.2
45.4
As at 31 December 2023
106.8
556.7
\u2013
663.5
NBV at 31 December 2022
93.5
174.7
31.0
299.2
NBV at 31 December 2023
93.1
172.0
35.3
300.4
An impairment charge of \u00a33.1m was recognised during the year (2022: reversal of impairment of \u00a32.9m) as part of the restructuring
costs incurred in the complexity reduction program. The recoverable amount of these assets has been determined using their fair value
less costs to sell, estimated by both internal and external valuation specialists. Group contracts in respect of future capital expenditure
that had been placed at the balance sheet date amounted to \u00a33.1m (2022: \u00a33.7m).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-416": { "value": "Accounting policy Freehold land and assets in the course of construction are not depreciated. Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 11). Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment. Costs in respect of tooling owned by the Group for clearly identifiable new products are capitalised net of any contribution received from customers and are included in plant and equipment. Depreciation is charged to the income statement, from the date the asset is brought in to use, on a straight\u2011line basis (unless such a basis is not aligned with the anticipated benefit) so as to write down the cost of assets to residual values over the period of their estimated useful lives within the following ranges: \u2013 Freehold buildings \u2013 25 to 50 years \u2013 Plant and equipment \u2013 3 to 20 years The useful lives of assets could be reduced by climate\u2011related matters, for example as a result of physical risks, obsolescence, or legal restrictions. The change in useful lives would have a direct impact on the amount of depreciation or amortisation recognised each year from the date of reassessment. Assets in the course of construction comprise assets that are not currently ready to be brought in to use. Assets under construction are not depreciated. If there has been a technological change or decline in business performance, the directors review the value of the assets to ensure they have not fallen below their depreciated value. If an asset\u2019s value falls below its depreciated value, a one\u2011off impairment charge is made against profit. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-405": { "value": "Accounting policy Freehold land and assets in the course of construction are not depreciated. Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Note 11). Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment. Costs in respect of tooling owned by the Group for clearly identifiable new products are capitalised net of any contribution received from customers and are included in plant and equipment. Depreciation is charged to the income statement, from the date the asset is brought in to use, on a straight\u2011line basis (unless such a basis is not aligned with the anticipated benefit) so as to write down the cost of assets to residual values over the period of their estimated useful lives within the following ranges: \u2013 Freehold buildings \u2013 25 to 50 years \u2013 Plant and equipment \u2013 3 to 20 years The useful lives of assets could be reduced by climate\u2011related matters, for example as a result of physical risks, obsolescence, or legal restrictions. The change in useful lives would have a direct impact on the amount of depreciation or amortisation recognised each year from the date of reassessment. Assets in the course of construction comprise assets that are not currently ready to be brought in to use. Assets under construction are not depreciated. If there has been a technological change or decline in business performance, the directors review the value of the assets to ensure they have not fallen below their depreciated value. If an asset\u2019s value falls below its depreciated value, a one\u2011off impairment charge is made against profit. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-326": { "value": "13. Leases Accounting policy The Group leases various properties, plant, equipment and cars. Rental contracts are negotiated individually and have a range of initial terms, and may have extension options. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. Leases are recognised as a right\u2011of\u2011use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right\u2011of\u2011use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight\u2011line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of: i. fixed payments less any lease incentives receivable; ii. variable lease payments that are based on an index or a rate; iii. amounts expected to be payable by the Group under residual value guarantees; iv. the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and v. payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the entity\u2019s incremental borrowing rate is used, being the rate that the entity would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Right\u2011of\u2011use assets are measured at cost, comprising: i. the amount of the initial measurement of lease liability; ii. any lease payments made at or before the commencement date less any lease incentives received; and iii. restoration costs. Payments associated with short\u2011term leases and leases of low\u2011value assets are recognised on a straight\u2011line basis as an expense in profit or loss. Short\u2011term leases are leases with a lease term of 12 months or less. Low\u2011value assets comprise IT\u2011equipment and small items of office furniture. Extension and termination options \u2013 Extension and termination options are included in a number of property and equipment leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.
Set out below are the carrying amounts of right\u2011of\u2011use assets recognised and the movements during the period:
Land and Plant and
buildings equipment Total
\u00a3m \u00a3m \u00a3m
As at 1 January 2022
80.9
10.6
91.5
Additions
27.9
7.3
35.2
Acquisitions
\u2013
0.1
0.1
Extensions
8.0
1.0
9.0
Payment changes
1.6
0.2
1.8
Terminations
(0.5)
(0.2)
(0.7)
Impairment
(0.6)
\u2013
(0.6)
Depreciation expense
(25.0)
(7.3)
(32.3)
Exchange
2.5
0.5
3.0
As at 31 December 2022
94.8
12.2
107.0
Additions
12.0
9.0
21.0
Extensions
4.5
1.1
5.6
Payment changes
0.1
(0.2)
(0.1)
Terminations
(1.2)
(0.5)
(1.7)
Impairment
(2.1)
\u2013
(2.1)
Depreciation expense
(21.7)
(7.7)
(29.4)
Exchange
(1.3)
0.6
(0.7)
As at 31 December 2023
85.1
14.5
99.6
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Land and Plant and
buildings equipment Total
\u00a3m \u00a3m \u00a3m
As at 1 January 2022
83.2
10.7
93.9
Additions
23.7
7.3
31.0
Acquisitions
\u2013
0.1
0.1
Extensions
8.1
1.0
9.1
Payment changes
1.7
0.2
1.9
Terminations
(0.5)
(0.2)
(0.7)
Accretion of interest
2.6
0.2
2.8
Payments
(27.2)
(7.9)
(35.1)
Exchange
2.2
0.5
2.7
As at 31 December 2022
93.8
11.9
105.7
Additions
11.9
8.9
20.8
Extensions
4.5
1.0
5.5
Payment changes
(0.8)
0.4
(0.4)
Terminations
(1.2)
(0.5)
(1.7)
Accretion of interest
2.6
0.3
2.9
Payments
(23.6)
(8.3)
(31.9)
Exchange
(0.8)
0.1
(0.7)
As at 31 December 2023
86.4
13.8
100.2
Current
19.4
5.8
25.2
Non-current
67.0
8.0
75.0
The following are the amounts recognised in the income statement:
2023 2022
\u00a3m \u00a3m
Depreciation expense of right\u2011of\u2011use assets
(29.4)
(32.3)
Interest expense on lease liabilities
(2.9)
(2.8)
Total amount recognised in profit or loss
(32.3)
(35.1)
Practical expedients applied
The Group has used the following practical expedients permitted by the standard:
i. the use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
No practical expedient has been applied in relation to short\u2011term leases and low\u2011value assets and is not expected to be used
in subsequent periods.
Future cash outflows that the Group is potentially exposed to in relation to the measurement of lease liabilities that have not
been reflected is \u00a3nil (2022: \u00a3nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-406": { "value": "Accounting policy The Group leases various properties, plant, equipment and cars. Rental contracts are negotiated individually and have a range of initial terms, and may have extension options. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. Leases are recognised as a right\u2011of\u2011use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right\u2011of\u2011use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight\u2011line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of: i. fixed payments less any lease incentives receivable; ii. variable lease payments that are based on an index or a rate; iii. amounts expected to be payable by the Group under residual value guarantees; iv. the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and v. payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the entity\u2019s incremental borrowing rate is used, being the rate that the entity would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Right\u2011of\u2011use assets are measured at cost, comprising: i. the amount of the initial measurement of lease liability; ii. any lease payments made at or before the commencement date less any lease incentives received; and iii. restoration costs. Payments associated with short\u2011term leases and leases of low\u2011value assets are recognised on a straight\u2011line basis as an expense in profit or loss. Short\u2011term leases are leases with a lease term of 12 months or less. Low\u2011value assets comprise IT\u2011equipment and small items of office furniture. Extension and termination options \u2013 Extension and termination options are included in a number of property and equipment leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-354": { "value": "14. Retirement benefits Accounting policy i. Defined contribution (DC) pension plans Arrangements where the employer pays fixed contributions into an external fund on behalf of the employee (who is responsible for making the investment decision and, therefore, assumes the risks and rewards of fund performance). Contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. ii. Defined benefit (DB) pension plans A defined benefit pension plan is a pension arrangement in which the employer promises a specified annual benefit on retirement that is predetermined by a formula based on the employee\u2019s earnings history, tenure of service and age, rather than depending directly on individual investment returns. In some cases, this benefit is paid as a lump sum on leaving the Company or while in the service of the Company, rather than as a pension. The Group underwrites one or more risks in meeting these obligations and therefore any net liability or surplus in these arrangements is shown on the Group balance sheet. The Group\u2019s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets are deducted. Past service costs are recognised in profit or loss on the earlier of the date of the plan amendment or curtailment, and the date that the Group recognises restructuring\u2011 related costs. The discount rate is the yield at the balance sheet date on high\u2011quality corporate bonds of the appropriate currency that have durations approximating those of the Group\u2019s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. At each year\u2011end the Company and the local actuaries consider whether the plans are affected by the asset ceiling requirements. When the calculation results in a net asset to the Group, the recognised asset is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan and restricted by any relevant asset ceiling. Any deduction made by the tax authorities in the event of a refund of a surplus would be regarded by the Group as an income tax. When the benefits of a plan are improved, the expense is recognised immediately in the income statement. Remeasurement gains and losses are recognised immediately in equity and disclosed in the statement of comprehensive income. iii. Long-term service and other post-employment benefits The Group\u2019s net obligation in respect of long\u2011term service and other post\u2011employment benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value, and the fair value of any related assets is deducted. The discount rate is the yield at the balance sheet date on high\u2011quality bonds of the appropriate currency that have durations approximating those of the Group\u2019s obligations. Key source of estimation uncertainty The present value of the Group\u2019s defined benefit pension plans and other post\u2011employment benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, inflation, future salary increases, mortality rates and future pension increases. The assumptions used and analysis of their sensitivity is set out below. Due to the complexity of the valuation and its long\u2011term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. Summary information Net pension deficit: \u00a348.9m (2022: deficit of \u00a318.9m) The assets and liabilities of the defined benefit schemes are aggregated, recognised in the consolidated balance sheet and shown within non\u2011current liabilities or in non\u2011current assets if a scheme is in surplus and it is deemed recoverable. Number of DB arrangements: 70 (2022: 70) There has been no change to the number of schemes during the year. The following table shows a summary of the geographical profile of the Group\u2019s defined benefit schemes:
Net
(deficit)/
Quantity Quantity Assets Liabilities surplus
2023 2022 \u00a3m \u00a3m \u00a3m
Australia
3
3
(0.4)
(0.4)
Austria
6
6
(2.1)
(2.1)
France
3
3
0.2
(0.8)
(0.6)
Germany
30
30
6.4
(42.7)
(36.3)
India
6
6
(1.4)
(1.4)
Italy
6
6
(1.6)
(1.6)
Mexico
5
5
(1.2)
(1.2)
Spain
2
2
\u2013
Switzerland
5
5
89.9
(88.2)
1.7
UAE
1
1
(1.4)
(1.4)
US*
2
2
(1.9)
(1.9)
UK
1
1
304.1
(307.8)
(3.7)
70
70
400.6
(449.5)
(48.9)
* The US deficit above excludes \u00a30.5m of assets relating to unqualified plans classified as investments (see Note 17). As at 31 December 2023, the Group has recognised a net defined benefit deficit of \u00a33.7m (2022: surplus of \u00a328.4m) for the UK Deferred Fund. The Group provides pension benefits through a mixture of funded and unfunded DB and DC arrangements. Assessments of the obligations of the defined benefit plans are carried out by actuaries, based on the projected unit credit method. A historical split of the types of defined benefit schemes in operation is as follows:
% of total % of total
Quantity Assets assets Liabilities liabilities
Type of scheme No. \u00a3m % \u00a3m %
2023
Final salary
*
25
304.3
76.0%
(345.3)
76.8%
Cash balance
12
89.9
22.4%
(90.3)
20.1%
Jubilee Awards
14
\u2013
0%
(2.3)
0.5%
Other
19
6.8
1.6%
(11.6)
2.6%
Total
70
401.0
100%
(449.5)
100%
Asset ceiling
(0.4)
Revised assets
400.6
2022
Final salary
*
25
325.9
79%
(333.6)
78%
Cash balance
12
79.1
19%
(76.3)
18%
Jubilee Awards
14
\u2013
0%
(2.7)
1%
Other
19
7.2
2%
(12.8)
3%
Total
70
412.2
100%
(425.4)
100%
Asset ceiling
(5.7)
Revised assets
406.5
** *** ** *** * Final salary scheme: The pension available to a member in a final salary arrangement will be a proportion of the member\u2019s salary at or around their retirement date. This proportion will be determined by the member\u2019s length of pensionable service, their accrual rate and any particular circumstances under which the member retires (for example early ill\u2011health retirement). ** Cash balance: A cash balance scheme is a form of defined benefit pension under which the member has the right to a defined lump sum on retirement rather than a defined amount of pension receivable. For example, a cash balance plan may have minimum or guaranteed rates of return on pension contributions. The amount of pension to which that lump sum may be converted is determined by the annuity rates prevailing at the time of conversion. *** Jubilee Awards: Jubilee plans provide for cash award payments that are based on completed lengths of service. These payments are often made on cessation of service with the company, subject to a minimum period of service. Asset profile of schemes The following table sets out the profile of the overall assets of the schemes (to give an indication of their risk profile), the comparative amounts of the funded and unfunded defined benefit liabilities (DBOs) and a split of the balance sheet impact between schemes with a net pension surplus and a net pension deficit.
2023 2022
\u00a3m \u00a3m
Quoted equities
27.2
24.7
Quoted bonds
28.1
23.3
Total quoted assets
55.3
48.0
Unquoted equities
28.9
103.3
Insurance policies*
291.7
272.0
Property
20.3
19.5
Other**
4.8
(30.6)
Total unquoted assets
345.7
364.2
Fair value of assets
401.0
412.2
Restriction due to an asset ceiling
(0.4)
(5.7)
DBOs for funded schemes
(403.4)
(378.3)
DBOs for unfunded schemes
(46.1)
(47.1)
Deficit for DBOs
(48.9)
(18.9)
Schemes in net pension deficit
(50.6)
(47.4)
Schemes in net pension surplus
1.7
28.5
* The value of the insurance policies matches the value of the IAS 19 liabilities insured. ** \u2018Other\u2019 assets primarily consists of cash, currency swaps and UK commercial real estate debt. The overseas assets of \u00a396.9m (2022: \u00a386.9m) comprise equities of \u00a327.2m (2022: \u00a324.7m), bonds of \u00a328.1m (2022: \u00a321.0m), insurance of \u00a36.8m (2022: \u00a37.5m), property of \u00a320.2m (2022: \u00a319.5m) and other assets of \u00a314.6m (2022: \u00a314.2m). This excludes the impact of the restriction due to the asset ceiling of \u00a30.4m (2022: \u00a35.7m) associated with schemes in Switzerland and Germany. Funded: The majority of the Group defined benefit and other post\u2011employment benefit arrangements are funded, which means that they are linked to specific plan assets that have been segregated in a trust or foundation. Unfunded: Plans that are not funded are those that are not backed by segregated assets. These include not only some pension plans but also a number of other long\u2011term arrangements for the benefit of our employees, with benefits payable while they are employed by the Group but more than 12 months after the related service is rendered. Actuarial gains and losses on other long\u2011term arrangements are recognised in the income statement in the period in which they arise. Average duration by geography The following table shows the weighted average number of years (or duration) over which pension benefits are expected to be paid.
2023 2022
Location \u00a3m \u00a3m
UK
15.0
15.4
Switzerland
14.2
14.1
US
5.4
5.1
Eurozone
11.3
11.9
The UK Funds The United Kingdom constitutes 68% (2022: 70%) of total defined benefit liabilities and 76% (2022: 80%) of total defined benefit assets. Historically, the IMI Pension Fund offered final salary benefits to UK employees until it closed to new entrants in 2005 and to future accrual on 31 December 2010. In December 2014, winding\u2011up procedures commenced and those members who were not eligible or did not take up the offer of a single cash lump sum transferred to one of two new Funds (the IMI 2014 Pensioner Fund or the IMI 2014 Deferred Fund \u2013 the UK Funds). Ongoing pension benefits in the UK are provided via the trustee\u2019s defined contribution plan \u2013 The IMI Retirement Savings Plan. All UK pension assets are run on behalf of the trustee by the Board of the IMI Common Investment Fund. Court Ruling A High Court legal ruling in June 2023 (Virgin Media Limited v NTL Pension Trustees II Limited) decided that certain rule amendments between 1997 and 2016 for contracted\u2011out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation. If the ruling stands it will form part of case law and will be applied across other pension schemes. The judgement is subject to appeal with a hearing scheduled for 25 June 2024. The lawyers for the IMI 2014 Deferred Fund (the Fund), Squire Patton Boggs, in conjunction with the Fund administrators, Willis Towers Watson Ltd, are currently carrying out a review of the past amending deeds. The risk of potential impact remains and continues to be assessed. Liability management During 2022, the Group completed an insurance buy\u2011in exercise for the remaining uninsured members. The trustees agreed to defer part of the premium owed to the insurance company for this buy\u2011in and the outstanding amount is expected to be paid over the next five years. During the year, a repayment of \u00a35.0m was made. The remaining liability is \u00a315.0m. Contributions The March 2021 Valuation was completed in December 2021 and the Funds\u2019 Actuary certified that no deficit funding contributions would be required over and above the projected investment returns and the scheduled payments, of \u00a37.0m per annum, due from the Scottish Limited Partnerships until the earlier of either full funding of the UK Deferred Fund or 2030. During 2022, the Group ceased contributions to the Scottish Limited Partnership as the UK Deferred Fund was fully funded. The final payment of \u00a33.5m for 2021 was made in February 2022. Specific effect on the financial statements The corresponding entries for increases and decreases in the net pension deficit reported in the balance sheet are reflected as follows: \u2013 Cash flow statement: When the Group makes cash contributions to fund the pension deficit/surplus, they are reflected in the cash flow statement and reduce the net deficit/increase the net surplus \u2013 Income statement: Movements in the overall net pension deficit/surplus are recognised in the income statement when they relate to changes in the overall pension promise, due to either an additional period of service (known as \u2018current service cost\u2019), changes to pension terms in the scheme rules (known as \u2018past service cost\u2019), or closure of all or part of a scheme (known as settlements and curtailments). The interest charge/income on the net deficit/surplus position is also recognised in the income statement \u2013 Other comprehensive income (OCI): Movements in the overall net pension deficit/surplus are recognised through OCI when they relate to changes in actuarial assumptions or the difference (experience gain or loss) between previous assumptions and actual results The table below reconciles the movement in the UK and overseas net defined benefit (obligation)/surplus between 1 January 2023 and 31 December 2023.
UK Overseas Total
\u00a3m \u00a3m \u00a3m
Net defined benefit surplus/(obligation) at 1 January 2023
28.4
(47.3)
(18.9)
Movement recognised in:
Income statement
1.3
(5.5)
(4.2)
OCI
(33.4)
(0.3)
(33.7)
Cash flow statement
\u2013
6.9
6.9
Exchange movements
\u2013
1.0
1.0
Net defined benefit obligation at 31 December 2023
(3.7)
(45.2)
(48.9)
Risks faced by the schemes The main risks that the Group face in respect of the UK Deferred Fund, which makes up 76% of the Group\u2019s liabilities, are:
Risk
Description/mitigation
Interest rate risk
Under IAS 19, the discount rate should be set with reference to the yield on high quality corporate bonds
(typically taken to mean those rated AA) of term appropriate to the duration of the liabilities.
A decrease in corporate bond yields and therefore the resulting discount rate, leads to a higher value
being placed on the pension liabilities.
The trustees\u2019 investment strategy for the UK Deferred Fund includes investing in liability\u2011driven
investments and bonds whose values increase with decreases in interest rates. The trustees have a target
to hedge 100% of interest rate risk. The trustee\u2019s investment managers measure and monitor the hedging
arrangements in place, and the latest performance report shows this target is being met.
Note that the scheme hedges interest rate risk on a scheme funding basis (relative to gilts) whereas AA
corporate bonds are implicit in the IAS 19 discount rate and so there is some mismatching risk to the
Group should yields on gilts and corporate bonds diverge. The Scheme\u2019s exposure to corporate bonds
mitigates this risk to some extent.
Inflation risk
In the UK Deferred Fund, a large proportion of the benefits are linked to inflation. Therefore, an increase
in inflation would lead to higher benefits being paid than expected.
To mitigate this risk, the UK Deferred Fund aims to hedge 100% of the Fund\u2019s liabilities against inflation
risk. The trustee\u2019s investment managers measure and monitor the hedging arrangements in place and
the latest performance report shows this target is being met.
Investment risk
The UK Deferred Fund holds investments in asset classes, such as private equity and property, which
have volatile market values. These assets are expected to provide better returns than Government bonds
over the long\u2011term. However, the short\u2011term volatility can cause additional funding to be required, if a
deficit emerges. As these investments make up around 9% of the total assets, the risk to the Group is
relatively small.
Mortality risk
The majority of the plans\u2019 obligations are to provide benefits for the life of each retired member and
his/her spouse, so increases in life expectancy result in an increase in the plans\u2019 liabilities.
An increase of one year in life expectancy for the UK Deferred Fund would act to increase liabilities
by c.\u00a39.8m.
The Group has an objective to insure benefits as members retire, in order to reduce mortality risk.
2023 2022 2021
years years years
Life expectancy (IMI Pension Fund only)
Current male pensioners
21.0
21.5
21.8
Current female pensioners
23.5
23.9
24.1
Future male pensioners
22.3
22.8
23.1
Future female pensioners
24.9
25.4
25.6
*** *** Life expectancies are based on members with a pension size of \u00a35k\u2011\u00a320k for male members and \u00a31k\u2011\u00a38k for female members. The mortality assumptions used for the UK Funds above reflect its scheme\u2011specific experience, together with an allowance for improvements over time. The experience was reviewed as part of the formal triennial actuarial valuation, carried out as at 31 March 2021. The assumptions used as at 31 December 2023 have been based on the results of this review, with the allowance for improvements over time updated to reflect the latest data available. The table below illustrates how the UK Funds\u2019 net pension surplus would decrease (excluding the impact of inflation rate and interest rate hedging), as at 31 December 2023, in the event of the following reasonable changes in the key assumptions above.
2023 2022
UK \u00a3m \u00a3m
Discount rate 0.1% pa lower
*
5.2
5.0
Inflation\u2011linked pension increases 0.1% pa higher
4.6
4.0
Increase of one year in life expectancy from age 65
9.8
10.0
10% fall in non\u2011bond\u2011like assets
2.9
11.0
** * Due to the volatility of the discount rate year on year, sensitivities using a percentage of 0.1% are shown to provide the users of the accounts with the ability to adjust the sensitivities as they consider necessary. ** Fund assets excluding cash, bonds and insurance policies. The table below shows how the net pension deficit for IMI\u2019s non\u2011UK plans would increase, in the event of the following reasonable changes in the key assumptions above.
2023 2022
Non-UK \u00a3m \u00a3m
Discount rate 0.1% pa lower
1.6
1.4
Salary increases 0.1% higher
0.4
0.3
Increase of one year in life expectancy at age 65
2.9
2.7
In each case, all other assumptions are unchanged. Income statement In accordance with IAS 19, pension costs recorded through the income statement primarily represent the increase in the DBO based on employee service during the year and the interest on the net liability or surplus for DBOs in respect of employee service in previous years. The table below shows the cost reported in the income statement in respect of pension obligations (excluding defined benefit contributions):
2023
2022
Overseas Overseas Overseas Overseas
post non-post post non\u2011post
UK employment employment Total UK employment employment Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Current service cost
3.5
0.5
4.0
4.5
0.8
5.3
Recognition of gains
(0.3)
(0.3)
(0.1)
(0.1)
Pension expense \u2013 operating costs
\u2013
3.5
0.2
3.7
4.5
0.7
5.2
Interest on DBO
14.1
3.6
0.2
17.9
9.2
1.1
0.1
10.4
Interest on assets ceiling
0.1
0.1
\u2013
Interest on assets
(15.4)
(2.1)
(17.5)
(11.5)
(0.4)
(11.9)
Interest (income)/expense \u2013 financing costs
(1.3)
1.6
0.2
0.5
(2.3)
0.7
0.1
(1.5)
Overall reconciliation of changes in the net (liability)/surplus for DBOs
2023
2022
Net Net
defined defined
benefit benefit
Asset (liability)/ Asset asset/
DBO Assets ceiling asset DBO Assets ceiling (liability)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Brought forward at start of year
(425.4)
412.2
(5.7)
(18.9)
(657.2)
719.7
62.5
Income Statement (charges)/credits
Current service cost
(4.0)
(4.0)
(5.3)
(5.3)
Settlements
\u2013
1.2
(1.2)
\u2013
Net interest (cost)/income on net DB
(liability)/asset
(17.9)
17.5
(0.1)
(0.5)
(10.4)
11.9
1.5
Immediate recognition of gains/(losses)
\u2013 other long\u2011term benefits
0.3
0.3
0.1
0.1
Total charged to income statement
(21.6)
17.5
(0.1)
(4.2)
(14.4)
10.7
\u2013
(3.7)
Remeasurements recognised in other
comprehensive income
Actuarial gain/(loss) due to
actuarial experience
4.6
4.6
(3.3)
(3.3)
Actuarial (loss)/gain due to financial
assumption changes
(21.1)
(21.1)
241.6
241.6
Actuarial gain due to demographic
assumption changes
2.9
2.9
2.2
2.2
Return on plan assets* less than
discount rate
(25.5)
(25.5)
(317.8)
(317.8)
Change in asset ceiling
5.4
5.4
(5.4)
(5.4)
Total remeasurements recognised
in other comprehensive income
(13.6)
(25.5)
5.4
(33.7)
240.5
(317.8)
(5.4)
(82.7)
Cash flows in the year
Employer contributions
3.0
3.0
2.9
2.9
Employee contributions
(2.5)
2.5
(2.3)
2.3
\u2013
Benefits paid directly by the Company
3.9
3.9
5.3
5.3
Benefits paid from plan assets
12.4
(12.4)
\u2013
13.6
(13.6)
\u2013
Net cash inflow/(outflow)
13.8
(6.9)
\u2013
6.9
16.6
(8.4)
\u2013
8.2
Other movements
Changes in exchange rates
(2.7)
3.7
1.0
(10.9)
8.0
(0.3)
(3.2)
Total other movements
(2.7)
3.7
\u2013
1.0
(10.9)
8.0
(0.3)
(3.2)
Carried forward at end of year
(449.5)
401.0
(0.4)
(48.9)
(425.4)
412.2
(5.7)
(18.9)
* Net of management costs.", "dimensions": { "concept": "ifrs-full:DisclosureOfDefinedBenefitPlansExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-327": { "value": "14. Retirement benefits Accounting policy i. Defined contribution (DC) pension plans Arrangements where the employer pays fixed contributions into an external fund on behalf of the employee (who is responsible for making the investment decision and, therefore, assumes the risks and rewards of fund performance). Contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. ii. Defined benefit (DB) pension plans A defined benefit pension plan is a pension arrangement in which the employer promises a specified annual benefit on retirement that is predetermined by a formula based on the employee\u2019s earnings history, tenure of service and age, rather than depending directly on individual investment returns. In some cases, this benefit is paid as a lump sum on leaving the Company or while in the service of the Company, rather than as a pension. The Group underwrites one or more risks in meeting these obligations and therefore any net liability or surplus in these arrangements is shown on the Group balance sheet. The Group\u2019s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets are deducted. Past service costs are recognised in profit or loss on the earlier of the date of the plan amendment or curtailment, and the date that the Group recognises restructuring\u2011 related costs. The discount rate is the yield at the balance sheet date on high\u2011quality corporate bonds of the appropriate currency that have durations approximating those of the Group\u2019s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. At each year\u2011end the Company and the local actuaries consider whether the plans are affected by the asset ceiling requirements. When the calculation results in a net asset to the Group, the recognised asset is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan and restricted by any relevant asset ceiling. Any deduction made by the tax authorities in the event of a refund of a surplus would be regarded by the Group as an income tax. When the benefits of a plan are improved, the expense is recognised immediately in the income statement. Remeasurement gains and losses are recognised immediately in equity and disclosed in the statement of comprehensive income. iii. Long-term service and other post-employment benefits The Group\u2019s net obligation in respect of long\u2011term service and other post\u2011employment benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value, and the fair value of any related assets is deducted. The discount rate is the yield at the balance sheet date on high\u2011quality bonds of the appropriate currency that have durations approximating those of the Group\u2019s obligations. Key source of estimation uncertainty The present value of the Group\u2019s defined benefit pension plans and other post\u2011employment benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, inflation, future salary increases, mortality rates and future pension increases. The assumptions used and analysis of their sensitivity is set out below. Due to the complexity of the valuation and its long\u2011term nature, a defined benefit obligation is highly sensitive to changes in these assumptions.
Summary information
Net pension deficit: \u00a348.9m (2022: deficit of \u00a318.9m)
The assets and liabilities of the defined benefit schemes are aggregated, recognised in the consolidated balance sheet and shown
within non\u2011current liabilities or in non\u2011current assets if a scheme is in surplus and it is deemed recoverable.
Number of DB arrangements: 70 (2022: 70)
There has been no change to the number of schemes during the year.
The following table shows a summary of the geographical profile of the Group\u2019s defined benefit schemes:
Net
(deficit)/
Quantity Quantity Assets Liabilities surplus
2023 2022 \u00a3m \u00a3m \u00a3m
Australia
3
3
(0.4)
(0.4)
Austria
6
6
(2.1)
(2.1)
France
3
3
0.2
(0.8)
(0.6)
Germany
30
30
6.4
(42.7)
(36.3)
India
6
6
(1.4)
(1.4)
Italy
6
6
(1.6)
(1.6)
Mexico
5
5
(1.2)
(1.2)
Spain
2
2
\u2013
Switzerland
5
5
89.9
(88.2)
1.7
UAE
1
1
(1.4)
(1.4)
US*
2
2
(1.9)
(1.9)
UK
1
1
304.1
(307.8)
(3.7)
70
70
400.6
(449.5)
(48.9)
* The US deficit above excludes \u00a30.5m of assets relating to unqualified plans classified as investments (see Note 17).
As at 31 December 2023, the Group has recognised a net defined benefit deficit of \u00a33.7m (2022: surplus of \u00a328.4m) for the UK
Deferred Fund.
The Group provides pension benefits through a mixture of funded and unfunded DB and DC arrangements. Assessments of the
obligations of the defined benefit plans are carried out by actuaries, based on the projected unit credit method. A historical split of the
types of defined benefit schemes in operation is as follows:
% of total % of total
Quantity Assets assets Liabilities liabilities
Type of scheme No. \u00a3m % \u00a3m %
2023
Final salary
*
25
304.3
76.0%
(345.3)
76.8%
Cash balance
12
89.9
22.4%
(90.3)
20.1%
Jubilee Awards
14
\u2013
0%
(2.3)
0.5%
Other
19
6.8
1.6%
(11.6)
2.6%
Total
70
401.0
100%
(449.5)
100%
Asset ceiling
(0.4)
Revised assets
400.6
2022
Final salary
*
25
325.9
79%
(333.6)
78%
Cash balance
12
79.1
19%
(76.3)
18%
Jubilee Awards
14
\u2013
0%
(2.7)
1%
Other
19
7.2
2%
(12.8)
3%
Total
70
412.2
100%
(425.4)
100%
Asset ceiling
(5.7)
Revised assets
406.5
**
***
**
***
* Final salary scheme: The pension available to a member in a final salary arrangement will be a proportion of the member\u2019s salary at or around their retirement date. This proportion
will be determined by the member\u2019s length of pensionable service, their accrual rate and any particular circumstances under which the member retires (for example early ill\u2011health
retirement).
** Cash balance: A cash balance scheme is a form of defined benefit pension under which the member has the right to a defined lump sum on retirement rather than a defined amount
of pension receivable. For example, a cash balance plan may have minimum or guaranteed rates of return on pension contributions. The amount of pension to which that lump sum
may be converted is determined by the annuity rates prevailing at the time of conversion.
*** Jubilee Awards: Jubilee plans provide for cash award payments that are based on completed lengths of service. These payments are often made on cessation of service with the
company, subject to a minimum period of service.
Asset profile of schemes
The following table sets out the profile of the overall assets of the schemes (to give an indication of their risk profile), the comparative
amounts of the funded and unfunded defined benefit liabilities (DBOs) and a split of the balance sheet impact between schemes with
a net pension surplus and a net pension deficit.
2023 2022
\u00a3m \u00a3m
Quoted equities
27.2
24.7
Quoted bonds
28.1
23.3
Total quoted assets
55.3
48.0
Unquoted equities
28.9
103.3
Insurance policies*
291.7
272.0
Property
20.3
19.5
Other**
4.8
(30.6)
Total unquoted assets
345.7
364.2
Fair value of assets
401.0
412.2
Restriction due to an asset ceiling
(0.4)
(5.7)
DBOs for funded schemes
(403.4)
(378.3)
DBOs for unfunded schemes
(46.1)
(47.1)
Deficit for DBOs
(48.9)
(18.9)
Schemes in net pension deficit
(50.6)
(47.4)
Schemes in net pension surplus
1.7
28.5
* The value of the insurance policies matches the value of the IAS 19 liabilities insured.
** \u2018Other\u2019 assets primarily consists of cash, currency swaps and UK commercial real estate debt.
The overseas assets of \u00a396.9m (2022: \u00a386.9m) comprise equities of \u00a327.2m (2022: \u00a324.7m), bonds of \u00a328.1m (2022: \u00a321.0m), insurance
of \u00a36.8m (2022: \u00a37.5m), property of \u00a320.2m (2022: \u00a319.5m) and other assets of \u00a314.6m (2022: \u00a314.2m). This excludes the impact of the
restriction due to the asset ceiling of \u00a30.4m (2022: \u00a35.7m) associated with schemes in Switzerland and Germany.
Funded: The majority of the Group defined benefit and other post\u2011employment benefit arrangements are funded, which means that
they are linked to specific plan assets that have been segregated in a trust or foundation.
Unfunded: Plans that are not funded are those that are not backed by segregated assets. These include not only some pension plans but
also a number of other long\u2011term arrangements for the benefit of our employees, with benefits payable while they are employed by the
Group but more than 12 months after the related service is rendered. Actuarial gains and losses on other long\u2011term arrangements are
recognised in the income statement in the period in which they arise.
Average duration by geography
The following table shows the weighted average number of years (or duration) over which pension benefits are expected to be paid.
2023 2022
Location \u00a3m \u00a3m
UK
15.0
15.4
Switzerland
14.2
14.1
US
5.4
5.1
Eurozone
11.3
11.9
The UK Funds
The United Kingdom constitutes 68% (2022: 70%) of total defined benefit liabilities and 76% (2022: 80%) of total defined benefit assets.
Historically, the IMI Pension Fund offered final salary benefits to UK employees until it closed to new entrants in 2005 and to future accrual
on 31 December 2010. In December 2014, winding\u2011up procedures commenced and those members who were not eligible or did not take
up the offer of a single cash lump sum transferred to one of two new Funds (the IMI 2014 Pensioner Fund or the IMI 2014 Deferred Fund
\u2013 the UK Funds). Ongoing pension benefits in the UK are provided via the trustee\u2019s defined contribution plan \u2013 The IMI Retirement Savings
Plan. All UK pension assets are run on behalf of the trustee by the Board of the IMI Common Investment Fund.
Court Ruling
A High Court legal ruling in June 2023 (Virgin Media Limited v NTL Pension Trustees II Limited) decided that certain rule amendments
between 1997 and 2016 for contracted\u2011out defined benefit schemes were invalid if they were not accompanied by the correct actuarial
confirmation. If the ruling stands it will form part of case law and will be applied across other pension schemes. The judgement is
subject to appeal with a hearing scheduled for 25 June 2024.
The lawyers for the IMI 2014 Deferred Fund (the Fund), Squire Patton Boggs, in conjunction with the Fund administrators, Willis
Towers Watson Ltd, are currently carrying out a review of the past amending deeds. The risk of potential impact remains and
continues to be assessed.
Liability management
During 2022, the Group completed an insurance buy\u2011in exercise for the remaining uninsured members. The trustees agreed to defer
part of the premium owed to the insurance company for this buy\u2011in and the outstanding amount is expected to be paid over the next
five years. During the year, a repayment of \u00a35.0m was made. The remaining liability is \u00a315.0m.
Contributions
The March 2021 Valuation was completed in December 2021 and the Funds\u2019 Actuary certified that no deficit funding contributions
would be required over and above the projected investment returns and the scheduled payments, of \u00a37.0m per annum, due from the
Scottish Limited Partnerships until the earlier of either full funding of the UK Deferred Fund or 2030.
During 2022, the Group ceased contributions to the Scottish Limited Partnership as the UK Deferred Fund was fully funded. The final
payment of \u00a33.5m for 2021 was made in February 2022.
Specific effect on the financial statements
The corresponding entries for increases and decreases in the net pension deficit reported in the balance sheet are reflected as follows:
\u2013 Cash flow statement: When the Group makes cash contributions to fund the pension deficit/surplus, they are reflected in the cash
flow statement and reduce the net deficit/increase the net surplus
\u2013 Income statement: Movements in the overall net pension deficit/surplus are recognised in the income statement when they relate
to changes in the overall pension promise, due to either an additional period of service (known as \u2018current service cost\u2019), changes
to pension terms in the scheme rules (known as \u2018past service cost\u2019), or closure of all or part of a scheme (known as settlements
and curtailments). The interest charge/income on the net deficit/surplus position is also recognised in the income statement
\u2013 Other comprehensive income (OCI): Movements in the overall net pension deficit/surplus are recognised through OCI when
they relate to changes in actuarial assumptions or the difference (experience gain or loss) between previous assumptions and
actual results
The table below reconciles the movement in the UK and overseas net defined benefit (obligation)/surplus between 1 January 2023
and 31 December 2023.
UK Overseas Total
\u00a3m \u00a3m \u00a3m
Net defined benefit surplus/(obligation) at 1 January 2023
28.4
(47.3)
(18.9)
Movement recognised in:
Income statement
1.3
(5.5)
(4.2)
OCI
(33.4)
(0.3)
(33.7)
Cash flow statement
\u2013
6.9
6.9
Exchange movements
\u2013
1.0
1.0
Net defined benefit obligation at 31 December 2023
(3.7)
(45.2)
(48.9)
Risks faced by the schemes
The main risks that the Group face in respect of the UK Deferred Fund, which makes up 76% of the Group\u2019s liabilities, are:
Risk
Description/mitigation
Interest rate risk
Under IAS 19, the discount rate should be set with reference to the yield on high quality corporate bonds
(typically taken to mean those rated AA) of term appropriate to the duration of the liabilities.
A decrease in corporate bond yields and therefore the resulting discount rate, leads to a higher value
being placed on the pension liabilities.
The trustees\u2019 investment strategy for the UK Deferred Fund includes investing in liability\u2011driven
investments and bonds whose values increase with decreases in interest rates. The trustees have a target
to hedge 100% of interest rate risk. The trustee\u2019s investment managers measure and monitor the hedging
arrangements in place, and the latest performance report shows this target is being met.
Note that the scheme hedges interest rate risk on a scheme funding basis (relative to gilts) whereas AA
corporate bonds are implicit in the IAS 19 discount rate and so there is some mismatching risk to the
Group should yields on gilts and corporate bonds diverge. The Scheme\u2019s exposure to corporate bonds
mitigates this risk to some extent.
Inflation risk
In the UK Deferred Fund, a large proportion of the benefits are linked to inflation. Therefore, an increase
in inflation would lead to higher benefits being paid than expected.
To mitigate this risk, the UK Deferred Fund aims to hedge 100% of the Fund\u2019s liabilities against inflation
risk. The trustee\u2019s investment managers measure and monitor the hedging arrangements in place and
the latest performance report shows this target is being met.
Investment risk
The UK Deferred Fund holds investments in asset classes, such as private equity and property, which
have volatile market values. These assets are expected to provide better returns than Government bonds
over the long\u2011term. However, the short\u2011term volatility can cause additional funding to be required, if a
deficit emerges. As these investments make up around 9% of the total assets, the risk to the Group is
relatively small.
Mortality risk
The majority of the plans\u2019 obligations are to provide benefits for the life of each retired member and
his/her spouse, so increases in life expectancy result in an increase in the plans\u2019 liabilities.
An increase of one year in life expectancy for the UK Deferred Fund would act to increase liabilities
by c.\u00a39.8m.
The Group has an objective to insure benefits as members retire, in order to reduce mortality risk.
Cash flow impacts
2023
2022
UK Overseas Total UK Overseas Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Amounts from employees
\u2013
2.5
2.5
\u2013
2.3
2.3
Amounts from employers
\u2013
3.0
3.0
3.5
2.9
6.4
Benefits and settlements paid directly by the Group
\u2013
3.9
3.9
\u2013
5.3
5.3
Total
\u2013
9.4
9.4
3.5
10.5
14.0
The expected contributions to the DB arrangements in 2024 are \u00a33.0m of normal employer contributions and \u00a32.5m of normal
employee contributions, both in relation to overseas pension funds.
Other comprehensive income
Movements in pension assets and liabilities that arise during the year from changes in actuarial assumptions, or because actual
experience is different from the actuarial assumptions, are recognised in equity via other comprehensive income. These movements
are analysed below:
2023
2022
Overseas Overseas Overseas Overseas
post non-post post non\u2011post
UK employment employment Total UK employment employment Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Change in discount rate
(15.3)
(9.4)
(24.7)
203.9
26.0
229.9
Change in inflation
3.1
0.5
3.6
2.2
9.3
11.5
Change in other assumptions
2.9
\u2013
2.9
2.3
\u2013
2.3
Actuarial experience \u2013 assets/(liabilities)
4.7
(0.1)
4.6
(2.1)
(1.2)
(3.3)
Asset experience
(28.8)
3.3
(25.5)
(309.2)
(8.5)
(317.7)
Actuarial (losses)/gains in the year
(33.4)
(5.7)
(39.1)
(102.9)
25.6
(77.3)
Change in the asset ceiling
5.4
5.4
(5.4)
(5.4)
Exchange gains/(losses)
0.9
0.1
1.0
(2.8)
(0.4)
(3.2)
(Losses)/gains recognised through equity
(33.4)
0.6
0.1
(32.7)
(102.9)
17.4
(0.4)
(85.9)
IMI takes advice from actuaries regarding the appropriateness of the assumptions used to determine the present value of the defined
benefit obligations. These assumptions include the discount rate applied to the assets and liabilities, the life expectancy of the members,
their expected salary and pension increases and inflation. The assumptions used for this purpose in these financial statements are
summarised below:
Weighted averages
2023
2022
2021
UK
*
Overseas
UK
*
Overseas UK Overseas
% pa % pa % pa % pa % pa % pa
Inflation \u2013 RPI
3.3
\u2013
3.4
n/a
3.4
n/a
Inflation \u2013 CPI (pre\u20112030)
2.3
1.5
2.4
1.5
2.4
1.3
Inflation \u2013 CPI (post\u20112030)
3.3
1.5
3.4
1.5
3.4
1.3
Discount rate
4.5
2.4
4.8
3.0
1.9
0.8
Expected salary increases
n/a
1.9
n/a
1.8
n/a
1.7
Rate of pension increases
3.2
0.6
3.3
0.5
3.3
0.7
**
* Assumptions are based on 31 December market conditions and based on the weighted average of various buy\u2011in policy assumptions
** Assumptions are based on 31 December 2021 UK market conditions excluding buy\u2011ins
2023 2022 2021
years years years
Life expectancy (IMI Pension Fund only)
Current male pensioners
21.0
21.5
21.8
Current female pensioners
23.5
23.9
24.1
Future male pensioners
22.3
22.8
23.1
Future female pensioners
24.9
25.4
25.6
***
*** Life expectancies are based on members with a pension size of \u00a35k\u2011\u00a320k for male members and \u00a31k\u2011\u00a38k for female members.
The mortality assumptions used for the UK Funds above reflect its scheme\u2011specific experience, together with an allowance for
improvements over time. The experience was reviewed as part of the formal triennial actuarial valuation, carried out as at 31 March
2021. The assumptions used as at 31 December 2023 have been based on the results of this review, with the allowance for
improvements over time updated to reflect the latest data available.
The table below illustrates how the UK Funds\u2019 net pension surplus would decrease (excluding the impact of inflation rate and interest
rate hedging), as at 31 December 2023, in the event of the following reasonable changes in the key assumptions above.
2023 2022
UK \u00a3m \u00a3m
Discount rate 0.1% pa lower
*
5.2
5.0
Inflation\u2011linked pension increases 0.1% pa higher
4.6
4.0
Increase of one year in life expectancy from age 65
9.8
10.0
10% fall in non\u2011bond\u2011like assets
2.9
11.0
**
* Due to the volatility of the discount rate year on year, sensitivities using a percentage of 0.1% are shown to provide the users of the accounts with the ability to adjust the sensitivities
as they consider necessary.
** Fund assets excluding cash, bonds and insurance policies.
The table below shows how the net pension deficit for IMI\u2019s non\u2011UK plans would increase, in the event of the following reasonable
changes in the key assumptions above.
2023 2022
Non-UK \u00a3m \u00a3m
Discount rate 0.1% pa lower
1.6
1.4
Salary increases 0.1% higher
0.4
0.3
Increase of one year in life expectancy at age 65
2.9
2.7
In each case, all other assumptions are unchanged.
Income statement
In accordance with IAS 19, pension costs recorded through the income statement primarily represent the increase in the DBO based on
employee service during the year and the interest on the net liability or surplus for DBOs in respect of employee service in previous years.
The table below shows the cost reported in the income statement in respect of pension obligations (excluding defined benefit contributions):
2023
2022
Overseas Overseas Overseas Overseas
post non-post post non\u2011post
UK employment employment Total UK employment employment Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Current service cost
3.5
0.5
4.0
4.5
0.8
5.3
Recognition of gains
(0.3)
(0.3)
(0.1)
(0.1)
Pension expense \u2013 operating costs
\u2013
3.5
0.2
3.7
4.5
0.7
5.2
Interest on DBO
14.1
3.6
0.2
17.9
9.2
1.1
0.1
10.4
Interest on assets ceiling
0.1
0.1
\u2013
Interest on assets
(15.4)
(2.1)
(17.5)
(11.5)
(0.4)
(11.9)
Interest (income)/expense \u2013 financing costs
(1.3)
1.6
0.2
0.5
(2.3)
0.7
0.1
(1.5)
Overall reconciliation of changes in the net (liability)/surplus for DBOs
2023
2022
Net Net
defined defined
benefit benefit
Asset (liability)/ Asset asset/
DBO Assets ceiling asset DBO Assets ceiling (liability)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Brought forward at start of year
(425.4)
412.2
(5.7)
(18.9)
(657.2)
719.7
62.5
Income Statement (charges)/credits
Current service cost
(4.0)
(4.0)
(5.3)
(5.3)
Settlements
\u2013
1.2
(1.2)
\u2013
Net interest (cost)/income on net DB
(liability)/asset
(17.9)
17.5
(0.1)
(0.5)
(10.4)
11.9
1.5
Immediate recognition of gains/(losses)
\u2013 other long\u2011term benefits
0.3
0.3
0.1
0.1
Total charged to income statement
(21.6)
17.5
(0.1)
(4.2)
(14.4)
10.7
\u2013
(3.7)
Remeasurements recognised in other
comprehensive income
Actuarial gain/(loss) due to
actuarial experience
4.6
4.6
(3.3)
(3.3)
Actuarial (loss)/gain due to financial
assumption changes
(21.1)
(21.1)
241.6
241.6
Actuarial gain due to demographic
assumption changes
2.9
2.9
2.2
2.2
Return on plan assets* less than
discount rate
(25.5)
(25.5)
(317.8)
(317.8)
Change in asset ceiling
5.4
5.4
(5.4)
(5.4)
Total remeasurements recognised
in other comprehensive income
(13.6)
(25.5)
5.4
(33.7)
240.5
(317.8)
(5.4)
(82.7)
Cash flows in the year
Employer contributions
3.0
3.0
2.9
2.9
Employee contributions
(2.5)
2.5
(2.3)
2.3
\u2013
Benefits paid directly by the Company
3.9
3.9
5.3
5.3
Benefits paid from plan assets
12.4
(12.4)
\u2013
13.6
(13.6)
\u2013
Net cash inflow/(outflow)
13.8
(6.9)
\u2013
6.9
16.6
(8.4)
\u2013
8.2
Other movements
Changes in exchange rates
(2.7)
3.7
1.0
(10.9)
8.0
(0.3)
(3.2)
Total other movements
(2.7)
3.7
\u2013
1.0
(10.9)
8.0
(0.3)
(3.2)
Carried forward at end of year
(449.5)
401.0
(0.4)
(48.9)
(425.4)
412.2
(5.7)
(18.9)
* Net of management costs.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-407": { "value": "Accounting policy i. Defined contribution (DC) pension plans Arrangements where the employer pays fixed contributions into an external fund on behalf of the employee (who is responsible for making the investment decision and, therefore, assumes the risks and rewards of fund performance). Contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. ii. Defined benefit (DB) pension plans A defined benefit pension plan is a pension arrangement in which the employer promises a specified annual benefit on retirement that is predetermined by a formula based on the employee\u2019s earnings history, tenure of service and age, rather than depending directly on individual investment returns. In some cases, this benefit is paid as a lump sum on leaving the Company or while in the service of the Company, rather than as a pension. The Group underwrites one or more risks in meeting these obligations and therefore any net liability or surplus in these arrangements is shown on the Group balance sheet. The Group\u2019s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets are deducted. Past service costs are recognised in profit or loss on the earlier of the date of the plan amendment or curtailment, and the date that the Group recognises restructuring\u2011 related costs. The discount rate is the yield at the balance sheet date on high\u2011quality corporate bonds of the appropriate currency that have durations approximating those of the Group\u2019s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. At each year\u2011end the Company and the local actuaries consider whether the plans are affected by the asset ceiling requirements. When the calculation results in a net asset to the Group, the recognised asset is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan and restricted by any relevant asset ceiling. Any deduction made by the tax authorities in the event of a refund of a surplus would be regarded by the Group as an income tax. When the benefits of a plan are improved, the expense is recognised immediately in the income statement. Remeasurement gains and losses are recognised immediately in equity and disclosed in the statement of comprehensive income. iii. Long-term service and other post-employment benefits The Group\u2019s net obligation in respect of long\u2011term service and other post\u2011employment benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value, and the fair value of any related assets is deducted. The discount rate is the yield at the balance sheet date on high\u2011quality bonds of the appropriate currency that have durations approximating those of the Group\u2019s obligations. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-377": { "value": "Asset profile of schemes The following table sets out the profile of the overall assets of the schemes (to give an indication of their risk profile), the comparative amounts of the funded and unfunded defined benefit liabilities (DBOs) and a split of the balance sheet impact between schemes with a net pension surplus and a net pension deficit.
2023 2022
\u00a3m \u00a3m
Quoted equities
27.2
24.7
Quoted bonds
28.1
23.3
Total quoted assets
55.3
48.0
Unquoted equities
28.9
103.3
Insurance policies*
291.7
272.0
Property
20.3
19.5
Other**
4.8
(30.6)
Total unquoted assets
345.7
364.2
Fair value of assets
401.0
412.2
Restriction due to an asset ceiling
(0.4)
(5.7)
DBOs for funded schemes
(403.4)
(378.3)
DBOs for unfunded schemes
(46.1)
(47.1)
Deficit for DBOs
(48.9)
(18.9)
Schemes in net pension deficit
(50.6)
(47.4)
Schemes in net pension surplus
1.7
28.5
* The value of the insurance policies matches the value of the IAS 19 liabilities insured. ** \u2018Other\u2019 assets primarily consists of cash, currency swaps and UK commercial real estate debt. The overseas assets of \u00a396.9m (2022: \u00a386.9m) comprise equities of \u00a327.2m (2022: \u00a324.7m), bonds of \u00a328.1m (2022: \u00a321.0m), insurance of \u00a36.8m (2022: \u00a37.5m), property of \u00a320.2m (2022: \u00a319.5m) and other assets of \u00a314.6m (2022: \u00a314.2m). This excludes the impact of the restriction due to the asset ceiling of \u00a30.4m (2022: \u00a35.7m) associated with schemes in Switzerland and Germany. The table below reconciles the movement in the UK and overseas net defined benefit (obligation)/surplus between 1 January 2023 and 31 December 2023.
UK Overseas Total
\u00a3m \u00a3m \u00a3m
Net defined benefit surplus/(obligation) at 1 January 2023
28.4
(47.3)
(18.9)
Movement recognised in:
Income statement
1.3
(5.5)
(4.2)
OCI
(33.4)
(0.3)
(33.7)
Cash flow statement
\u2013
6.9
6.9
Exchange movements
\u2013
1.0
1.0
Net defined benefit obligation at 31 December 2023
(3.7)
(45.2)
(48.9)
Overall reconciliation of changes in the net (liability)/surplus for DBOs
2023
2022
Net Net
defined defined
benefit benefit
Asset (liability)/ Asset asset/
DBO Assets ceiling asset DBO Assets ceiling (liability)
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Brought forward at start of year
(425.4)
412.2
(5.7)
(18.9)
(657.2)
719.7
62.5
Income Statement (charges)/credits
Current service cost
(4.0)
(4.0)
(5.3)
(5.3)
Settlements
\u2013
1.2
(1.2)
\u2013
Net interest (cost)/income on net DB
(liability)/asset
(17.9)
17.5
(0.1)
(0.5)
(10.4)
11.9
1.5
Immediate recognition of gains/(losses)
\u2013 other long\u2011term benefits
0.3
0.3
0.1
0.1
Total charged to income statement
(21.6)
17.5
(0.1)
(4.2)
(14.4)
10.7
\u2013
(3.7)
Remeasurements recognised in other
comprehensive income
Actuarial gain/(loss) due to
actuarial experience
4.6
4.6
(3.3)
(3.3)
Actuarial (loss)/gain due to financial
assumption changes
(21.1)
(21.1)
241.6
241.6
Actuarial gain due to demographic
assumption changes
2.9
2.9
2.2
2.2
Return on plan assets* less than
discount rate
(25.5)
(25.5)
(317.8)
(317.8)
Change in asset ceiling
5.4
5.4
(5.4)
(5.4)
Total remeasurements recognised
in other comprehensive income
(13.6)
(25.5)
5.4
(33.7)
240.5
(317.8)
(5.4)
(82.7)
Cash flows in the year
Employer contributions
3.0
3.0
2.9
2.9
Employee contributions
(2.5)
2.5
(2.3)
2.3
\u2013
Benefits paid directly by the Company
3.9
3.9
5.3
5.3
Benefits paid from plan assets
12.4
(12.4)
\u2013
13.6
(13.6)
\u2013
Net cash inflow/(outflow)
13.8
(6.9)
\u2013
6.9
16.6
(8.4)
\u2013
8.2
Other movements
Changes in exchange rates
(2.7)
3.7
1.0
(10.9)
8.0
(0.3)
(3.2)
Total other movements
(2.7)
3.7
\u2013
1.0
(10.9)
8.0
(0.3)
(3.2)
Carried forward at end of year
(449.5)
401.0
(0.4)
(48.9)
(425.4)
412.2
(5.7)
(18.9)
* Net of management costs.", "dimensions": { "concept": "ifrs-full:DisclosureOfNetDefinedBenefitLiabilityAssetExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-328": { "value": "15. Inventories Accounting policy Inventories are valued at the lower of cost and net realisable value. Due to the varying nature of the Group\u2019s operations, both first in, first out and weighted average methodologies are employed. In respect of work in progress and finished goods, cost includes all direct costs of production and the appropriate proportion of production overheads. The Group sells a wide range of highly technical products and whilst they are designed and engineered to a high degree of precision and to customer specifications, there is a risk of products requiring modification, which can lead to excess or obsolete inventory. The amount of inventory provision recognised is disclosed below. 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1. Inventories
2022
2023 (Restated)
\u00a3m \u00a3m
Raw materials and consumables
162.1
164.8
Work in progress
174.4
136.7
Finished goods
100.8
116.2
437.3
417.7
Inventories are stated after:
Allowance for impairment
59.0
52.5
In 2023, the cost of inventories recognised as an expense (being segmental cost of sales) amounted to \u00a31,183.7m (2022: \u00a31,112.1m). In 2023, the write\u2011down of inventories to net realisable value amounted to \u00a30.1m (2022: \u00a30.1m). Write\u2011downs and reversals in both years relate to ongoing assessments of inventory obsolescence, excess inventory holding and inventory resale values across all of the Group\u2019s businesses.", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-408": { "value": "Accounting policy Inventories are valued at the lower of cost and net realisable value. Due to the varying nature of the Group\u2019s operations, both first in, first out and weighted average methodologies are employed. In respect of work in progress and finished goods, cost includes all direct costs of production and the appropriate proportion of production overheads. The Group sells a wide range of highly technical products and whilst they are designed and engineered to a high degree of precision and to customer specifications, there is a risk of products requiring modification, which can lead to excess or obsolete inventory. The amount of inventory provision recognised is disclosed below. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-329": { "value": "16. Trade and other receivables Accounting policy The recoverable amount of the Group\u2019s receivables other than financial assets held at fair value is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration of less than one year are not discounted. Other receivables comprise various assets across the Group, including sales tax receivables and other non\u2011trade balances. The expected credit loss is calculated based on the ageing of individual customers\u2019 receivables, giving consideration to the geographical location in which they operate, historical collectability and the customer\u2019s financial position, where this information is known.
Trade and other receivables
2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described
in Note 1.
2022
2023 (Restated)
Current \u00a3m \u00a3m
Trade receivables
402.6
367.1
Prepayments
24.6
23.6
Accrued income
11.2
2.3
Other receivables
85.5
90.9
523.9
483.9
Receivables are stated after:
Allowance for impairment
18.0
16.4
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group\u2019s receivables from customers, cash and cash equivalents held by the Group\u2019s banks
and other financial assets. At the end of 2023 these totalled \u00a3565.8m (2022: \u00a3526.1m).
Managing credit risk arising from customers
The Group\u2019s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the
Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence
on credit risk. Our largest single customer accounted for 2% of our 2023 revenues (2022: 2%).
Geographically, there is no unusual concentration of credit risk. The Group\u2019s contract approval procedure ensures that large contracts
are signed off at executive director level at which time the risk profile of the contract, including potential credit and foreign exchange
risks, is reviewed. Credit risk is minimised through due diligence regarding potential customers, appropriate credit limits, cash flow
management and the use of documentary credits where appropriate.
Exposure to credit risk in respect of trade receivables
2022 results have been restated in the below table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described
in Note 1.
Carrying amount
2022
2023 (Restated)
\u00a3m \u00a3m
UK
17.5
16.7
Germany
28.3
33.0
Rest of Europe
108.1
98.3
USA
77.9
75.7
Asia Pacific
105.8
95.6
Rest of World
65.0
47.8
Total
402.6
367.1
The maximum exposure to credit risk for trade receivables at the reporting date by segment is shown in the table below. 2022 results
have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Carrying amount
2022
2023 (Restated)
\u00a3m \u00a3m
Automation
302.8
249.7
Life Technology
99.8
117.4
Total
402.6
367.1
Impairment provisions for trade receivables
The ageing of trade receivables at the reporting date is shown in the following table. 2022 results have been restated in the following
table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2023
2022 (Restated)
Gross Impairment Gross Impairment
\u00a3m \u00a3m \u00a3m \u00a3m
Not past due
343.0
(0.1)
315.6
(0.1)
Past due 1\u201130 days
36.2
(0.9)
30.7
(0.9)
Past due 31\u201190 days
14.9
(1.0)
14.4
(0.9)
Past due over 90 days
26.5
(16.0)
22.8
(14.5)
Total
420.6
(18.0)
383.5
(16.4)
The net movement in the allowance for impairment in respect of trade receivables during the year in shown in the below table.
2022 results have been re\u2011presented to correct a typographical error between amounts \u2018utilised during the year\u2019 and \u2018charged to the
income statement\u2019:
2022
(Re\u2011
2023 presented)
\u00a3m \u00a3m
Net balance at 1 January
16.4
15.7
Acquisitions
\u2013
(0.4)
Utilised during the year
(0.7)
(0.1)
Charged to the income statement
3.9
2.0
Released
(1.4)
(1.6)
Exchange
(0.2)
0.8
Net balance at 31 December
18.0
16.4
Managing credit risk arising from counterparties
A group of relationship banks provides the bulk of the banking services, with preapproved credit limits set for each institution.
Financial derivatives are entered into with these core banks and the credit exposure to these instruments is included when considering
the credit exposure to the counterparties. At the end of 2023, credit exposure including cash deposited did not exceed \u00a319.0m with
any single institution (2022: \u00a316.0m).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-409": { "value": "Accounting policy The recoverable amount of the Group\u2019s receivables other than financial assets held at fair value is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration of less than one year are not discounted. Other receivables comprise various assets across the Group, including sales tax receivables and other non\u2011trade balances. The expected credit loss is calculated based on the ageing of individual customers\u2019 receivables, giving consideration to the geographical location in which they operate, historical collectability and the customer\u2019s financial position, where this information is known. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-355": { "value": "
2022
2023 (Restated)
Current \u00a3m \u00a3m
Trade receivables
402.6
367.1
Prepayments
24.6
23.6
Accrued income
11.2
2.3
Other receivables
85.5
90.9
523.9
483.9
Receivables are stated after:
Allowance for impairment
18.0
16.4
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-356": { "value": "Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers, cash and cash equivalents held by the Group\u2019s banks and other financial assets. At the end of 2023 these totalled \u00a3565.8m (2022: \u00a3526.1m). Managing credit risk arising from customers The Group\u2019s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. Our largest single customer accounted for 2% of our 2023 revenues (2022: 2%). Geographically, there is no unusual concentration of credit risk. The Group\u2019s contract approval procedure ensures that large contracts are signed off at executive director level at which time the risk profile of the contract, including potential credit and foreign exchange risks, is reviewed. Credit risk is minimised through due diligence regarding potential customers, appropriate credit limits, cash flow management and the use of documentary credits where appropriate. Exposure to credit risk in respect of trade receivables 2022 results have been restated in the below table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Carrying amount
2022
2023 (Restated)
\u00a3m \u00a3m
UK
17.5
16.7
Germany
28.3
33.0
Rest of Europe
108.1
98.3
USA
77.9
75.7
Asia Pacific
105.8
95.6
Rest of World
65.0
47.8
Total
402.6
367.1
The maximum exposure to credit risk for trade receivables at the reporting date by segment is shown in the table below. 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Carrying amount
2022
2023 (Restated)
\u00a3m \u00a3m
Automation
302.8
249.7
Life Technology
99.8
117.4
Total
402.6
367.1
Impairment provisions for trade receivables The ageing of trade receivables at the reporting date is shown in the following table. 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2023
2022 (Restated)
Gross Impairment Gross Impairment
\u00a3m \u00a3m \u00a3m \u00a3m
Not past due
343.0
(0.1)
315.6
(0.1)
Past due 1\u201130 days
36.2
(0.9)
30.7
(0.9)
Past due 31\u201190 days
14.9
(1.0)
14.4
(0.9)
Past due over 90 days
26.5
(16.0)
22.8
(14.5)
Total
420.6
(18.0)
383.5
(16.4)
The net movement in the allowance for impairment in respect of trade receivables during the year in shown in the below table. 2022 results have been re\u2011presented to correct a typographical error between amounts \u2018utilised during the year\u2019 and \u2018charged to the income statement\u2019:
2022
(Re\u2011
2023 presented)
\u00a3m \u00a3m
Net balance at 1 January
16.4
15.7
Acquisitions
\u2013
(0.4)
Utilised during the year
(0.7)
(0.1)
Charged to the income statement
3.9
2.0
Released
(1.4)
(1.6)
Exchange
(0.2)
0.8
Net balance at 31 December
18.0
16.4
Managing credit risk arising from counterparties A group of relationship banks provides the bulk of the banking services, with preapproved credit limits set for each institution. Financial derivatives are entered into with these core banks and the credit exposure to these instruments is included when considering the credit exposure to the counterparties. At the end of 2023, credit exposure including cash deposited did not exceed \u00a319.0m with any single institution (2022: \u00a316.0m).", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-330": { "value": "
17. Financial assets and liabilities
Financial instruments included in the financial statements are measured at either fair value or amortised cost. The measurement of this
fair value can in some cases be subjective, and can depend on the inputs used in the calculations. The Group generally calculates its
own fair values using comparable observed market prices and a valuation model using the respective and relevant market data for the
instrument being valued.
The table below sets out the Group\u2019s accounting classification of each class of financial assets and liabilities, and their fair values at
31 December 2023 and 31 December 2022. Under IFRS 9, all derivative financial instruments not in a hedge relationship are classified
as derivatives at fair value through the income statement. The Group does not use derivatives for speculative purposes and transacts all
derivatives with suitable investment\u2011grade counterparties. All transactions in derivative financial instruments are undertaken to manage
the risks arising from the Group\u2019s business activities. 2022 results have been restated in the following table to reflect the allocation of
goodwill of Heatmiser and CorSolutions, as described in Note 1.
Fair value
Other Financial
Designated derivatives assets At Total
at fair at fair at fair amortised carrying Fair value if
value value
value
*
cost value different
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
106.5
106.5
Bank overdrafts
(66.3)
(66.3)
Borrowings due within one year
(47.2)
(47.2)
Borrowings due after one year
(531.4)
(531.4)
(511.7)
Lease liabilities
(100.2)
(100.2)
Trade and other payables
(485.6)
(485.6)
Trade receivables
402.6
402.6
Investments
1.7
1.7
Other current financial assets/(liabilities)
Derivative assets
12.1
12.1
Derivative liabilities
(3.5)
(7.4)
(10.9)
Total
(3.5)
4.7
108.2
(828.1)
(718.7)
2022
Cash and cash equivalents
133.0
133.0
Bank overdrafts
(93.8)
(93.8)
Borrowings due within one year
(150.1)
(150.1)
Borrowings due after one year
(595.4)
(595.4)
(554.2)
Lease liabilities
(105.7)
(105.7)
Trade and other payables
(445.9)
(445.9)
Trade receivables
367.1
367.1
Investments
2.0
2.0
Other current financial assets/(liabilities)
Derivative assets
15.7
15.7
Derivative liabilities
****
(3.9)
(9.9)
(13.8)
Total
(3.9)
5.8
135.0
(1,023.8)
(886.9)
**
***
****
**
***
* This classification includes items for which the movement in fair value will be recognised in both profit and loss and other comprehensive income.
** Trade and other payables exclude corporation tax and include liabilities of \u00a315.3m (2022: \u00a37.9m restated) falling due after more than one year.
*** Includes \u00a30.3m (2022: \u00a32.6m) falling due after more than one year.
**** Derivative liabilities include liabilities of \u00a30.2m (2022: \u00a30.4m) falling due after more than one year: \u00a30.2m in 1\u20112 years and \u00a3nil in 2\u20113 years (2022: \u00a30.4m in 1\u20112 years and \u00a3nil in
2\u20113 years). Derivative liabilities designated at fair value represent the fair value of unsettled net investment hedge derivatives. The increase in value of net investment hedge derivatives
in the year of \u00a30.4m is shown in the consolidated statement of comprehensive income.
The decrease in other derivative assets and liabilities at fair value of \u00a31.1m is recognised in the income statement and consists of \u00a31.3m
decrease of unsettled net foreign currency and metal forward contracts, which are not designated as hedges for accounting purposes
offset by an increase of \u00a30.2m of forward contracts to be utilised against specific trade receivables and trade payables.
There are no other financial liabilities included within payables disclosed above.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly.
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The following table shows the Group\u2019s financial instruments held at fair value (excluding cash):
Quoted prices
in active
markets for Significant
identical other
assets and observable
liabilities inputs
Level 1 Level 2 Total
\u00a3m \u00a3m \u00a3m
As at 31 December 2023
Financial assets measured at fair value
Equity instruments*
1.7
1.7
Foreign currency forward contracts
12.1
12.1
1.7
12.1
13.8
Financial liabilities measured at fair value
Foreign currency forward contracts
(10.9)
(10.9)
(10.9)
(10.9)
As at 31 December 2022
Financial assets measured at fair value
Equity instruments*
2.0
2.0
Foreign currency forward contracts
15.7
15.7
2.0
15.7
17.7
Financial liabilities measured at fair value
Foreign currency forward contracts
(13.8)
(13.8)
(13.8)
(13.8)
* Equity instruments primarily relate to investments in funds in order to satisfy long\u2011term benefit arrangements.
Valuation techniques for level 2 inputs
Derivative assets and liabilities of \u00a312.1m and \u00a310.9m, respectively, are valued by level 2 techniques. The valuations are derived from
discounted contractual cash flows using observable, and directly relevant, market interest rates and foreign exchange rates from market
data providers.
Valuation techniques for level 3 inputs
At 31 December 2023, the Group held one external investment at fair value using significant unobservable (level 3) inputs. The valuation
is derived using the cash flows of the investment which indicate a fair value of \u00a3nil.
Valuation methodology
Cash and cash equivalents, bank overdrafts, trade payables and trade receivables are carried at their book values as this approximates
to their fair value due to the short\u2011term nature of the instruments.
Long\u2011term and short\u2011term borrowings, apart from any that are subject to hedging arrangements, are carried at amortised cost as it
is the intention that they will not be repaid prior to maturity, where this option exists. The fair values are evaluated by the Group based
on parameters such as interest rates and relevant credit spreads.
Long\u2011term borrowings that are subject to hedging arrangements are valued using appropriate discount rates to value the relevant
hedged cash flows.
Derivative assets and liabilities, including foreign exchange forward contracts, interest rate swaps and metal hedges, are valued using
comparable observed market prices and a valuation model using foreign exchange spot and forward rates, interest rate curves and
forward rate curves for the underlying commodities.
19. Net debt
Net debt is the Group\u2019s key measure used to evaluate total outstanding debt, net of the current cash resources. Some of the Group\u2019s
borrowings (and cash) are held in foreign currencies. Movements in foreign exchange rates affect the Sterling value of the net debt.
Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the
statement of cash flows.
Movement in net debt
2023 2022
\u00a3m \u00a3m
Adjusted EBITDA
*
503.2
457.0
Working capital movements
(31.3)
(85.1)
Capital and development expenditure
(79.9)
(71.3)
Provisions and employee benefit movements
(2.7)
1.5
Principal elements of lease payments
(29.0)
(32.3)
Other
6.0
20.2
Adjusted operating cash flow
366.3
290.0
Adjusting items
(43.1)
(52.6)
Tax paid
(76.1)
(48.6)
Interest
(22.7)
(19.2)
Derivatives
9.8
(8.6)
Additional pension scheme funding
\u2013
(3.5)
Free cash flow before corporate activity
234.2
157.5
Dividends paid to equity shareholders
(68.8)
(62.2)
Acquisition and disposal of subsidiaries
0.5
(213.3)
Net purchase of own shares
0.6
(18.8)
Net cash flow (excluding debt movements)
166.5
(136.8)
**
***
* Adjusted profit after tax \u00a3302.9m before interest \u00a323.2m, tax \u00a384.5m, depreciation \u00a374.8m, amortisation \u00a317.6m and impairment on property, plant and equipment and non\u2011acquired
intangible assets \u00a30.2m.
** Movement in provisions and employee benefits as per the statement of cash flows \u00a30.9m adjusted for the movement in the restructuring provisions \u00a33.6m.
*** Adjusted operating cash flow is the cash generated from the operations shown in the statement of cash flows less cash spent acquiring property, plant and equipment, non\u2011acquired
intangible assets and investments; plus cash received from the sale of property, plant and equipment and the sale of investments, excluding the cash impact of adjusting items.
This measure best reflects the operating cash flows of the Group.
Reconciliation of net cash to movement in net debt
2023 2022
\u00a3m \u00a3m
Net increase in cash and cash equivalents, excluding foreign exchange
17.7
11.0
Less: cash acquired/disposed
0.4
(10.0)
Net repayment/(drawdown) of borrowings excluding foreign exchange and net debt disposed/acquired
148.4
(137.8)
Decrease/(Increase) in net debt before acquisitions, disposals and foreign exchange
166.5
(136.8)
Net (debt)/cash acquired/disposed
(0.4)
10.0
Currency translation differences
1.8
(50.6)
Movement in lease liabilities
5.5
(11.8)
Movement in net debt in the year
173.4
(189.2)
Net debt at the start of the year
(812.0)
(622.8)
Net debt at the end of the year
(638.6)
(812.0)
Reconciliation of adjusted operating cash flow to cash flow statement
2023 2022
\u00a3m \u00a3m
Cash generated from operations
439.3
335.8
Principal lease payments
(29.0)
(32.3)
Settlement of transactional derivatives
(8.8)
2.3
Acquisition of property, plant and equipment and non\u2011acquired intangibles
(79.9)
(71.3)
Adjusting items
43.1
52.6
Proceeds from sale of property, plant and equipment
1.6
2.9
Adjusted operating cash flow
366.3
290.0
Reconciliation of cash and cash equivalents
2023 2022
\u00a3m \u00a3m
Cash and cash equivalents in current assets
106.5
133.0
Bank overdraft in current liabilities
(66.3)
(93.8)
Cash and cash equivalents
40.2
39.2
Analysis of net debt
Borrowings and finance
leases due
Cash and after more
cash within one than one Lease Total
equivalents year year creditors net debt
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
At 1 January 2022
29.1
(127.7)
(430.3)
(93.9)
(622.8)
Lease additions, extensions, terminations and payment changes
(41.4)
(41.4)
Lease payments and interest
32.3
32.3
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/(debt) disposed of/acquired
2.5
(21.1)
(123.1)
(141.7)
Cash/(debt) acquired
10.0
10.0
Settlement of currency derivatives hedging balance sheet
(6.3)
(6.3)
Currency translation differences
3.9
(1.3)
(42.0)
(2.7)
(42.1)
At 31 December 2022
39.2
(150.1)
(595.4)
(105.7)
(812.0)
Lease additions, extensions, terminations and payment changes
(24.2)
(24.2)
Lease payments and interest
29.0
29.0
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/debt disposed of/acquired
3.0
99.2
49.6
151.8
Settlement of currency derivatives hedging balance sheet
1.0
1.0
Currency translation differences
(3.0)
3.7
14.4
0.7
15.8
At 31 December 2023
40.2
(47.2)
(531.4)
(100.2)
(638.6)
Undrawn committed facilities
The Group has various undrawn committed borrowing facilities. The facilities available at 31 December in respect of which all conditions
precedent had been met were as follows:
2023 2022
\u00a3m \u00a3m
Expiring within one year
100.0
\u2013
Expiring between one and two years
75.0
193.5
Expiring after more than two years
125.0
6.0
Total
300.0
199.5
The weighted average life of these facilities is 1.6 years (2022: 0.9 years).
Terms and debt repayment schedule
The terms and conditions of cash and cash equivalents, outstanding loans, lease liabilities and derivative financial liabilities were as follows:
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
Floating
106.5
106.5
106.5
Term loan 2024
Floating
(47.2)
(47.2)
(47.2)
US loan notes 2025
1.39%
(130.4)
(134.0)
(1.8)
(132.2)
US loan notes 2026
3.86%
(98.4)
(109.8)
(3.8)
(3.8)
(102.2)
US loan notes 2027
3.92%
(59.1)
(68.3)
(2.3)
(2.3)
(2.3)
(61.4)
US loan notes 2028
1.53%
(69.6)
(75.1)
(1.1)
(1.1)
(1.1)
(1.1)
(70.7)
US loan notes 2029
3.30%
(87.0)
(104.4)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(89.9)
US loan notes 2030
3.40%
(87.0)
(108.0)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(93.0)
Bank overdrafts
Floating
(66.3)
(66.3)
(66.3)
Lease liabilities
Various
(100.2)
(100.2)
(25.2)
(18.6)
(15.7)
(12.2)
(8.5)
(20.0)
Derivative financial liabilities
(10.9)
(10.9)
(10.7)
(0.2)
Total
(649.6)
(717.7)
(57.8)
(164.1)
(127.2)
(80.6)
(85.1)
(202.9)
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Cash and cash equivalents
Floating
133.0
133.0
133.0
Revolving credit facilities
Floating
(100.5)
(100.5)
(100.5)
Term loan 2023
Floating
(49.6)
(49.6)
(49.6)
Term loan 2024
Floating
(49.6)
(49.6)
(24.8)
(24.8)
US loan notes 2025
1.39%
(132.7)
(138.1)
(1.8)
(1.8)
(134.5)
US loan notes 2026
3.86%
(103.3)
(119.3)
(4.0)
(4.0)
(4.0)
(107.3)
US loan notes 2027
3.92%
(62.0)
(74.0)
(2.4)
(2.4)
(2.4)
(2.4)
(64.4)
US loan notes 2028
1.53%
(70.8)
(77.4)
(1.1)
(1.1)
(1.1)
(1.1)
(1.1)
(71.9)
US loan notes 2029
3.30%
(88.5)
(108.8)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(94.3)
US loan notes 2030
3.40%
(88.5)
(112.5)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(97.5)
Bank overdrafts
Floating
(93.8)
(93.8)
(93.8)
Lease liabilities
Various
(105.7)
(105.7)
(25.8)
(22.1)
(15.8)
(11.8)
(9.9)
(20.3)
Derivative financial liabilities
(13.8)
(13.8)
(13.4)
(0.4)
Total
(825.8)
(910.1)
(190.1)
(62.5)
(163.7)
(128.5)
(81.3)
(284.0)
Contractual cash flows include undiscounted committed interest cash flows and, where the amount payable is not fixed, the amount
disclosed is determined by reference to the conditions existing at the reporting date.
Changes in liabilities arising from financing activities
The table below details changes in the Group\u2019s liabilities arising from financing activities, including both cash and non\u2011cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group\u2019s
consolidated cash flow statement as cash flows from financing activities.
Non-cash changes
31
1 January Financing Acquisition December
2023
cash flows
*
of subsidiary New leases Exchange Other 2023
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Revolving credit facilities
(100.5)
100.1
0.4
\u2013
Term loan 2023 and 2024
(99.2)
48.3
3.7
(47.2)
US loan notes
(545.8)
14.4
(531.4)
Bank overdrafts
(93.8)
27.5
(66.3)
Lease liabilities
(105.7)
31.9
(24.2)
0.7
(2.9)
(100.2)
Total
(945.0)
207.8
(24.2)
19.2
(2.9)
(745.1)
**
Non-cash changes
31
1 January Financing Acquisition December
2022
cash flows
*
of subsidiary New leases Exchange Other 2022
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Revolving credit facilities
(70.3)
(35.0)
4.8
(100.5)
Term loan 2023 and 2024
(133.3)
24.0
10.1
(99.2)
Acquired loan
(1.8)
1.8
\u2013
US loan notes
(352.6)
(221.9)
28.7
(545.8)
Bank overdrafts
(65.5)
(28.3)
(93.8)
Lease liabilities
(93.9)
35.1
(41.4)
(2.7)
(2.8)
(105.7)
Total
(717.4)
(224.3)
\u2013
(41.4)
40.9
(2.8)
(945.0)
**
* Financing cash flows exclude the impact of interest paid.
** Includes IFRS 16 interest payments.
Interest-bearing loans and borrowings
The Group borrows money from financial institutions in the form of bonds and other financial instruments. These generally have
fixed interest rates and are for a fixed term or are drawn from committed borrowing facilities that generally have floating interest rates.
For more information about the Group\u2019s exposure to interest rate and foreign currency risk, see Note 18.
2023 2022
\u00a3m \u00a3m
Current liabilities
Unsecured loan notes and other loans
47.2
150.1
Lease liabilities
25.2
25.8
Total
72.4
175.9
Non-current liabilities
Unsecured loan notes and other loans
531.4
595.4
Lease liabilities
75.0
79.9
Total
606.4
675.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-378": { "value": "17. Financial assets and liabilities Financial instruments included in the financial statements are measured at either fair value or amortised cost. The measurement of this fair value can in some cases be subjective, and can depend on the inputs used in the calculations. The Group generally calculates its own fair values using comparable observed market prices and a valuation model using the respective and relevant market data for the instrument being valued. The table below sets out the Group\u2019s accounting classification of each class of financial assets and liabilities, and their fair values at 31 December 2023 and 31 December 2022. Under IFRS 9, all derivative financial instruments not in a hedge relationship are classified as derivatives at fair value through the income statement. The Group does not use derivatives for speculative purposes and transacts all derivatives with suitable investment\u2011grade counterparties. All transactions in derivative financial instruments are undertaken to manage the risks arising from the Group\u2019s business activities. 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Fair value
Other Financial
Designated derivatives assets At Total
at fair at fair at fair amortised carrying Fair value if
value value
value
*
cost value different
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
106.5
106.5
Bank overdrafts
(66.3)
(66.3)
Borrowings due within one year
(47.2)
(47.2)
Borrowings due after one year
(531.4)
(531.4)
(511.7)
Lease liabilities
(100.2)
(100.2)
Trade and other payables
(485.6)
(485.6)
Trade receivables
402.6
402.6
Investments
1.7
1.7
Other current financial assets/(liabilities)
Derivative assets
12.1
12.1
Derivative liabilities
(3.5)
(7.4)
(10.9)
Total
(3.5)
4.7
108.2
(828.1)
(718.7)
2022
Cash and cash equivalents
133.0
133.0
Bank overdrafts
(93.8)
(93.8)
Borrowings due within one year
(150.1)
(150.1)
Borrowings due after one year
(595.4)
(595.4)
(554.2)
Lease liabilities
(105.7)
(105.7)
Trade and other payables
(445.9)
(445.9)
Trade receivables
367.1
367.1
Investments
2.0
2.0
Other current financial assets/(liabilities)
Derivative assets
15.7
15.7
Derivative liabilities
****
(3.9)
(9.9)
(13.8)
Total
(3.9)
5.8
135.0
(1,023.8)
(886.9)
** *** **** ** *** * This classification includes items for which the movement in fair value will be recognised in both profit and loss and other comprehensive income. ** Trade and other payables exclude corporation tax and include liabilities of \u00a315.3m (2022: \u00a37.9m restated) falling due after more than one year. *** Includes \u00a30.3m (2022: \u00a32.6m) falling due after more than one year. **** Derivative liabilities include liabilities of \u00a30.2m (2022: \u00a30.4m) falling due after more than one year: \u00a30.2m in 1\u20112 years and \u00a3nil in 2\u20113 years (2022: \u00a30.4m in 1\u20112 years and \u00a3nil in 2\u20113 years). Derivative liabilities designated at fair value represent the fair value of unsettled net investment hedge derivatives. The increase in value of net investment hedge derivatives in the year of \u00a30.4m is shown in the consolidated statement of comprehensive income. The decrease in other derivative assets and liabilities at fair value of \u00a31.1m is recognised in the income statement and consists of \u00a31.3m decrease of unsettled net foreign currency and metal forward contracts, which are not designated as hedges for accounting purposes offset by an increase of \u00a30.2m of forward contracts to be utilised against specific trade receivables and trade payables. There are no other financial liabilities included within payables disclosed above. Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table shows the Group\u2019s financial instruments held at fair value (excluding cash):
Quoted prices
in active
markets for Significant
identical other
assets and observable
liabilities inputs
Level 1 Level 2 Total
\u00a3m \u00a3m \u00a3m
As at 31 December 2023
Financial assets measured at fair value
Equity instruments*
1.7
1.7
Foreign currency forward contracts
12.1
12.1
1.7
12.1
13.8
Financial liabilities measured at fair value
Foreign currency forward contracts
(10.9)
(10.9)
(10.9)
(10.9)
As at 31 December 2022
Financial assets measured at fair value
Equity instruments*
2.0
2.0
Foreign currency forward contracts
15.7
15.7
2.0
15.7
17.7
Financial liabilities measured at fair value
Foreign currency forward contracts
(13.8)
(13.8)
(13.8)
(13.8)
* Equity instruments primarily relate to investments in funds in order to satisfy long\u2011term benefit arrangements. Valuation techniques for level 2 inputs Derivative assets and liabilities of \u00a312.1m and \u00a310.9m, respectively, are valued by level 2 techniques. The valuations are derived from discounted contractual cash flows using observable, and directly relevant, market interest rates and foreign exchange rates from market data providers. Valuation techniques for level 3 inputs At 31 December 2023, the Group held one external investment at fair value using significant unobservable (level 3) inputs. The valuation is derived using the cash flows of the investment which indicate a fair value of \u00a3nil. Valuation methodology Cash and cash equivalents, bank overdrafts, trade payables and trade receivables are carried at their book values as this approximates to their fair value due to the short\u2011term nature of the instruments. Long\u2011term and short\u2011term borrowings, apart from any that are subject to hedging arrangements, are carried at amortised cost as it is the intention that they will not be repaid prior to maturity, where this option exists. The fair values are evaluated by the Group based on parameters such as interest rates and relevant credit spreads. Long\u2011term borrowings that are subject to hedging arrangements are valued using appropriate discount rates to value the relevant hedged cash flows. Derivative assets and liabilities, including foreign exchange forward contracts, interest rate swaps and metal hedges, are valued using comparable observed market prices and a valuation model using foreign exchange spot and forward rates, interest rate curves and forward rate curves for the underlying commodities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-357": { "value": "17. Financial assets and liabilities Financial instruments included in the financial statements are measured at either fair value or amortised cost. The measurement of this fair value can in some cases be subjective, and can depend on the inputs used in the calculations. The Group generally calculates its own fair values using comparable observed market prices and a valuation model using the respective and relevant market data for the instrument being valued. The table below sets out the Group\u2019s accounting classification of each class of financial assets and liabilities, and their fair values at 31 December 2023 and 31 December 2022. Under IFRS 9, all derivative financial instruments not in a hedge relationship are classified as derivatives at fair value through the income statement. The Group does not use derivatives for speculative purposes and transacts all derivatives with suitable investment\u2011grade counterparties. All transactions in derivative financial instruments are undertaken to manage the risks arising from the Group\u2019s business activities. 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Fair value
Other Financial
Designated derivatives assets At Total
at fair at fair at fair amortised carrying Fair value if
value value
value
*
cost value different
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
106.5
106.5
Bank overdrafts
(66.3)
(66.3)
Borrowings due within one year
(47.2)
(47.2)
Borrowings due after one year
(531.4)
(531.4)
(511.7)
Lease liabilities
(100.2)
(100.2)
Trade and other payables
(485.6)
(485.6)
Trade receivables
402.6
402.6
Investments
1.7
1.7
Other current financial assets/(liabilities)
Derivative assets
12.1
12.1
Derivative liabilities
(3.5)
(7.4)
(10.9)
Total
(3.5)
4.7
108.2
(828.1)
(718.7)
2022
Cash and cash equivalents
133.0
133.0
Bank overdrafts
(93.8)
(93.8)
Borrowings due within one year
(150.1)
(150.1)
Borrowings due after one year
(595.4)
(595.4)
(554.2)
Lease liabilities
(105.7)
(105.7)
Trade and other payables
(445.9)
(445.9)
Trade receivables
367.1
367.1
Investments
2.0
2.0
Other current financial assets/(liabilities)
Derivative assets
15.7
15.7
Derivative liabilities
****
(3.9)
(9.9)
(13.8)
Total
(3.9)
5.8
135.0
(1,023.8)
(886.9)
** *** **** ** *** * This classification includes items for which the movement in fair value will be recognised in both profit and loss and other comprehensive income. ** Trade and other payables exclude corporation tax and include liabilities of \u00a315.3m (2022: \u00a37.9m restated) falling due after more than one year. *** Includes \u00a30.3m (2022: \u00a32.6m) falling due after more than one year. **** Derivative liabilities include liabilities of \u00a30.2m (2022: \u00a30.4m) falling due after more than one year: \u00a30.2m in 1\u20112 years and \u00a3nil in 2\u20113 years (2022: \u00a30.4m in 1\u20112 years and \u00a3nil in 2\u20113 years). Derivative liabilities designated at fair value represent the fair value of unsettled net investment hedge derivatives. The increase in value of net investment hedge derivatives in the year of \u00a30.4m is shown in the consolidated statement of comprehensive income. The decrease in other derivative assets and liabilities at fair value of \u00a31.1m is recognised in the income statement and consists of \u00a31.3m decrease of unsettled net foreign currency and metal forward contracts, which are not designated as hedges for accounting purposes offset by an increase of \u00a30.2m of forward contracts to be utilised against specific trade receivables and trade payables. There are no other financial liabilities included within payables disclosed above. Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table shows the Group\u2019s financial instruments held at fair value (excluding cash):
Quoted prices
in active
markets for Significant
identical other
assets and observable
liabilities inputs
Level 1 Level 2 Total
\u00a3m \u00a3m \u00a3m
As at 31 December 2023
Financial assets measured at fair value
Equity instruments*
1.7
1.7
Foreign currency forward contracts
12.1
12.1
1.7
12.1
13.8
Financial liabilities measured at fair value
Foreign currency forward contracts
(10.9)
(10.9)
(10.9)
(10.9)
As at 31 December 2022
Financial assets measured at fair value
Equity instruments*
2.0
2.0
Foreign currency forward contracts
15.7
15.7
2.0
15.7
17.7
Financial liabilities measured at fair value
Foreign currency forward contracts
(13.8)
(13.8)
(13.8)
(13.8)
* Equity instruments primarily relate to investments in funds in order to satisfy long\u2011term benefit arrangements. Valuation techniques for level 2 inputs Derivative assets and liabilities of \u00a312.1m and \u00a310.9m, respectively, are valued by level 2 techniques. The valuations are derived from discounted contractual cash flows using observable, and directly relevant, market interest rates and foreign exchange rates from market data providers. Valuation techniques for level 3 inputs At 31 December 2023, the Group held one external investment at fair value using significant unobservable (level 3) inputs. The valuation is derived using the cash flows of the investment which indicate a fair value of \u00a3nil. Valuation methodology Cash and cash equivalents, bank overdrafts, trade payables and trade receivables are carried at their book values as this approximates to their fair value due to the short\u2011term nature of the instruments. Long\u2011term and short\u2011term borrowings, apart from any that are subject to hedging arrangements, are carried at amortised cost as it is the intention that they will not be repaid prior to maturity, where this option exists. The fair values are evaluated by the Group based on parameters such as interest rates and relevant credit spreads. Long\u2011term borrowings that are subject to hedging arrangements are valued using appropriate discount rates to value the relevant hedged cash flows. Derivative assets and liabilities, including foreign exchange forward contracts, interest rate swaps and metal hedges, are valued using comparable observed market prices and a valuation model using foreign exchange spot and forward rates, interest rate curves and forward rate curves for the underlying commodities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-385": { "value": "
Fair value
Other Financial
Designated derivatives assets At Total
at fair at fair at fair amortised carrying Fair value if
value value
value
*
cost value different
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
106.5
106.5
Bank overdrafts
(66.3)
(66.3)
Borrowings due within one year
(47.2)
(47.2)
Borrowings due after one year
(531.4)
(531.4)
(511.7)
Lease liabilities
(100.2)
(100.2)
Trade and other payables
(485.6)
(485.6)
Trade receivables
402.6
402.6
Investments
1.7
1.7
Other current financial assets/(liabilities)
Derivative assets
12.1
12.1
Derivative liabilities
(3.5)
(7.4)
(10.9)
Total
(3.5)
4.7
108.2
(828.1)
(718.7)
2022
Cash and cash equivalents
133.0
133.0
Bank overdrafts
(93.8)
(93.8)
Borrowings due within one year
(150.1)
(150.1)
Borrowings due after one year
(595.4)
(595.4)
(554.2)
Lease liabilities
(105.7)
(105.7)
Trade and other payables
(445.9)
(445.9)
Trade receivables
367.1
367.1
Investments
2.0
2.0
Other current financial assets/(liabilities)
Derivative assets
15.7
15.7
Derivative liabilities
****
(3.9)
(9.9)
(13.8)
Total
(3.9)
5.8
135.0
(1,023.8)
(886.9)
** *** **** ** *** * This classification includes items for which the movement in fair value will be recognised in both profit and loss and other comprehensive income. ** Trade and other payables exclude corporation tax and include liabilities of \u00a315.3m (2022: \u00a37.9m restated) falling due after more than one year. *** Includes \u00a30.3m (2022: \u00a32.6m) falling due after more than one year. **** Derivative liabilities include liabilities of \u00a30.2m (2022: \u00a30.4m) falling due after more than one year: \u00a30.2m in 1\u20112 years and \u00a3nil in 2\u20113 years (2022: \u00a30.4m in 1\u20112 years and \u00a3nil in 2\u20113 years). Derivative liabilities designated at fair value represent the fair value of unsettled net investment hedge derivatives. The increase in value of net investment hedge derivatives in the year of \u00a30.4m is shown in the consolidated statement of comprehensive income. The decrease in other derivative assets and liabilities at fair value of \u00a31.1m is recognised in the income statement and consists of \u00a31.3m decrease of unsettled net foreign currency and metal forward contracts, which are not designated as hedges for accounting purposes offset by an increase of \u00a30.2m of forward contracts to be utilised against specific trade receivables and trade payables. There are no other financial liabilities included within payables disclosed above. Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table shows the Group\u2019s financial instruments held at fair value (excluding cash):
Quoted prices
in active
markets for Significant
identical other
assets and observable
liabilities inputs
Level 1 Level 2 Total
\u00a3m \u00a3m \u00a3m
As at 31 December 2023
Financial assets measured at fair value
Equity instruments*
1.7
1.7
Foreign currency forward contracts
12.1
12.1
1.7
12.1
13.8
Financial liabilities measured at fair value
Foreign currency forward contracts
(10.9)
(10.9)
(10.9)
(10.9)
As at 31 December 2022
Financial assets measured at fair value
Equity instruments*
2.0
2.0
Foreign currency forward contracts
15.7
15.7
2.0
15.7
17.7
Financial liabilities measured at fair value
Foreign currency forward contracts
(13.8)
(13.8)
(13.8)
(13.8)
* Equity instruments primarily relate to investments in funds in order to satisfy long\u2011term benefit arrangements. Valuation techniques for level 2 inputs Derivative assets and liabilities of \u00a312.1m and \u00a310.9m, respectively, are valued by level 2 techniques. The valuations are derived from discounted contractual cash flows using observable, and directly relevant, market interest rates and foreign exchange rates from market data providers. Valuation techniques for level 3 inputs At 31 December 2023, the Group held one external investment at fair value using significant unobservable (level 3) inputs. The valuation is derived using the cash flows of the investment which indicate a fair value of \u00a3nil. Valuation methodology Cash and cash equivalents, bank overdrafts, trade payables and trade receivables are carried at their book values as this approximates to their fair value due to the short\u2011term nature of the instruments. Long\u2011term and short\u2011term borrowings, apart from any that are subject to hedging arrangements, are carried at amortised cost as it is the intention that they will not be repaid prior to maturity, where this option exists. The fair values are evaluated by the Group based on parameters such as interest rates and relevant credit spreads. Long\u2011term borrowings that are subject to hedging arrangements are valued using appropriate discount rates to value the relevant hedged cash flows. Derivative assets and liabilities, including foreign exchange forward contracts, interest rate swaps and metal hedges, are valued using comparable observed market prices and a valuation model using foreign exchange spot and forward rates, interest rate curves and forward rate curves for the underlying commodities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-389": { "value": "
Fair value
Other Financial
Designated derivatives assets At Total
at fair at fair at fair amortised carrying Fair value if
value value
value
*
cost value different
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
106.5
106.5
Bank overdrafts
(66.3)
(66.3)
Borrowings due within one year
(47.2)
(47.2)
Borrowings due after one year
(531.4)
(531.4)
(511.7)
Lease liabilities
(100.2)
(100.2)
Trade and other payables
(485.6)
(485.6)
Trade receivables
402.6
402.6
Investments
1.7
1.7
Other current financial assets/(liabilities)
Derivative assets
12.1
12.1
Derivative liabilities
(3.5)
(7.4)
(10.9)
Total
(3.5)
4.7
108.2
(828.1)
(718.7)
2022
Cash and cash equivalents
133.0
133.0
Bank overdrafts
(93.8)
(93.8)
Borrowings due within one year
(150.1)
(150.1)
Borrowings due after one year
(595.4)
(595.4)
(554.2)
Lease liabilities
(105.7)
(105.7)
Trade and other payables
(445.9)
(445.9)
Trade receivables
367.1
367.1
Investments
2.0
2.0
Other current financial assets/(liabilities)
Derivative assets
15.7
15.7
Derivative liabilities
****
(3.9)
(9.9)
(13.8)
Total
(3.9)
5.8
135.0
(1,023.8)
(886.9)
** *** **** ** *** * This classification includes items for which the movement in fair value will be recognised in both profit and loss and other comprehensive income. ** Trade and other payables exclude corporation tax and include liabilities of \u00a315.3m (2022: \u00a37.9m restated) falling due after more than one year. *** Includes \u00a30.3m (2022: \u00a32.6m) falling due after more than one year. **** Derivative liabilities include liabilities of \u00a30.2m (2022: \u00a30.4m) falling due after more than one year: \u00a30.2m in 1\u20112 years and \u00a3nil in 2\u20113 years (2022: \u00a30.4m in 1\u20112 years and \u00a3nil in 2\u20113 years). Derivative liabilities designated at fair value represent the fair value of unsettled net investment hedge derivatives. The increase in value of net investment hedge derivatives in the year of \u00a30.4m is shown in the consolidated statement of comprehensive income. The decrease in other derivative assets and liabilities at fair value of \u00a31.1m is recognised in the income statement and consists of \u00a31.3m decrease of unsettled net foreign currency and metal forward contracts, which are not designated as hedges for accounting purposes offset by an increase of \u00a30.2m of forward contracts to be utilised against specific trade receivables and trade payables. There are no other financial liabilities included within payables disclosed above. Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table shows the Group\u2019s financial instruments held at fair value (excluding cash):
Quoted prices
in active
markets for Significant
identical other
assets and observable
liabilities inputs
Level 1 Level 2 Total
\u00a3m \u00a3m \u00a3m
As at 31 December 2023
Financial assets measured at fair value
Equity instruments*
1.7
1.7
Foreign currency forward contracts
12.1
12.1
1.7
12.1
13.8
Financial liabilities measured at fair value
Foreign currency forward contracts
(10.9)
(10.9)
(10.9)
(10.9)
As at 31 December 2022
Financial assets measured at fair value
Equity instruments*
2.0
2.0
Foreign currency forward contracts
15.7
15.7
2.0
15.7
17.7
Financial liabilities measured at fair value
Foreign currency forward contracts
(13.8)
(13.8)
(13.8)
(13.8)
* Equity instruments primarily relate to investments in funds in order to satisfy long\u2011term benefit arrangements. Valuation techniques for level 2 inputs Derivative assets and liabilities of \u00a312.1m and \u00a310.9m, respectively, are valued by level 2 techniques. The valuations are derived from discounted contractual cash flows using observable, and directly relevant, market interest rates and foreign exchange rates from market data providers. Valuation techniques for level 3 inputs At 31 December 2023, the Group held one external investment at fair value using significant unobservable (level 3) inputs. The valuation is derived using the cash flows of the investment which indicate a fair value of \u00a3nil. Valuation methodology Cash and cash equivalents, bank overdrafts, trade payables and trade receivables are carried at their book values as this approximates to their fair value due to the short\u2011term nature of the instruments. Long\u2011term and short\u2011term borrowings, apart from any that are subject to hedging arrangements, are carried at amortised cost as it is the intention that they will not be repaid prior to maturity, where this option exists. The fair values are evaluated by the Group based on parameters such as interest rates and relevant credit spreads. Long\u2011term borrowings that are subject to hedging arrangements are valued using appropriate discount rates to value the relevant hedged cash flows. Derivative assets and liabilities, including foreign exchange forward contracts, interest rate swaps and metal hedges, are valued using comparable observed market prices and a valuation model using foreign exchange spot and forward rates, interest rate curves and forward rate curves for the underlying commodities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-331": { "value": "
18. Financial risk management
Overview
The Group\u2019s activities expose it to a variety of financial risks: interest rate, foreign exchange and base metal price movements, in
addition to funding and liquidity risks. The financial instruments used to manage these risks themselves introduce exposure to market
risk and liquidity risk.
The Board has overall responsibility for the establishment and oversight of the Group\u2019s risk management framework. As described in
the Corporate Governance Report on page 112 the Executive Committee monitors risk and internal controls and the Audit Committee
monitors financial risk, while the other Board Committees also play a part in contributing to the oversight of risk.
The Audit Committee oversees how Management monitors compliance with the Group\u2019s financial risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the financial risks faced by the Group. The
Group Assurance department undertakes both regular and ad\u2011hoc reviews of risk management controls and procedures, the results
of which are reported to the Audit Committee.
The following sections discuss the management of specific financial risk factors in detail, including market risk, foreign exchange risk,
interest rate risk, commodity risk and liquidity risk. The management of credit risk is disclosed in Note 16.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity prices will affect the
Group\u2019s income and cash flows or the value of its financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters.
Under the management of the central Treasury function, the Group enters into derivatives in the ordinary course of business and also
manages financial liabilities in order to mitigate market risks. All such transactions are carried out within the guidelines set by the Board
and are undertaken only if they relate to underlying exposures.
Foreign exchange risk
The Group publishes consolidated accounts in Sterling but conducts much of its global business in other currencies. As a result, it is
subject to the risks associated with foreign exchange movements affecting transaction costs (transactional risk), translation of foreign
profits (profit translation risk) and translation of the underlying net assets of foreign operations (asset translation risk).
Management of transactional risk
The Group\u2019s wide geographical spread both in terms of cost base and customer locations helps to reduce the impact on profitability
of swings in exchange rates as well as creating opportunities for central netting of exposures. It is the Group\u2019s policy to minimise risk
to exchange rate movements affecting sales and purchases by economically hedging or netting currency exposures at the time of
commitment, or when there is a high probability of future commitment, using currency instruments (primarily forward exchange
contracts). A proportion of forecast exposures are hedged depending on the level of confidence and hedging is periodically adjusted
following regular reviews. On this basis over 50% of the Group\u2019s annual exposures to transactional risk are likely to be hedged at any
point in time and the Group\u2019s net transactional exposure to different currencies varies from time to time.
Management of profit translation risk
The Group is exposed to the translation of profits denominated in foreign currencies into the Sterling\u2011based income statement. The
interest cost related to the currency liabilities hedging the asset base provides a partial hedge to this exposure. Short\u2011term currency
option contracts may be used to provide limited protection against Sterling strength on an opportunistic basis. The translation of US
Dollar and Euro\u2011based profits represent the most significant translation exposures for the Group.
Management of asset translation risk
The Group hedges its net investments in its major overseas operations by way of external currency loans and forward currency
contracts. The intention is to manage the Group\u2019s exposure to gains and losses in Group equity resulting from the retranslation of
currency net assets at balance sheet dates.
To the extent that an instrument used to hedge a net investment in a foreign operation is determined to be an effective hedge, the gain
or loss arising is recognised directly in the translation reserves. Any ineffective portion is recognised immediately in the income statement.
The Group have designated \u00a3205m (2022: \u00a3288m) of loans in a net investment hedge of USD net assets and \u00a3374m (2022: \u00a3381m)
of EUR net assets. No ineffectiveness was recorded (2022: \u00a3nil) and a gain of \u00a30.4m (2022: \u00a38.8m loss) was taken to the translation
reserve. The amount accumulated in this reserve in respect of gains/losses arising on hedging instruments designated in net investment
hedges up to 31 December 2023 was an accumulated loss of \u00a30.8m (2022: accumulated loss of \u00a31.2m).
Currency profile of assets and liabilities
Assets and
liabilities
subject to
Lease Exchange interest Other net Total net Total net
Cash
*
Debt liabilities contracts rate risk assets assets assets
2023 2023 2023 2023 2023 2023 2023 2022
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Sterling
(74)
(13)
290
203
194
397
191
US Dollar
(6)
(205)
(7)
(218)
612
394
368
Euro
29
(374)
(29)
(184)
(558)
546
(12)
64
Other
91
(51)
(106)
(66)
317
251
283
Total
40
(579)
(100)
\u2013
(639)
1,669
1,030
906
**
* Cash is stated net of overdrafts.
** Other net assets includes leased assets: \u00a311.9m Sterling (2022: \u00a314.9m), \u00a39.1m US Dollar (2022: \u00a38.1m), \u00a354.0m Euro (2022: \u00a333.3m) and \u00a324.6m Other (2022: \u00a350.7m).
Exchange contracts and non\u2011Sterling debt are financial instruments used as currency hedges of overseas net assets.
Interest rate risk
The Group is exposed to a number of global interest rates through assets and liabilities denominated in jurisdictions to which these rates
are applied, most notably US, Eurozone and UK rates. The Group is exposed to these because market movements in these rates will
increase or decrease the interest charge recognised in the Group income statement.
Management of interest rate risk
The Group adopts a policy of maintaining a portion of its liabilities at fixed interest rates and reviewing the balance of the floating rate
exposure to ensure that if interest rates rise globally, the effect on the Group\u2019s income statement is manageable.
Interest rates are managed using fixed and floating rate debt and financial instruments including interest rate swaps. Floating rate
liabilities comprise short\u2011term debt which bears interest at short\u2011term bank rates and the liability side of exchange contracts where
the interest element is based primarily on three\u2011month inter\u2011bank rates.
All cash surpluses are invested for short periods and are treated as floating rate investments.
Non\u2011interest bearing financial assets and liabilities, including short\u2011term trade receivables and payables, have been excluded from the
following analysis.
Interest rate risk profile
The following table shows how much of our cash, interest\u2011bearing liabilities and exchange contracts attract both fixed and floating rate
interest charges, and how this is analysed between currencies:
Assets Weighted Weighted
Debt and Cash and subject average average
exchange exchange to interest Floating Fixed fixed period
contracts
*
contracts
rate risk
*
rate rate interest for which
2023 2023 2023 2023 2023 rate rate is fixed
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m % years
Sterling
(13)
216
203
203
US Dollar
(212)
(6)
(218)
(60)
(158)
3.9
2.6
Euro
(587)
29
(558)
(184)
(374)
2.3
4.0
Other
(157)
91
(66)
(66)
Total
(969)
330
(639)
(107)
(532)
* Net of lease liabilities; \u00a313m Sterling, \u00a37m US Dollar, \u00a329m Euro and \u00a351m Other.
Assets Weighted Weighted
Debt and Cash and subject average average
exchange exchange to interest Floating Fixed fixed period
contracts
*
contracts
rate risk
*
rate rate interest for which
2022 2022 2022 2022 2022 rate rate is fixed
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m % years
Sterling
(94)
141
47
47
US Dollar
(297)
(4)
(301)
(136)
(165)
3.9
3.6
Euro
(517)
52
(465)
(84)
(381)
2.3
5.0
Other
(153)
59
(94)
(94)
Total
(1,061)
248
(813)
(267)
(546)
* Net of lease liabilities; \u00a316m Sterling, \u00a39m US Dollar, \u00a331m Euro and \u00a350m Other.
Market risk sensitivity analysis on financial instruments
In estimating the sensitivity of the financial instruments, all other variables are held constant to determine the impact on profit before
tax and equity. The analysis is for illustrative purposes only, as in practice, market rates rarely change in isolation.
The values shown in the table below are estimates of the impact on financial instruments only. Actual results in the future may differ
materially from these estimates. As such, this table should not be considered as a projection of likely future gains and losses in these
financial instruments.
Sensitivity table
The outputs from the sensitivity analysis are estimates of the impact of market risk assuming that the specified changes occur only to
the financial derivatives and do not reflect the opposite movement from the impact of the specific change on the underlying business
that they are designed to hedge.
1% decrease 1% increase 10% 10%
in interest in interest weakening strengthening
rates rates in Sterling in Sterling
\u00a3m \u00a3m \u00a3m \u00a3m
At 31 December 2023
Impact on income statement: gain/(loss)
0.5
(0.5)
(18.4)
18.4
Impact on equity: (loss)/gain
(75.2)
75.2
At 31 December 2022
Impact on income statement: gain/(loss)
2.0
(2.0)
(11.3)
11.3
Impact on equity: (loss)/gain
(77.2)
77.2
Commodity risk
The Group\u2019s operating companies purchase metal and metal components and are, therefore, exposed to changes in commodity prices.
The Group manages this exposure through a centralised process hedging copper, zinc and aluminium using a combination of financial
contracts and local supply agreements designed to minimise the volatility of short\u2011term margins.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Management of liquidity risk
The Group\u2019s approach to managing liquidity is to ensure, as far as possible, that it will always have adequate resources to meet its
liabilities when they fall due, with sufficient headroom to cope with abnormal market conditions. This position is reviewed on a
quarterly basis.
Funding for the Group is co\u2011ordinated centrally by the Treasury function and comprises committed bilateral facilities with a core group
of banks, and a series of US loan note issues. The level of facilities is maintained such that facilities and term loans exceed the forecast
peak gross debt of the Group over a rolling 12\u2011month view by an appropriate amount taking into account market conditions and
corporate activity, including acquisitions, organic growth plans and share buybacks. In addition, we undertake regular covenant
compliance reviews to ensure that we remain fully within those covenant limits. At the end of 2023, the Group had undrawn committed
facilities totalling \u00a3300.0m (2022: \u00a3200.0m) and was holding cash and cash equivalents of \u00a3106.5m (2022: \u00a3133.0m). There are no
significant seasonal funding requirements or capital intensive investment areas for the Group.
Capital management
Overview
Capital management concerns the decision as to how the Group\u2019s activities are financed and specifically, how much of the Group
capital is provided by borrowings (or debt) and how much of it is financed with equity raised from the issue of share capital.
The Board\u2019s policy is to maintain a balance sheet with a broad capital base and the strength to sustain the future development of the
business, including acquisitions.
The capital base of the Group includes total equity and reserves and net debt. Employee benefit obligations net of deferred tax form
part of the extended capital base. Management of this element of the capital base is discussed further in Note 14 of the financial
statements. Undrawn committed funding facilities are maintained as described in Note 19 to provide additional capital for growth
(including acquisitions and organic investments) and liquidity requirements as discussed above. 2022 results have been restated in
the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
Capital base
2022
2023 \u00a3m
\u00a3m (Restated)
Total equity
1,030
906
Gross debt including overdrafts
645
839
Gross cash
(107)
(133)
Capital base
1,568
1,612
Employee benefits and deferred tax assets
24
53
Extended capital base
1,592
1,665
Undrawn funding facilities
300
200
Available capital base
1,892
1,865
Part of the capital base is held in currencies to broadly match the currency base of the assets being funded as described in the asset
translation risk section.
Debt or equity
The balance between debt and equity in the capital base of the Group is considered regularly by the Board in light of market conditions,
business forecasts, growth opportunities and the ratio of net debt to adjusted EBITDA. Funding covenants currently limit net debt to
a maximum of 3.0 times EBITDA. The net debt to EBITDA ratio at the end of 2023 was 1.3 times (2022: 1.8 times). Through the life of
our five\u2011year plan, the Board would consider appropriate acquisitions that could take net debt up to 2.5 times EBITDA on acquisition,
provided that a clear plan exists to reduce this ratio back to under 2.0 times. It is expected that at these levels our debt would continue
to be perceived as investment grade. The potential benefits to equity shareholders of greater leverage are offset by higher risk and the
cost and availability of funding. The Board will consider raising additional equity in the event that it is required to support the capital base
of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-358": { "value": "Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity prices will affect the Group\u2019s income and cash flows or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters. Under the management of the central Treasury function, the Group enters into derivatives in the ordinary course of business and also manages financial liabilities in order to mitigate market risks. All such transactions are carried out within the guidelines set by the Board and are undertaken only if they relate to underlying exposures. Foreign exchange risk The Group publishes consolidated accounts in Sterling but conducts much of its global business in other currencies. As a result, it is subject to the risks associated with foreign exchange movements affecting transaction costs (transactional risk), translation of foreign profits (profit translation risk) and translation of the underlying net assets of foreign operations (asset translation risk). Management of transactional risk The Group\u2019s wide geographical spread both in terms of cost base and customer locations helps to reduce the impact on profitability of swings in exchange rates as well as creating opportunities for central netting of exposures. It is the Group\u2019s policy to minimise risk to exchange rate movements affecting sales and purchases by economically hedging or netting currency exposures at the time of commitment, or when there is a high probability of future commitment, using currency instruments (primarily forward exchange contracts). A proportion of forecast exposures are hedged depending on the level of confidence and hedging is periodically adjusted following regular reviews. On this basis over 50% of the Group\u2019s annual exposures to transactional risk are likely to be hedged at any point in time and the Group\u2019s net transactional exposure to different currencies varies from time to time. Management of profit translation risk The Group is exposed to the translation of profits denominated in foreign currencies into the Sterling\u2011based income statement. The interest cost related to the currency liabilities hedging the asset base provides a partial hedge to this exposure. Short\u2011term currency option contracts may be used to provide limited protection against Sterling strength on an opportunistic basis. The translation of US Dollar and Euro\u2011based profits represent the most significant translation exposures for the Group. Management of asset translation risk The Group hedges its net investments in its major overseas operations by way of external currency loans and forward currency contracts. The intention is to manage the Group\u2019s exposure to gains and losses in Group equity resulting from the retranslation of currency net assets at balance sheet dates. To the extent that an instrument used to hedge a net investment in a foreign operation is determined to be an effective hedge, the gain or loss arising is recognised directly in the translation reserves. Any ineffective portion is recognised immediately in the income statement. The Group have designated \u00a3205m (2022: \u00a3288m) of loans in a net investment hedge of USD net assets and \u00a3374m (2022: \u00a3381m) of EUR net assets. No ineffectiveness was recorded (2022: \u00a3nil) and a gain of \u00a30.4m (2022: \u00a38.8m loss) was taken to the translation reserve. The amount accumulated in this reserve in respect of gains/losses arising on hedging instruments designated in net investment hedges up to 31 December 2023 was an accumulated loss of \u00a30.8m (2022: accumulated loss of \u00a31.2m). Currency profile of assets and liabilities
Assets and
liabilities
subject to
Lease Exchange interest Other net Total net Total net
Cash
*
Debt liabilities contracts rate risk assets assets assets
2023 2023 2023 2023 2023 2023 2023 2022
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Sterling
(74)
(13)
290
203
194
397
191
US Dollar
(6)
(205)
(7)
(218)
612
394
368
Euro
29
(374)
(29)
(184)
(558)
546
(12)
64
Other
91
(51)
(106)
(66)
317
251
283
Total
40
(579)
(100)
\u2013
(639)
1,669
1,030
906
** * Cash is stated net of overdrafts. ** Other net assets includes leased assets: \u00a311.9m Sterling (2022: \u00a314.9m), \u00a39.1m US Dollar (2022: \u00a38.1m), \u00a354.0m Euro (2022: \u00a333.3m) and \u00a324.6m Other (2022: \u00a350.7m). Exchange contracts and non\u2011Sterling debt are financial instruments used as currency hedges of overseas net assets. Interest rate risk The Group is exposed to a number of global interest rates through assets and liabilities denominated in jurisdictions to which these rates are applied, most notably US, Eurozone and UK rates. The Group is exposed to these because market movements in these rates will increase or decrease the interest charge recognised in the Group income statement. Management of interest rate risk The Group adopts a policy of maintaining a portion of its liabilities at fixed interest rates and reviewing the balance of the floating rate exposure to ensure that if interest rates rise globally, the effect on the Group\u2019s income statement is manageable. Interest rates are managed using fixed and floating rate debt and financial instruments including interest rate swaps. Floating rate liabilities comprise short\u2011term debt which bears interest at short\u2011term bank rates and the liability side of exchange contracts where the interest element is based primarily on three\u2011month inter\u2011bank rates. All cash surpluses are invested for short periods and are treated as floating rate investments. Non\u2011interest bearing financial assets and liabilities, including short\u2011term trade receivables and payables, have been excluded from the following analysis. Interest rate risk profile The following table shows how much of our cash, interest\u2011bearing liabilities and exchange contracts attract both fixed and floating rate interest charges, and how this is analysed between currencies:
Assets Weighted Weighted
Debt and Cash and subject average average
exchange exchange to interest Floating Fixed fixed period
contracts
*
contracts
rate risk
*
rate rate interest for which
2023 2023 2023 2023 2023 rate rate is fixed
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m % years
Sterling
(13)
216
203
203
US Dollar
(212)
(6)
(218)
(60)
(158)
3.9
2.6
Euro
(587)
29
(558)
(184)
(374)
2.3
4.0
Other
(157)
91
(66)
(66)
Total
(969)
330
(639)
(107)
(532)
* Net of lease liabilities; \u00a313m Sterling, \u00a37m US Dollar, \u00a329m Euro and \u00a351m Other.
Assets Weighted Weighted
Debt and Cash and subject average average
exchange exchange to interest Floating Fixed fixed period
contracts
*
contracts
rate risk
*
rate rate interest for which
2022 2022 2022 2022 2022 rate rate is fixed
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m % years
Sterling
(94)
141
47
47
US Dollar
(297)
(4)
(301)
(136)
(165)
3.9
3.6
Euro
(517)
52
(465)
(84)
(381)
2.3
5.0
Other
(153)
59
(94)
(94)
Total
(1,061)
248
(813)
(267)
(546)
* Net of lease liabilities; \u00a316m Sterling, \u00a39m US Dollar, \u00a331m Euro and \u00a350m Other. Market risk sensitivity analysis on financial instruments In estimating the sensitivity of the financial instruments, all other variables are held constant to determine the impact on profit before tax and equity. The analysis is for illustrative purposes only, as in practice, market rates rarely change in isolation. The values shown in the table below are estimates of the impact on financial instruments only. Actual results in the future may differ materially from these estimates. As such, this table should not be considered as a projection of likely future gains and losses in these financial instruments. Sensitivity table The outputs from the sensitivity analysis are estimates of the impact of market risk assuming that the specified changes occur only to the financial derivatives and do not reflect the opposite movement from the impact of the specific change on the underlying business that they are designed to hedge.
1% decrease 1% increase 10% 10%
in interest in interest weakening strengthening
rates rates in Sterling in Sterling
\u00a3m \u00a3m \u00a3m \u00a3m
At 31 December 2023
Impact on income statement: gain/(loss)
0.5
(0.5)
(18.4)
18.4
Impact on equity: (loss)/gain
(75.2)
75.2
At 31 December 2022
Impact on income statement: gain/(loss)
2.0
(2.0)
(11.3)
11.3
Impact on equity: (loss)/gain
(77.2)
77.2
Commodity risk The Group\u2019s operating companies purchase metal and metal components and are, therefore, exposed to changes in commodity prices. The Group manages this exposure through a centralised process hedging copper, zinc and aluminium using a combination of financial contracts and local supply agreements designed to minimise the volatility of short\u2011term margins. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-379": { "value": "Market risk sensitivity analysis on financial instruments In estimating the sensitivity of the financial instruments, all other variables are held constant to determine the impact on profit before tax and equity. The analysis is for illustrative purposes only, as in practice, market rates rarely change in isolation. The values shown in the table below are estimates of the impact on financial instruments only. Actual results in the future may differ materially from these estimates. As such, this table should not be considered as a projection of likely future gains and losses in these financial instruments. Sensitivity table The outputs from the sensitivity analysis are estimates of the impact of market risk assuming that the specified changes occur only to the financial derivatives and do not reflect the opposite movement from the impact of the specific change on the underlying business that they are designed to hedge.
1% decrease 1% increase 10% 10%
in interest in interest weakening strengthening
rates rates in Sterling in Sterling
\u00a3m \u00a3m \u00a3m \u00a3m
At 31 December 2023
Impact on income statement: gain/(loss)
0.5
(0.5)
(18.4)
18.4
Impact on equity: (loss)/gain
(75.2)
75.2
At 31 December 2022
Impact on income statement: gain/(loss)
2.0
(2.0)
(11.3)
11.3
Impact on equity: (loss)/gain
(77.2)
77.2
Commodity risk The Group\u2019s operating companies purchase metal and metal components and are, therefore, exposed to changes in commodity prices. The Group manages this exposure through a centralised process hedging copper, zinc and aluminium using a combination of financial contracts and local supply agreements designed to minimise the volatility of short\u2011term margins. ", "dimensions": { "concept": "ifrs-full:SensitivityAnalysisForEachTypeOfMarketRisk", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-359": { "value": "Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Management of liquidity risk The Group\u2019s approach to managing liquidity is to ensure, as far as possible, that it will always have adequate resources to meet its liabilities when they fall due, with sufficient headroom to cope with abnormal market conditions. This position is reviewed on a quarterly basis. Funding for the Group is co\u2011ordinated centrally by the Treasury function and comprises committed bilateral facilities with a core group of banks, and a series of US loan note issues. The level of facilities is maintained such that facilities and term loans exceed the forecast peak gross debt of the Group over a rolling 12\u2011month view by an appropriate amount taking into account market conditions and corporate activity, including acquisitions, organic growth plans and share buybacks. In addition, we undertake regular covenant compliance reviews to ensure that we remain fully within those covenant limits. At the end of 2023, the Group had undrawn committed facilities totalling \u00a3300.0m (2022: \u00a3200.0m) and was holding cash and cash equivalents of \u00a3106.5m (2022: \u00a3133.0m). There are no significant seasonal funding requirements or capital intensive investment areas for the Group. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-360": { "value": "Capital management Overview Capital management concerns the decision as to how the Group\u2019s activities are financed and specifically, how much of the Group capital is provided by borrowings (or debt) and how much of it is financed with equity raised from the issue of share capital. The Board\u2019s policy is to maintain a balance sheet with a broad capital base and the strength to sustain the future development of the business, including acquisitions. The capital base of the Group includes total equity and reserves and net debt. Employee benefit obligations net of deferred tax form part of the extended capital base. Management of this element of the capital base is discussed further in Note 14 of the financial statements. Undrawn committed funding facilities are maintained as described in Note 19 to provide additional capital for growth (including acquisitions and organic investments) and liquidity requirements as discussed above. 2022 results have been restated in the following table to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1. Capital base
2022
2023 \u00a3m
\u00a3m (Restated)
Total equity
1,030
906
Gross debt including overdrafts
645
839
Gross cash
(107)
(133)
Capital base
1,568
1,612
Employee benefits and deferred tax assets
24
53
Extended capital base
1,592
1,665
Undrawn funding facilities
300
200
Available capital base
1,892
1,865
Part of the capital base is held in currencies to broadly match the currency base of the assets being funded as described in the asset translation risk section. Debt or equity The balance between debt and equity in the capital base of the Group is considered regularly by the Board in light of market conditions, business forecasts, growth opportunities and the ratio of net debt to adjusted EBITDA. Funding covenants currently limit net debt to a maximum of 3.0 times EBITDA. The net debt to EBITDA ratio at the end of 2023 was 1.3 times (2022: 1.8 times). Through the life of our five\u2011year plan, the Board would consider appropriate acquisitions that could take net debt up to 2.5 times EBITDA on acquisition, provided that a clear plan exists to reduce this ratio back to under 2.0 times. It is expected that at these levels our debt would continue to be perceived as investment grade. The potential benefits to equity shareholders of greater leverage are offset by higher risk and the cost and availability of funding. The Board will consider raising additional equity in the event that it is required to support the capital base of the Group.", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-386": { "value": "19. Net debt Net debt is the Group\u2019s key measure used to evaluate total outstanding debt, net of the current cash resources. Some of the Group\u2019s borrowings (and cash) are held in foreign currencies. Movements in foreign exchange rates affect the Sterling value of the net debt. Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Movement in net debt
2023 2022
\u00a3m \u00a3m
Adjusted EBITDA
*
503.2
457.0
Working capital movements
(31.3)
(85.1)
Capital and development expenditure
(79.9)
(71.3)
Provisions and employee benefit movements
(2.7)
1.5
Principal elements of lease payments
(29.0)
(32.3)
Other
6.0
20.2
Adjusted operating cash flow
366.3
290.0
Adjusting items
(43.1)
(52.6)
Tax paid
(76.1)
(48.6)
Interest
(22.7)
(19.2)
Derivatives
9.8
(8.6)
Additional pension scheme funding
\u2013
(3.5)
Free cash flow before corporate activity
234.2
157.5
Dividends paid to equity shareholders
(68.8)
(62.2)
Acquisition and disposal of subsidiaries
0.5
(213.3)
Net purchase of own shares
0.6
(18.8)
Net cash flow (excluding debt movements)
166.5
(136.8)
** *** * Adjusted profit after tax \u00a3302.9m before interest \u00a323.2m, tax \u00a384.5m, depreciation \u00a374.8m, amortisation \u00a317.6m and impairment on property, plant and equipment and non\u2011acquired intangible assets \u00a30.2m. ** Movement in provisions and employee benefits as per the statement of cash flows \u00a30.9m adjusted for the movement in the restructuring provisions \u00a33.6m. *** Adjusted operating cash flow is the cash generated from the operations shown in the statement of cash flows less cash spent acquiring property, plant and equipment, non\u2011acquired intangible assets and investments; plus cash received from the sale of property, plant and equipment and the sale of investments, excluding the cash impact of adjusting items. This measure best reflects the operating cash flows of the Group. Reconciliation of net cash to movement in net debt
2023 2022
\u00a3m \u00a3m
Net increase in cash and cash equivalents, excluding foreign exchange
17.7
11.0
Less: cash acquired/disposed
0.4
(10.0)
Net repayment/(drawdown) of borrowings excluding foreign exchange and net debt disposed/acquired
148.4
(137.8)
Decrease/(Increase) in net debt before acquisitions, disposals and foreign exchange
166.5
(136.8)
Net (debt)/cash acquired/disposed
(0.4)
10.0
Currency translation differences
1.8
(50.6)
Movement in lease liabilities
5.5
(11.8)
Movement in net debt in the year
173.4
(189.2)
Net debt at the start of the year
(812.0)
(622.8)
Net debt at the end of the year
(638.6)
(812.0)
Reconciliation of adjusted operating cash flow to cash flow statement
2023 2022
\u00a3m \u00a3m
Cash generated from operations
439.3
335.8
Principal lease payments
(29.0)
(32.3)
Settlement of transactional derivatives
(8.8)
2.3
Acquisition of property, plant and equipment and non\u2011acquired intangibles
(79.9)
(71.3)
Adjusting items
43.1
52.6
Proceeds from sale of property, plant and equipment
1.6
2.9
Adjusted operating cash flow
366.3
290.0
Reconciliation of cash and cash equivalents
2023 2022
\u00a3m \u00a3m
Cash and cash equivalents in current assets
106.5
133.0
Bank overdraft in current liabilities
(66.3)
(93.8)
Cash and cash equivalents
40.2
39.2
Analysis of net debt
Borrowings and finance
leases due
Cash and after more
cash within one than one Lease Total
equivalents year year creditors net debt
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
At 1 January 2022
29.1
(127.7)
(430.3)
(93.9)
(622.8)
Lease additions, extensions, terminations and payment changes
(41.4)
(41.4)
Lease payments and interest
32.3
32.3
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/(debt) disposed of/acquired
2.5
(21.1)
(123.1)
(141.7)
Cash/(debt) acquired
10.0
10.0
Settlement of currency derivatives hedging balance sheet
(6.3)
(6.3)
Currency translation differences
3.9
(1.3)
(42.0)
(2.7)
(42.1)
At 31 December 2022
39.2
(150.1)
(595.4)
(105.7)
(812.0)
Lease additions, extensions, terminations and payment changes
(24.2)
(24.2)
Lease payments and interest
29.0
29.0
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/debt disposed of/acquired
3.0
99.2
49.6
151.8
Settlement of currency derivatives hedging balance sheet
1.0
1.0
Currency translation differences
(3.0)
3.7
14.4
0.7
15.8
At 31 December 2023
40.2
(47.2)
(531.4)
(100.2)
(638.6)
Undrawn committed facilities The Group has various undrawn committed borrowing facilities. The facilities available at 31 December in respect of which all conditions precedent had been met were as follows:
2023 2022
\u00a3m \u00a3m
Expiring within one year
100.0
\u2013
Expiring between one and two years
75.0
193.5
Expiring after more than two years
125.0
6.0
Total
300.0
199.5
The weighted average life of these facilities is 1.6 years (2022: 0.9 years). Terms and debt repayment schedule The terms and conditions of cash and cash equivalents, outstanding loans, lease liabilities and derivative financial liabilities were as follows:
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
Floating
106.5
106.5
106.5
Term loan 2024
Floating
(47.2)
(47.2)
(47.2)
US loan notes 2025
1.39%
(130.4)
(134.0)
(1.8)
(132.2)
US loan notes 2026
3.86%
(98.4)
(109.8)
(3.8)
(3.8)
(102.2)
US loan notes 2027
3.92%
(59.1)
(68.3)
(2.3)
(2.3)
(2.3)
(61.4)
US loan notes 2028
1.53%
(69.6)
(75.1)
(1.1)
(1.1)
(1.1)
(1.1)
(70.7)
US loan notes 2029
3.30%
(87.0)
(104.4)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(89.9)
US loan notes 2030
3.40%
(87.0)
(108.0)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(93.0)
Bank overdrafts
Floating
(66.3)
(66.3)
(66.3)
Lease liabilities
Various
(100.2)
(100.2)
(25.2)
(18.6)
(15.7)
(12.2)
(8.5)
(20.0)
Derivative financial liabilities
(10.9)
(10.9)
(10.7)
(0.2)
Total
(649.6)
(717.7)
(57.8)
(164.1)
(127.2)
(80.6)
(85.1)
(202.9)
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Cash and cash equivalents
Floating
133.0
133.0
133.0
Revolving credit facilities
Floating
(100.5)
(100.5)
(100.5)
Term loan 2023
Floating
(49.6)
(49.6)
(49.6)
Term loan 2024
Floating
(49.6)
(49.6)
(24.8)
(24.8)
US loan notes 2025
1.39%
(132.7)
(138.1)
(1.8)
(1.8)
(134.5)
US loan notes 2026
3.86%
(103.3)
(119.3)
(4.0)
(4.0)
(4.0)
(107.3)
US loan notes 2027
3.92%
(62.0)
(74.0)
(2.4)
(2.4)
(2.4)
(2.4)
(64.4)
US loan notes 2028
1.53%
(70.8)
(77.4)
(1.1)
(1.1)
(1.1)
(1.1)
(1.1)
(71.9)
US loan notes 2029
3.30%
(88.5)
(108.8)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(94.3)
US loan notes 2030
3.40%
(88.5)
(112.5)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(97.5)
Bank overdrafts
Floating
(93.8)
(93.8)
(93.8)
Lease liabilities
Various
(105.7)
(105.7)
(25.8)
(22.1)
(15.8)
(11.8)
(9.9)
(20.3)
Derivative financial liabilities
(13.8)
(13.8)
(13.4)
(0.4)
Total
(825.8)
(910.1)
(190.1)
(62.5)
(163.7)
(128.5)
(81.3)
(284.0)
Contractual cash flows include undiscounted committed interest cash flows and, where the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the reporting date. Changes in liabilities arising from financing activities The table below details changes in the Group\u2019s liabilities arising from financing activities, including both cash and non\u2011cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group\u2019s consolidated cash flow statement as cash flows from financing activities.
Non-cash changes
31
1 January Financing Acquisition December
2023
cash flows
*
of subsidiary New leases Exchange Other 2023
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Revolving credit facilities
(100.5)
100.1
0.4
\u2013
Term loan 2023 and 2024
(99.2)
48.3
3.7
(47.2)
US loan notes
(545.8)
14.4
(531.4)
Bank overdrafts
(93.8)
27.5
(66.3)
Lease liabilities
(105.7)
31.9
(24.2)
0.7
(2.9)
(100.2)
Total
(945.0)
207.8
(24.2)
19.2
(2.9)
(745.1)
**
Non-cash changes
31
1 January Financing Acquisition December
2022
cash flows
*
of subsidiary New leases Exchange Other 2022
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Revolving credit facilities
(70.3)
(35.0)
4.8
(100.5)
Term loan 2023 and 2024
(133.3)
24.0
10.1
(99.2)
Acquired loan
(1.8)
1.8
\u2013
US loan notes
(352.6)
(221.9)
28.7
(545.8)
Bank overdrafts
(65.5)
(28.3)
(93.8)
Lease liabilities
(93.9)
35.1
(41.4)
(2.7)
(2.8)
(105.7)
Total
(717.4)
(224.3)
\u2013
(41.4)
40.9
(2.8)
(945.0)
** * Financing cash flows exclude the impact of interest paid. ** Includes IFRS 16 interest payments. Interest-bearing loans and borrowings The Group borrows money from financial institutions in the form of bonds and other financial instruments. These generally have fixed interest rates and are for a fixed term or are drawn from committed borrowing facilities that generally have floating interest rates. For more information about the Group\u2019s exposure to interest rate and foreign currency risk, see Note 18.
2023 2022
\u00a3m \u00a3m
Current liabilities
Unsecured loan notes and other loans
47.2
150.1
Lease liabilities
25.2
25.8
Total
72.4
175.9
Non-current liabilities
Unsecured loan notes and other loans
531.4
595.4
Lease liabilities
75.0
79.9
Total
606.4
675.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-380": { "value": "19. Net debt Net debt is the Group\u2019s key measure used to evaluate total outstanding debt, net of the current cash resources. Some of the Group\u2019s borrowings (and cash) are held in foreign currencies. Movements in foreign exchange rates affect the Sterling value of the net debt. Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Movement in net debt
2023 2022
\u00a3m \u00a3m
Adjusted EBITDA
*
503.2
457.0
Working capital movements
(31.3)
(85.1)
Capital and development expenditure
(79.9)
(71.3)
Provisions and employee benefit movements
(2.7)
1.5
Principal elements of lease payments
(29.0)
(32.3)
Other
6.0
20.2
Adjusted operating cash flow
366.3
290.0
Adjusting items
(43.1)
(52.6)
Tax paid
(76.1)
(48.6)
Interest
(22.7)
(19.2)
Derivatives
9.8
(8.6)
Additional pension scheme funding
\u2013
(3.5)
Free cash flow before corporate activity
234.2
157.5
Dividends paid to equity shareholders
(68.8)
(62.2)
Acquisition and disposal of subsidiaries
0.5
(213.3)
Net purchase of own shares
0.6
(18.8)
Net cash flow (excluding debt movements)
166.5
(136.8)
** *** * Adjusted profit after tax \u00a3302.9m before interest \u00a323.2m, tax \u00a384.5m, depreciation \u00a374.8m, amortisation \u00a317.6m and impairment on property, plant and equipment and non\u2011acquired intangible assets \u00a30.2m. ** Movement in provisions and employee benefits as per the statement of cash flows \u00a30.9m adjusted for the movement in the restructuring provisions \u00a33.6m. *** Adjusted operating cash flow is the cash generated from the operations shown in the statement of cash flows less cash spent acquiring property, plant and equipment, non\u2011acquired intangible assets and investments; plus cash received from the sale of property, plant and equipment and the sale of investments, excluding the cash impact of adjusting items. This measure best reflects the operating cash flows of the Group. Reconciliation of net cash to movement in net debt
2023 2022
\u00a3m \u00a3m
Net increase in cash and cash equivalents, excluding foreign exchange
17.7
11.0
Less: cash acquired/disposed
0.4
(10.0)
Net repayment/(drawdown) of borrowings excluding foreign exchange and net debt disposed/acquired
148.4
(137.8)
Decrease/(Increase) in net debt before acquisitions, disposals and foreign exchange
166.5
(136.8)
Net (debt)/cash acquired/disposed
(0.4)
10.0
Currency translation differences
1.8
(50.6)
Movement in lease liabilities
5.5
(11.8)
Movement in net debt in the year
173.4
(189.2)
Net debt at the start of the year
(812.0)
(622.8)
Net debt at the end of the year
(638.6)
(812.0)
Reconciliation of adjusted operating cash flow to cash flow statement
2023 2022
\u00a3m \u00a3m
Cash generated from operations
439.3
335.8
Principal lease payments
(29.0)
(32.3)
Settlement of transactional derivatives
(8.8)
2.3
Acquisition of property, plant and equipment and non\u2011acquired intangibles
(79.9)
(71.3)
Adjusting items
43.1
52.6
Proceeds from sale of property, plant and equipment
1.6
2.9
Adjusted operating cash flow
366.3
290.0
Reconciliation of cash and cash equivalents
2023 2022
\u00a3m \u00a3m
Cash and cash equivalents in current assets
106.5
133.0
Bank overdraft in current liabilities
(66.3)
(93.8)
Cash and cash equivalents
40.2
39.2
Analysis of net debt
Borrowings and finance
leases due
Cash and after more
cash within one than one Lease Total
equivalents year year creditors net debt
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
At 1 January 2022
29.1
(127.7)
(430.3)
(93.9)
(622.8)
Lease additions, extensions, terminations and payment changes
(41.4)
(41.4)
Lease payments and interest
32.3
32.3
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/(debt) disposed of/acquired
2.5
(21.1)
(123.1)
(141.7)
Cash/(debt) acquired
10.0
10.0
Settlement of currency derivatives hedging balance sheet
(6.3)
(6.3)
Currency translation differences
3.9
(1.3)
(42.0)
(2.7)
(42.1)
At 31 December 2022
39.2
(150.1)
(595.4)
(105.7)
(812.0)
Lease additions, extensions, terminations and payment changes
(24.2)
(24.2)
Lease payments and interest
29.0
29.0
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/debt disposed of/acquired
3.0
99.2
49.6
151.8
Settlement of currency derivatives hedging balance sheet
1.0
1.0
Currency translation differences
(3.0)
3.7
14.4
0.7
15.8
At 31 December 2023
40.2
(47.2)
(531.4)
(100.2)
(638.6)
Undrawn committed facilities The Group has various undrawn committed borrowing facilities. The facilities available at 31 December in respect of which all conditions precedent had been met were as follows:
2023 2022
\u00a3m \u00a3m
Expiring within one year
100.0
\u2013
Expiring between one and two years
75.0
193.5
Expiring after more than two years
125.0
6.0
Total
300.0
199.5
The weighted average life of these facilities is 1.6 years (2022: 0.9 years). Terms and debt repayment schedule The terms and conditions of cash and cash equivalents, outstanding loans, lease liabilities and derivative financial liabilities were as follows:
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
Floating
106.5
106.5
106.5
Term loan 2024
Floating
(47.2)
(47.2)
(47.2)
US loan notes 2025
1.39%
(130.4)
(134.0)
(1.8)
(132.2)
US loan notes 2026
3.86%
(98.4)
(109.8)
(3.8)
(3.8)
(102.2)
US loan notes 2027
3.92%
(59.1)
(68.3)
(2.3)
(2.3)
(2.3)
(61.4)
US loan notes 2028
1.53%
(69.6)
(75.1)
(1.1)
(1.1)
(1.1)
(1.1)
(70.7)
US loan notes 2029
3.30%
(87.0)
(104.4)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(89.9)
US loan notes 2030
3.40%
(87.0)
(108.0)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(93.0)
Bank overdrafts
Floating
(66.3)
(66.3)
(66.3)
Lease liabilities
Various
(100.2)
(100.2)
(25.2)
(18.6)
(15.7)
(12.2)
(8.5)
(20.0)
Derivative financial liabilities
(10.9)
(10.9)
(10.7)
(0.2)
Total
(649.6)
(717.7)
(57.8)
(164.1)
(127.2)
(80.6)
(85.1)
(202.9)
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Cash and cash equivalents
Floating
133.0
133.0
133.0
Revolving credit facilities
Floating
(100.5)
(100.5)
(100.5)
Term loan 2023
Floating
(49.6)
(49.6)
(49.6)
Term loan 2024
Floating
(49.6)
(49.6)
(24.8)
(24.8)
US loan notes 2025
1.39%
(132.7)
(138.1)
(1.8)
(1.8)
(134.5)
US loan notes 2026
3.86%
(103.3)
(119.3)
(4.0)
(4.0)
(4.0)
(107.3)
US loan notes 2027
3.92%
(62.0)
(74.0)
(2.4)
(2.4)
(2.4)
(2.4)
(64.4)
US loan notes 2028
1.53%
(70.8)
(77.4)
(1.1)
(1.1)
(1.1)
(1.1)
(1.1)
(71.9)
US loan notes 2029
3.30%
(88.5)
(108.8)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(94.3)
US loan notes 2030
3.40%
(88.5)
(112.5)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(97.5)
Bank overdrafts
Floating
(93.8)
(93.8)
(93.8)
Lease liabilities
Various
(105.7)
(105.7)
(25.8)
(22.1)
(15.8)
(11.8)
(9.9)
(20.3)
Derivative financial liabilities
(13.8)
(13.8)
(13.4)
(0.4)
Total
(825.8)
(910.1)
(190.1)
(62.5)
(163.7)
(128.5)
(81.3)
(284.0)
Contractual cash flows include undiscounted committed interest cash flows and, where the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the reporting date. Changes in liabilities arising from financing activities The table below details changes in the Group\u2019s liabilities arising from financing activities, including both cash and non\u2011cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group\u2019s consolidated cash flow statement as cash flows from financing activities.
Non-cash changes
31
1 January Financing Acquisition December
2023
cash flows
*
of subsidiary New leases Exchange Other 2023
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Revolving credit facilities
(100.5)
100.1
0.4
\u2013
Term loan 2023 and 2024
(99.2)
48.3
3.7
(47.2)
US loan notes
(545.8)
14.4
(531.4)
Bank overdrafts
(93.8)
27.5
(66.3)
Lease liabilities
(105.7)
31.9
(24.2)
0.7
(2.9)
(100.2)
Total
(945.0)
207.8
(24.2)
19.2
(2.9)
(745.1)
**
Non-cash changes
31
1 January Financing Acquisition December
2022
cash flows
*
of subsidiary New leases Exchange Other 2022
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Revolving credit facilities
(70.3)
(35.0)
4.8
(100.5)
Term loan 2023 and 2024
(133.3)
24.0
10.1
(99.2)
Acquired loan
(1.8)
1.8
\u2013
US loan notes
(352.6)
(221.9)
28.7
(545.8)
Bank overdrafts
(65.5)
(28.3)
(93.8)
Lease liabilities
(93.9)
35.1
(41.4)
(2.7)
(2.8)
(105.7)
Total
(717.4)
(224.3)
\u2013
(41.4)
40.9
(2.8)
(945.0)
** * Financing cash flows exclude the impact of interest paid. ** Includes IFRS 16 interest payments. Interest-bearing loans and borrowings The Group borrows money from financial institutions in the form of bonds and other financial instruments. These generally have fixed interest rates and are for a fixed term or are drawn from committed borrowing facilities that generally have floating interest rates. For more information about the Group\u2019s exposure to interest rate and foreign currency risk, see Note 18.
2023 2022
\u00a3m \u00a3m
Current liabilities
Unsecured loan notes and other loans
47.2
150.1
Lease liabilities
25.2
25.8
Total
72.4
175.9
Non-current liabilities
Unsecured loan notes and other loans
531.4
595.4
Lease liabilities
75.0
79.9
Total
606.4
675.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-361": { "value": "19. Net debt Net debt is the Group\u2019s key measure used to evaluate total outstanding debt, net of the current cash resources. Some of the Group\u2019s borrowings (and cash) are held in foreign currencies. Movements in foreign exchange rates affect the Sterling value of the net debt. Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Movement in net debt
2023 2022
\u00a3m \u00a3m
Adjusted EBITDA
*
503.2
457.0
Working capital movements
(31.3)
(85.1)
Capital and development expenditure
(79.9)
(71.3)
Provisions and employee benefit movements
(2.7)
1.5
Principal elements of lease payments
(29.0)
(32.3)
Other
6.0
20.2
Adjusted operating cash flow
366.3
290.0
Adjusting items
(43.1)
(52.6)
Tax paid
(76.1)
(48.6)
Interest
(22.7)
(19.2)
Derivatives
9.8
(8.6)
Additional pension scheme funding
\u2013
(3.5)
Free cash flow before corporate activity
234.2
157.5
Dividends paid to equity shareholders
(68.8)
(62.2)
Acquisition and disposal of subsidiaries
0.5
(213.3)
Net purchase of own shares
0.6
(18.8)
Net cash flow (excluding debt movements)
166.5
(136.8)
** *** * Adjusted profit after tax \u00a3302.9m before interest \u00a323.2m, tax \u00a384.5m, depreciation \u00a374.8m, amortisation \u00a317.6m and impairment on property, plant and equipment and non\u2011acquired intangible assets \u00a30.2m. ** Movement in provisions and employee benefits as per the statement of cash flows \u00a30.9m adjusted for the movement in the restructuring provisions \u00a33.6m. *** Adjusted operating cash flow is the cash generated from the operations shown in the statement of cash flows less cash spent acquiring property, plant and equipment, non\u2011acquired intangible assets and investments; plus cash received from the sale of property, plant and equipment and the sale of investments, excluding the cash impact of adjusting items. This measure best reflects the operating cash flows of the Group. Reconciliation of net cash to movement in net debt
2023 2022
\u00a3m \u00a3m
Net increase in cash and cash equivalents, excluding foreign exchange
17.7
11.0
Less: cash acquired/disposed
0.4
(10.0)
Net repayment/(drawdown) of borrowings excluding foreign exchange and net debt disposed/acquired
148.4
(137.8)
Decrease/(Increase) in net debt before acquisitions, disposals and foreign exchange
166.5
(136.8)
Net (debt)/cash acquired/disposed
(0.4)
10.0
Currency translation differences
1.8
(50.6)
Movement in lease liabilities
5.5
(11.8)
Movement in net debt in the year
173.4
(189.2)
Net debt at the start of the year
(812.0)
(622.8)
Net debt at the end of the year
(638.6)
(812.0)
Reconciliation of adjusted operating cash flow to cash flow statement
2023 2022
\u00a3m \u00a3m
Cash generated from operations
439.3
335.8
Principal lease payments
(29.0)
(32.3)
Settlement of transactional derivatives
(8.8)
2.3
Acquisition of property, plant and equipment and non\u2011acquired intangibles
(79.9)
(71.3)
Adjusting items
43.1
52.6
Proceeds from sale of property, plant and equipment
1.6
2.9
Adjusted operating cash flow
366.3
290.0
Reconciliation of cash and cash equivalents
2023 2022
\u00a3m \u00a3m
Cash and cash equivalents in current assets
106.5
133.0
Bank overdraft in current liabilities
(66.3)
(93.8)
Cash and cash equivalents
40.2
39.2
Analysis of net debt
Borrowings and finance
leases due
Cash and after more
cash within one than one Lease Total
equivalents year year creditors net debt
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
At 1 January 2022
29.1
(127.7)
(430.3)
(93.9)
(622.8)
Lease additions, extensions, terminations and payment changes
(41.4)
(41.4)
Lease payments and interest
32.3
32.3
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/(debt) disposed of/acquired
2.5
(21.1)
(123.1)
(141.7)
Cash/(debt) acquired
10.0
10.0
Settlement of currency derivatives hedging balance sheet
(6.3)
(6.3)
Currency translation differences
3.9
(1.3)
(42.0)
(2.7)
(42.1)
At 31 December 2022
39.2
(150.1)
(595.4)
(105.7)
(812.0)
Lease additions, extensions, terminations and payment changes
(24.2)
(24.2)
Lease payments and interest
29.0
29.0
Cash flow excluding settlement of currency derivatives hedging balance
sheet and net cash/debt disposed of/acquired
3.0
99.2
49.6
151.8
Settlement of currency derivatives hedging balance sheet
1.0
1.0
Currency translation differences
(3.0)
3.7
14.4
0.7
15.8
At 31 December 2023
40.2
(47.2)
(531.4)
(100.2)
(638.6)
Undrawn committed facilities The Group has various undrawn committed borrowing facilities. The facilities available at 31 December in respect of which all conditions precedent had been met were as follows:
2023 2022
\u00a3m \u00a3m
Expiring within one year
100.0
\u2013
Expiring between one and two years
75.0
193.5
Expiring after more than two years
125.0
6.0
Total
300.0
199.5
The weighted average life of these facilities is 1.6 years (2022: 0.9 years). Terms and debt repayment schedule The terms and conditions of cash and cash equivalents, outstanding loans, lease liabilities and derivative financial liabilities were as follows:
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Cash and cash equivalents
Floating
106.5
106.5
106.5
Term loan 2024
Floating
(47.2)
(47.2)
(47.2)
US loan notes 2025
1.39%
(130.4)
(134.0)
(1.8)
(132.2)
US loan notes 2026
3.86%
(98.4)
(109.8)
(3.8)
(3.8)
(102.2)
US loan notes 2027
3.92%
(59.1)
(68.3)
(2.3)
(2.3)
(2.3)
(61.4)
US loan notes 2028
1.53%
(69.6)
(75.1)
(1.1)
(1.1)
(1.1)
(1.1)
(70.7)
US loan notes 2029
3.30%
(87.0)
(104.4)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(89.9)
US loan notes 2030
3.40%
(87.0)
(108.0)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(93.0)
Bank overdrafts
Floating
(66.3)
(66.3)
(66.3)
Lease liabilities
Various
(100.2)
(100.2)
(25.2)
(18.6)
(15.7)
(12.2)
(8.5)
(20.0)
Derivative financial liabilities
(10.9)
(10.9)
(10.7)
(0.2)
Total
(649.6)
(717.7)
(57.8)
(164.1)
(127.2)
(80.6)
(85.1)
(202.9)
Effective
interest Carrying Contractual 0 to 1 to 2 to 3 to 4 to 5 years
rate value cash flows <1 year <2 years <3 years <4 years <5 years and over
% \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Cash and cash equivalents
Floating
133.0
133.0
133.0
Revolving credit facilities
Floating
(100.5)
(100.5)
(100.5)
Term loan 2023
Floating
(49.6)
(49.6)
(49.6)
Term loan 2024
Floating
(49.6)
(49.6)
(24.8)
(24.8)
US loan notes 2025
1.39%
(132.7)
(138.1)
(1.8)
(1.8)
(134.5)
US loan notes 2026
3.86%
(103.3)
(119.3)
(4.0)
(4.0)
(4.0)
(107.3)
US loan notes 2027
3.92%
(62.0)
(74.0)
(2.4)
(2.4)
(2.4)
(2.4)
(64.4)
US loan notes 2028
1.53%
(70.8)
(77.4)
(1.1)
(1.1)
(1.1)
(1.1)
(1.1)
(71.9)
US loan notes 2029
3.30%
(88.5)
(108.8)
(2.9)
(2.9)
(2.9)
(2.9)
(2.9)
(94.3)
US loan notes 2030
3.40%
(88.5)
(112.5)
(3.0)
(3.0)
(3.0)
(3.0)
(3.0)
(97.5)
Bank overdrafts
Floating
(93.8)
(93.8)
(93.8)
Lease liabilities
Various
(105.7)
(105.7)
(25.8)
(22.1)
(15.8)
(11.8)
(9.9)
(20.3)
Derivative financial liabilities
(13.8)
(13.8)
(13.4)
(0.4)
Total
(825.8)
(910.1)
(190.1)
(62.5)
(163.7)
(128.5)
(81.3)
(284.0)
Contractual cash flows include undiscounted committed interest cash flows and, where the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the reporting date. Changes in liabilities arising from financing activities The table below details changes in the Group\u2019s liabilities arising from financing activities, including both cash and non\u2011cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group\u2019s consolidated cash flow statement as cash flows from financing activities.
Non-cash changes
31
1 January Financing Acquisition December
2023
cash flows
*
of subsidiary New leases Exchange Other 2023
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2023
Revolving credit facilities
(100.5)
100.1
0.4
\u2013
Term loan 2023 and 2024
(99.2)
48.3
3.7
(47.2)
US loan notes
(545.8)
14.4
(531.4)
Bank overdrafts
(93.8)
27.5
(66.3)
Lease liabilities
(105.7)
31.9
(24.2)
0.7
(2.9)
(100.2)
Total
(945.0)
207.8
(24.2)
19.2
(2.9)
(745.1)
**
Non-cash changes
31
1 January Financing Acquisition December
2022
cash flows
*
of subsidiary New leases Exchange Other 2022
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
2022
Revolving credit facilities
(70.3)
(35.0)
4.8
(100.5)
Term loan 2023 and 2024
(133.3)
24.0
10.1
(99.2)
Acquired loan
(1.8)
1.8
\u2013
US loan notes
(352.6)
(221.9)
28.7
(545.8)
Bank overdrafts
(65.5)
(28.3)
(93.8)
Lease liabilities
(93.9)
35.1
(41.4)
(2.7)
(2.8)
(105.7)
Total
(717.4)
(224.3)
\u2013
(41.4)
40.9
(2.8)
(945.0)
** * Financing cash flows exclude the impact of interest paid. ** Includes IFRS 16 interest payments. Interest-bearing loans and borrowings The Group borrows money from financial institutions in the form of bonds and other financial instruments. These generally have fixed interest rates and are for a fixed term or are drawn from committed borrowing facilities that generally have floating interest rates. For more information about the Group\u2019s exposure to interest rate and foreign currency risk, see Note 18.
2023 2022
\u00a3m \u00a3m
Current liabilities
Unsecured loan notes and other loans
47.2
150.1
Lease liabilities
25.2
25.8
Total
72.4
175.9
Non-current liabilities
Unsecured loan notes and other loans
531.4
595.4
Lease liabilities
75.0
79.9
Total
606.4
675.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-362": { "value": "20. Provisions Accounting policy A provision is recorded instead of a payable when uncertainty exists over the timing and amount of the cash outflow. Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are valued at Management\u2019s best estimate of the amount required to settle the present obligation at the balance sheet date. A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. The recognition of a provision requires estimation. The principal estimates made in respect of the Group\u2019s provisions using the best estimate methodology (with the exception of indemnity provisions as noted below) concern the timing and amount of payments required to: \u2013 cover the costs of known restructuring projects; \u2013 reimburse customers for potential product warranty claims; \u2013 ensure that current and former manufacturing sites meet relevant environmental standards; \u2013 reflect the estimated outcome of ongoing legal disputes; and \u2013 provide against indemnities following the disposal of subsidiaries. Analysis of the Group\u2019s provisions:
Trade Environmental
Restructuring warranties & legal Total
\u00a3m \u00a3m \u00a3m \u00a3m
Current
17.6
9.2
0.4
27.2
Non\u2011current
0.2
8.7
6.4
15.3
At 1 January 2023
17.8
17.9
6.8
42.5
Arising during the year
34.9
2.3
\u2013
45.4
Released during the year
\u2013
(1.5)
(1.5)
(3.0)
Utilised during the year
(31.3)
(3.0)
\u2013
(42.5)
Exchange adjustment
(0.5)
(0.2)
\u2013
(0.7)
At 31 December 2023
20.9
15.5
5.3
41.7
Current
19.9
8.4
0.4
28.7
Non\u2011current
1.0
7.1
4.9
13.0
Restructuring The restructuring provision reflects residual amounts committed but not spent in relation to a number of specific projects that are discussed further in Note 3, where the cost is a reliable estimate of the obligation. The opening balance of \u00a317.8m primarily related to the closure of a factory in Europe within our IMI Precision Engineering division and the Customer First project, which both simplify the structure of the division and ensures the business structure is aligned with our customer base. The utilised balance includes \u00a331.3m of cash settlements. The provision as at 31 December 2023 of \u00a320.9m primarily relates to the expected redundancy payments for facility closures with the majority of the resulting outflow expected during 2024. Trade warranties The Group sells a wide range of highly technical products and whilst they are designed and engineered to a high degree of precision and to customer specifications, there is a risk of products requiring modification, which can lead to warranty claims. Trade warranties are given in the normal course of business and cover a range of periods, typically one to two years, with the expected amounts falling due in less than and greater than one year separately analysed, as above. The provision represents the directors\u2019 best estimate of the Group\u2019s liability based on past experience. Environmental and legal Environmental and legal provisions recognise the Group\u2019s obligation to remediate contaminated land at a number of current and former sites, together with current legal cases for which a settlement is considered probable. Due to the long\u2011term nature of the liabilities, the timescales are uncertain and the provisions represent the directors\u2019 best estimates of these costs. 25. Contingent liabilities A contingent liability is a liability that is not sufficiently certain to qualify for recognition as a provision because significant subjectivity exists regarding its outcome. Group contingent liabilities relating to guarantees in the normal course of business and other items amounted to \u00a3131m (2022: \u00a3132m).", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-332": { "value": "20. Provisions Accounting policy A provision is recorded instead of a payable when uncertainty exists over the timing and amount of the cash outflow. Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are valued at Management\u2019s best estimate of the amount required to settle the present obligation at the balance sheet date. A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. The recognition of a provision requires estimation. The principal estimates made in respect of the Group\u2019s provisions using the best estimate methodology (with the exception of indemnity provisions as noted below) concern the timing and amount of payments required to: \u2013 cover the costs of known restructuring projects; \u2013 reimburse customers for potential product warranty claims; \u2013 ensure that current and former manufacturing sites meet relevant environmental standards; \u2013 reflect the estimated outcome of ongoing legal disputes; and \u2013 provide against indemnities following the disposal of subsidiaries. Analysis of the Group\u2019s provisions:
Trade Environmental
Restructuring warranties & legal Total
\u00a3m \u00a3m \u00a3m \u00a3m
Current
17.6
9.2
0.4
27.2
Non\u2011current
0.2
8.7
6.4
15.3
At 1 January 2023
17.8
17.9
6.8
42.5
Arising during the year
34.9
2.3
\u2013
45.4
Released during the year
\u2013
(1.5)
(1.5)
(3.0)
Utilised during the year
(31.3)
(3.0)
\u2013
(42.5)
Exchange adjustment
(0.5)
(0.2)
\u2013
(0.7)
At 31 December 2023
20.9
15.5
5.3
41.7
Current
19.9
8.4
0.4
28.7
Non\u2011current
1.0
7.1
4.9
13.0
Restructuring The restructuring provision reflects residual amounts committed but not spent in relation to a number of specific projects that are discussed further in Note 3, where the cost is a reliable estimate of the obligation. The opening balance of \u00a317.8m primarily related to the closure of a factory in Europe within our IMI Precision Engineering division and the Customer First project, which both simplify the structure of the division and ensures the business structure is aligned with our customer base. The utilised balance includes \u00a331.3m of cash settlements. The provision as at 31 December 2023 of \u00a320.9m primarily relates to the expected redundancy payments for facility closures with the majority of the resulting outflow expected during 2024.
Trade warranties
The Group sells a wide range of highly technical products and whilst they are designed and engineered to a high degree of precision
and to customer specifications, there is a risk of products requiring modification, which can lead to warranty claims. Trade warranties
are given in the normal course of business and cover a range of periods, typically one to two years, with the expected amounts falling
due in less than and greater than one year separately analysed, as above. The provision represents the directors\u2019 best estimate of the
Group\u2019s liability based on past experience.
Environmental and legal
Environmental and legal provisions recognise the Group\u2019s obligation to remediate contaminated land at a number of current and former
sites, together with current legal cases for which a settlement is considered probable. Due to the long\u2011term nature of the liabilities,
the timescales are uncertain and the provisions represent the directors\u2019 best estimates of these costs.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-410": { "value": "Accounting policy A provision is recorded instead of a payable when uncertainty exists over the timing and amount of the cash outflow. Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are valued at Management\u2019s best estimate of the amount required to settle the present obligation at the balance sheet date. A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. The recognition of a provision requires estimation. The principal estimates made in respect of the Group\u2019s provisions using the best estimate methodology (with the exception of indemnity provisions as noted below) concern the timing and amount of payments required to: \u2013 cover the costs of known restructuring projects; \u2013 reimburse customers for potential product warranty claims; \u2013 ensure that current and former manufacturing sites meet relevant environmental standards; \u2013 reflect the estimated outcome of ongoing legal disputes; and \u2013 provide against indemnities following the disposal of subsidiaries. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-333": { "value": "
21. Trade and other payables
2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
Current
Trade payables
152.0
150.4
Social security and other taxation
33.7
35.1
Accruals
42.6
43.9
Deferred income
0.3
\u2013
Progress billings and advance payments from customers
96.8
71.9
Other payables
144.9
136.7
470.3
438.0
Non-current
Other payables
15.3
7.9
485.6
445.9
\u00a350.9m of the \u00a371.9m progress billings and advance payments from customers held at the prior year\u2011end, were recognised as revenue
during the year. \u00a352.5m of the \u00a373.2m progress billings and advance payments from customers held at 31 December 2021, were
recognised as revenue during the 2022 financial year. Other payables includes costs for services and professional fees invoiced at the
balance sheet date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-381": { "value": "21. Trade and other payables 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
Current
Trade payables
152.0
150.4
Social security and other taxation
33.7
35.1
Accruals
42.6
43.9
Deferred income
0.3
\u2013
Progress billings and advance payments from customers
96.8
71.9
Other payables
144.9
136.7
470.3
438.0
Non-current
Other payables
15.3
7.9
485.6
445.9
\u00a350.9m of the \u00a371.9m progress billings and advance payments from customers held at the prior year\u2011end, were recognised as revenue during the year. \u00a352.5m of the \u00a373.2m progress billings and advance payments from customers held at 31 December 2021, were recognised as revenue during the 2022 financial year. Other payables includes costs for services and professional fees invoiced at the balance sheet date.", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-363": { "value": "21. Trade and other payables 2022 results have been restated to reflect the allocation of goodwill of Heatmiser and CorSolutions, as described in Note 1.
2022
2023 (Restated)
\u00a3m \u00a3m
Current
Trade payables
152.0
150.4
Social security and other taxation
33.7
35.1
Accruals
42.6
43.9
Deferred income
0.3
\u2013
Progress billings and advance payments from customers
96.8
71.9
Other payables
144.9
136.7
470.3
438.0
Non-current
Other payables
15.3
7.9
485.6
445.9
\u00a350.9m of the \u00a371.9m progress billings and advance payments from customers held at the prior year\u2011end, were recognised as revenue during the year. \u00a352.5m of the \u00a373.2m progress billings and advance payments from customers held at 31 December 2021, were recognised as revenue during the 2022 financial year. Other payables includes costs for services and professional fees invoiced at the balance sheet date.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-334": { "value": "
22. Share capital
The movement in the number of ordinary shares of 28 4/7p each issued by IMI plc is as follows:
Number and value of shares
2023
2022
Ordinary shares Ordinary shares
28 4/7p per share 28 4/7p per share
Number (m)
Value (\u00a3m)
Number (m)
Value (\u00a3m)
In issue at the start of the year
275.0
78.6
274.9
78.6
Issued to satisfy employee share schemes
0.1
\u2013
0.1
\u2013
In issue at the end of the year
275.1
78.6
275.0
78.6
All issued share capital at 31 December 2023 and 2022 is fully paid and conveys the same rights.
Share movements in the year
Movements in shares due to share issues and purchases during the year were as follows:
Number of ordinary
shares of 28 4/7p each (million)
Employee
Benefit Trust
Other
Treasury
Total
In issue at 31 December 2022
2.4
258.3
14.3
275.0
New issues to satisfy employee share scheme awards
0.1
0.1
Transfer shares from treasury to employee benefit trust
0.6
(0.6)
\u2013
Shares allocated under employee share schemes
(1.3)
1.3
\u2013
At 31 December 2023
1.7
259.7
13.7
275.1
During the year 0.1m (2022: 0.1m) shares were issued under employee share schemes realising \u00a30.6m (2022: \u00a31.2m).
Employee Benefit Trust
The Employee Benefit Trust made market purchases of a total of nil (2022: 1.4m) shares with an aggregate market value of \u00a3nil
(2022: \u00a320.0m) and a nominal value of \u00a3nil (2022: \u00a30.4m). Associated transaction costs amounted to \u00a3nil (2022: \u00a3nil). On 28 November
2023 0.6m ordinary shares were transferred out of treasury for nil consideration to the IMI Employee Benefit Trust.
Share options exercised in 2023 were settled using the shares in the Group\u2019s Employee Benefit Trust. In 2023, 0.7m (2022: 0.8m) shares
were issued for cash of \u00a3nil (2022: \u00a3nil).
Of the 15.4m (2022: 16.7m) shares held within retained earnings, 1.7m (2022: 2.4m) shares with an aggregate market value of \u00a328.6m
(2022: \u00a330.9m) are held in trust to satisfy employee share scheme vesting.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-335": { "value": "
23. Acquisitions
Acquisitions in 2022
During the year ended 31 December 2022, the Group made three acquisitions, namely:
\u2013 Heatmiser UK Ltd (\u201cHeatmiser\u201d)
\u2013 CorSolutions LLC (\u201cCorSolutions\u201d)
\u2013 Bahr Modultechnik GmbH (\u201cBahr\u201d)
a) Heatmiser UK Ltd (\u201cHeatmiser\u201d)
Fair value at
23 December
2022
\u00a3m
Other intangible assets
46.2
Property, plant and equipment
0.2
Inventories
7.4
Trade and other receivables
5.6
Cash and cash equivalents
7.4
Trade and other payables
(4.7)
Current taxation
(0.6)
Deferred taxation
(11.6)
Total identified net assets at fair value
49.9
Goodwill arising on acquisition
67.6
Purchase consideration
117.5
On 23 December 2022 the Group acquired 100% of the share capital, and associated voting rights, of Heatmiser UK Ltd (\u201cHeatmiser\u201d)
for initial cash consideration of \u00a3117.5m, with up to a further \u00a38.0m payable based on future financial performance. Heatmiser is a
leading UK smart thermostatic control manufacturer and is based in Blackburn, UK.
This acquisition has been accounted for as a business combination and the accounting, including the purchase price allocation,
has been finalised during the year. After updating the assumptions, deferred consideration recognised is \u00a3nil. The goodwill recognised
above includes certain intangible assets that cannot be separately identified and measured due to their nature. This includes control
over the acquired business, the skills and experience of the assembled workforce, the increase in scale, synergies and the future growth
opportunities that the businesses provide to the Group\u2019s operations.
Acquisition costs of \u00a32.0m were recognised in the income statement in 2022.
b) CorSolutions LLC (\u201cCorSolutions\u201d)
Fair value at
27 October
2022
\u00a3m
Other intangible assets
8.8
Inventories
0.6
Deferred taxation
\u2013
Total identified net assets at fair value
9.4
Goodwill arising on acquisition
\u2013
Total consideration
9.4
Of which relates to deferred consideration
1.3
Purchase consideration
8.1
On 27 October 2022 the Group acquired 100% of the share capital, and associated voting rights, of CorSolutions LLC (\u201cCorSolutions\u201d)
for initial cash consideration of \u00a37.5m, an additional payment of \u00a30.6m made in 2023 as part of the closing consideration, with up to
a further \u00a33.6m payable based on future financial performance. CorSolutions is a leading innovator in micro\u2011fluid flow control and is
based in Ithaca, New York.
This acquisition was accounted for as a business combination. The acquisition accounting has been finalised and changes were made
to the provisional fair value amounts recognised in the 2022 Annual Report in respect of the deferred consideration and identified assets
acquired and liabilities assumed. This resulted in a decrease of \u00a31.7m from the 2022 Annual Report, bringing the goodwill position
to \u00a3nil. The expected earn\u2011out payout has decreased from \u00a33.6m as at 31 December 2022 to \u00a31.3m.
c) Bahr Modultechnik GmbH (\u201cBahr\u201d)
On 9 June 2022 the Group acquired 100% of the share capital, and associated voting rights, of Bahr Modultechnik GmbH (\u201cBahr\u201d) for
cash consideration of \u00a388.3m. Bahr is a leading provider of highly configured modular electric linear motion systems, based on a broad
portfolio of specialist components and is based in Luhden, Germany.
This acquisition was accounted for as a business combination. Our accounting has been finalised and there are no changes to the
provisional fair value amounts recognised in the 2022 Annual Report in respect of the identified assets acquired and liabilities assumed.
d) Adjustments arising on prior year acquisitions
In finalising the acquisition accounting for the prior year acquisitions of CorSolutions and Heatmiser, an adjustment of \u00a336.3m was
made to include acquired intangibles and corresponding deferred tax, adjust working capital and other payables. This resulted in a
decrease in goodwill of \u00a336.3m.
The adjustment is material and as such the comparative balance sheet has been restated, as follows:
Allocation of
Heatmiser and
Balance Sheet CorSolutions Restated
(as Reported) goodwill Balance Sheet
2022 2022 2022
\u00a3m \u00a3m \u00a3m
Non-current assets
Goodwill
733.7
(36.3)
697.4
Other intangible assets
270.5
46.2
316.7
Deferred tax assets
24.5
(0.3)
24.2
Current assets
Inventories
416.3
1.4
417.7
Trade and other receivables
484.9
(1.0)
483.9
Current tax
2.0
(0.1)
1.9
Total assets
2,519.9
9.9
2,529.8
Non-current liabilities
Deferred tax liabilities
(47.9)
(11.3)
(59.2)
Other payables
(9.9)
2.0
(7.9)
Current liabilities
Trade and other payables
(437.7)
(0.3)
(438.0)
Current tax
(70.1)
(0.3)
(70.4)
Total liabilities
(1,614.3)
(9.9)
(1,624.2)
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-336": { "value": "
24. Disposals
Disposals in 2023
The Group disposed of its Dutch subsidiary, IMI Aero\u2011Dynamiek BV, on 2 October 2023 for proceeds of \u00a30.8m, resulting in a gain
on disposal for the Group of \u00a30.7m after disposing of \u00a3nil of net assets and incurring \u00a30.3m of associated disposal costs.
This disposal is not disclosed as a discontinued item because it did not represent a separate major line of business.
2 October
2023
\u00a3m
Sale consideration
0.8
Net assets disposed
\u2013
Costs of disposal
(0.3)
Foreign exchange gain reclassified on disposal
0.2
Gain on disposal
0.7
Net cash flow arising on disposal
Sale consideration
0.8
Cash costs of disposal
(0.3)
Net cash flow arising on disposal of operations
0.5
Disposals in 2022
The Group disposed of its Russian subsidiary, IMI International LLC, on 27 May 2022 for proceeds of \u00a3nil resulting in a loss on disposal
for the Group of \u00a34.8m after disposing of \u00a33.3m of net assets and incurring \u00a30.9m of associated disposal costs. In addition, the exit
resulted in a \u00a34.2m impairment of assets related to Russian contracts.
The exit from Russia was presented in the income statement as an adjusting item in 2022 but it was not disclosed as a discontinued item
because it did not represent a separate major line of business.
27 May
2022
\u00a3m
Sale consideration
\u2013
Net assets disposed
(3.3)
Costs of disposal
(0.9)
Foreign exchange loss reclassified on disposal
(0.6)
Loss on disposal
(4.8)
Net cash flow arising on disposal
Sale consideration
\u2013
Cash costs of disposal
(0.9)
Net cash flow arising on disposal of operations
(0.9)
", "dimensions": { "concept": "imiplc:DisclosureOfDisposals", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-337": { "value": "
25. Contingent liabilities
A contingent liability is a liability that is not sufficiently certain to qualify for recognition as a provision because significant subjectivity
exists regarding its outcome.
Group contingent liabilities relating to guarantees in the normal course of business and other items amounted to \u00a3131m (2022: \u00a3132m).
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-338": { "value": "
26. Related party transactions
Related parties include the key management personnel. The Board, including the non\u2011executive directors are considered to be the key
management personnel of the Group.
2023 2022
\u00a3m \u00a3m
Short\u2011term employee benefits*
4.8
3.5
Share\u2011based payments
2.0
2.2
Total
6.8
5.7
**
* Short\u2011term employee benefits comprise salary, including employers\u2019 social contributions, benefits earned during the year and bonuses awarded for the year.
** For details of the shared\u2011based payment charge for key management personnel, see Note 6.
Transactions with associated companies
2023 2022
\u00a3m \u00a3m
Sales to associated companies
0.8
\u2013
Purchases from associated companies
\u2013
\u2013
Total
0.8
\u2013
Accounts receivable
1.2
\u2013
Accounts payable
\u2013
\u2013
There are no other related party transactions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-364": { "value": "26. Related party transactions Related parties include the key management personnel. The Board, including the non\u2011executive directors are considered to be the key management personnel of the Group.
2023 2022
\u00a3m \u00a3m
Short\u2011term employee benefits*
4.8
3.5
Share\u2011based payments
2.0
2.2
Total
6.8
5.7
** * Short\u2011term employee benefits comprise salary, including employers\u2019 social contributions, benefits earned during the year and bonuses awarded for the year. ** For details of the shared\u2011based payment charge for key management personnel, see Note 6. Transactions with associated companies
2023 2022
\u00a3m \u00a3m
Sales to associated companies
0.8
\u2013
Purchases from associated companies
\u2013
\u2013
Total
0.8
\u2013
Accounts receivable
1.2
\u2013
Accounts payable
\u2013
\u2013
There are no other related party transactions.", "dimensions": { "concept": "ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory", "language": "en", "entity": "scheme:2138002W9Q21PF751R30", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "fact-365": { "value": "
27. Subsequent events
Events that occur in the period between 31 December and the date of approval of the Annual Report can be categorised as
adjusting or non\u2011adjusting depending on whether the condition existed at 31 December. If the event is an adjusting event, then an
adjustment to the results is made. If a non\u2011adjusting event after the year\u2011end is material, non\u2011disclosure could influence decisions
that readers of the financial statements make. Accordingly, for each material non\u2011adjusting event after the reporting period we
disclose the nature of the event and an estimate of its financial effect, or a statement that such an estimate cannot be made.
There were no adjusting or non\u2011adjusting subsequent events after the balance sheet date of 31 December 2023.
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