Annual report
and accounts 2023
Introduction
A.G. Barr is a UK-based branded multi beverage
business focused on growth and the creation of
long-term shareholder value.
Ambitious and value driven, with strong consumer
focus, we are brand owners and builders, offering
a diverse and differentiated portfolio of brands
that people love.
Established over 145 years ago in Scotland, now
operating across the UK and with export markets
throughout the world, we strive to grow our business
both organically and through targeted acquisition.
Employing over 1,000 people across four business units
and ten UK locations, we are proud to be a responsible
business that listens to our consumers, builds lasting
customer relationships, takes care of our people, values
diversity, gives something back to our communities and
works to minimise our environmental impact.
For more information visit our website agbarr.co.uk
Our locations
Offices
Cumbernauld – Head Office; Bolton (Barr Soft
Drinks); Camden (FUNKIN); Deptford (MOMA);
Leeds (Boost)
Barr Soft Drinks
Factories
Cumbernauld; Milton Keynes; Forfar
Distribution centres
Cumbernauld; Milton Keynes
Distribution depots
Dagenham; Moston; Wednesbury
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Strategic Report Corporate Governance Accounts
In this report
Strategic Report
Purpose, values and culture 1
2023 highlights 2
Our investment case 3
Our business and brands 4
Chair’s introduction 6
Our business model 8
Our strategy 10
Financial key performance indicators 11
Chief Executive’s review 12
Our strategy in action 18
Responsibility report 30
Non-financial key performance indicators 32
Financial review 56
Risk management 62
Corporate Governance
Board of Directors 70
Corporate Governance Report 72
Audit and Risk Committee Report 85
Directors’ Remuneration Report 89
Directors’ Report 122
Statement of Directors’ Responsibilities 128
Accounts
Independent Auditor’s Report to the
members of A.G. BARR p.l.c. 129
Consolidated Income Statement 138
Statements of Financial Position 139
Statement of Comprehensive Income 140
Statement of Changes in Equity 141
Cash Flow Statements 143
Notes to the Accounts 144
Glossary 199
Reconciliation of Non-GAAP Measures 201
Notice of Annual General Meeting 205
Corporate Governance
Our section 172(1) statement describing how the
directors have had regard to the matters set out in
section 172(1)(a) to (f) when performing their duties
under section 172 of the Companies Act 2006 is set
out in the Corporate Governance Report on pages
60 to 71 and is incorporated by reference into this
Strategic Report.
Acting with
integrity
Supporting
healthy living
Respecting the
environment
Giving back
Purpose, values and culture
Our business purpose has always been
underpinned by strong values. We
believe that how we act reflects who
and what we are. We strive to behave
responsibly across our four core values:
For over 145 years we have developed
a positive, results-driven and supportive
culture. As we grow our business
organically and through acquisition,
it is important that we retain the
entrepreneurial spirit of the new and
exciting additions to our Group, while
also ensuring that we continue to value
and nurture the unique essence of
what makes A.G. Barr a great business
to be part of.
For more information on our people, culture
and employee values see pages 34 to 38
Our purpose is:
To create value, with values –
for our shareholders, consumers,
customers and for society as a whole
We do this by:
Building great brands
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A.G. BARR p.l.c. Annual Report and Accounts 2023
2023 highlights
Revenue
£317.6m
+18.2%
Basic earnings per share (EPS)
30.47p
+21.4%
Women in Leadership
38%
Adjusted profit before tax*
£43.5m
+13.3%
Full year dividend*
13.1p
No Time To Waste Environmental
Sustainability Programme
100%
Science-based targets approved
and our first 100% recycled plastic
bottles in market.
Employee engagement
75%
Acquisitions
during the year
2
Boost drinks and MOMA.
For more information on our Non-financial KPIs see page 32
* Items marked with an asterisk are non-GAAP measures. Definitions and relevant
reconciliations are provided in the Glossary on pages 199 to 204.
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Strategic Report
Corporate Governance
Accounts
FIND OUT MORE ABOUT OUR
COMPETITIVE ADVANTAGES
Our business model can be found
on pages 8 and 9
0404
Disciplined
capital allocation
0505
Responsible
and sustainable
0606
Financial
strength
Our investment case
0101
Ambitious with
value-driven strategy
0202
Strong core brands with
challenger mentality
0303
Clear growth
opportunities
Why
invest
in us?
4
A.G. BARR p.l.c. Annual Report and Accounts 2023
Number of brands
16
Business units
4
Our business and brands
Barr Soft Drinks
At our core is the Barr Soft Drinks business unit,
home to some of the UK’s most loved soft
drinks brands.
Whether it’s the iconic IRN-BRU, launched in 1901
and still going strong today, the vibrant RUBICON
fruit based brand or the unique range of BARR
flavours, Barr Soft Drinks’ brands offer people a
choice of great tasting products and bring exciting
innovation to the market, available across
multiple channels.
We are brand owners and builders, offering a diverse
and differentiated portfolio of brands that people love.
Established
1875
Employees
922
Our FUNKIN business unit operates within the exciting
and growing cocktail market.
Real fruit means authentic taste and FUNKIN believes
that to shake the best cocktail you have to use the best
ingredients. That’s why they use the best fruit to create
their premium products, famous amongst top
bartenders. Now the UK’s number 1 cocktail brand
FUNKIN provides innovative and unique purées, syrups,
mixers and ready to drink cocktails, for behind the bar
and at home. Making ordinary moments extraordinary.
FUNKIN
Established
1999
Acquired
2015
Employees
42
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Strategic Report Corporate Governance Accounts
Boost
Our BOOST business is always looking for new trends
and to appeal to the evolving tastes of drinkers.
Proud to offer an exciting range of flavours across
several functional drinks categories – Energy
Stimulation, Sport and Iced Coffee – BOOST enjoys
a very strong position within the UK independent retail
channel and has an exclusive sales and distribution
partnership with the fruit drinks brand RIO.
Established
2006
Acquired
2022
Employees
34
MOMA uses a blend of the highest quality
wholegrain jumbo oats that give its oat drinks a
full-bodied flavour and its porridge a distinctively
creamy texture.
MOMA believes in crafting simple, natural
ingredients into food and drink that tastes awesome,
because a little extra skill and care turns ‘good for
you’ into ‘great’.
UK Sites
10
MOMA
Established
2006
Acquired
2022
Employees
16
Number of employees
1,014
INFORMATION ON OUR FULL
PORTFOLIO OF BRANDS
can be found at www.agbarr.co.uk/our-brands
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Chair’s introduction
I am incredibly proud to have taken
on the role of Chair at A.G. Barr. I am
delighted to report that the business
has made excellent progress in pursuit
of both its strategic objectives and its
short-term operating performance.
Mark Allen OBE
Chair
Overview
Following the challenges of the global pandemic we
had all hoped for a period of more stability and perhaps
some return to normality, however the tragic events in
Ukraine have led directly to a significant level of human
suffering and we have all felt a sense of collective grief.
We have also seen the rise of global economic
uncertainty, rampant inflation and the resultant cost
of living crisis impacting consumers and businesses.
Against this difficult backdrop the whole team across
the A.G. Barr Group has delivered an excellent
performance. Reported revenue grew by 18.2%
year-on-year and we finished the year with adjusted
profit before tax* of £43.5m, 13.3% ahead of the
prior year.
Highlights during the year included:
• Strong growth across our soft drinks portfolio
as consumers return to more established
purchasing patterns, post pandemic
• Innovation and growth in cocktails across all
channels as FUNKIN consolidated its position as the
Number 1 cocktail brand in the UK take home market
• The strength of our balance sheet, our clear strategy
and scalable business model have supported the
exciting acquisition of Boost Drinks and the early
completion of our planned acquisition of the
remaining equity in MOMA Foods
The entire A.G. Barr team has remained focused on
delivering our brand building strategy, investing for
growth and creating a business we are proud of.
Dividend
The Board is pleased to maintain its progressive
dividend policy and recommends a final dividend
of 10.6p per share to give a proposed total dividend
for the full year of 13.1p per share. The final dividend
is payable on 9 June 2023 to shareholders on the
Register of Members at the close of business on
12 May 2023. The ex-dividend date is 11 May 2023.
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Strategic Report Corporate Governance Accounts
2023
30.47p
2022
25.09p
+21.4%
2023
13.1p
2022
12.0p
+9.2%
Board
In the reporting period we said a fond farewell to John
Nicolson who I succeeded in the role of Chair in March
2022. It has been a pleasure to transition into the role
working alongside our diverse, experienced and
capable Board and management team.
Succession planning is an important Board
responsibility and with that in mind I can confirm that
after over 62 years with the business, Robin Barr has
informed me of his intention to step down from the
Board at the Annual General Meeting in 2023. Robin
epitomises all that is great in UK corporate leadership
– knowledge, honesty, balance, commitment and
capability, not to mention experience and a great sense
of humour. We will all miss Robin’s counsel and
camaraderie but after 58 years on the Board we can
understand his decision. I am delighted to announce
that Julie Barr will relinquish her Company Secretarial
duties to join the Board as a Non-Executive Director.
Julie, who has been with the Company for 19 years,
and is a qualified corporate lawyer, will stand for
election at the Annual General Meeting in May.
We will continue to seek to strengthen the capability,
diversity and experience of our Board as we grow and
develop the Company.
Responsibility
A.G. Barr has always put responsible behaviour at the
heart of its business and the last year has seen further
excellent progress across our core areas of focus.
Our environmental sustainability programme No Time
To Waste has continued to drive innovative thinking and
actions across a wide range of areas. We have now
agreed and validated our science-based targets as we
head towards our net-zero ambition. We have increased
our use of more sustainable packaging and are taking
a very active role in the run up to the launch of the
Deposit Return Scheme (DRS) in Scotland, planned for
August 2023.
People and culture
I believe that A.G. Barr has a unique and positive culture
which although longstanding, is embodied, nurtured
and developed by the executive leadership team. With
high levels of colleague engagement across the Group,
each operating business has its own unique feel, but
are all connected by some shared A.G. Barr cultural
characteristics – a challenger mentality, a people first
approach and a drive for performance.
Whilst we have performed well as a Group, in these
challenging times we recognise that many of our team
are facing a period of difficulty and where possible we
have taken steps to support our colleagues. Where
appropriate we have tried to make our working patterns
as flexible as possible. We continue to provide mental
health support to those who want our help and made
two special cost of living payments during the course
of the year to those in our business who need it most.
We are equally as proud of our values and behaviours
as we are of our performance.
Prospects
There remain many headwinds to consider as we look
forward, however I am confident that the brand
momentum, quality and strategy of the business will
continue to deliver superior returns to shareholders for
many years to come.
Mark Allen OBE
Chair
28 March 2023
Creating value
Basic Earnings Per Share
Reported profit attributable to equity
holders divided by weighted average
number of shares in issue.
Dividend
Total dividend declared for the full year
excluding any special dividend.
* Items marked with an asterisk are non-GAAP measures. Definitions and relevant
reconciliations are provided in the Glossary on pages 199 to 204.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
First and foremost we build great brands. We also
believe that how we operate sets us apart from the
competition. With more than 145 years of history and
heritage, coupled with a track record of successful
acquisitions, we believe we have a unique blend of
experience and entrepreneurialism – all of which is
built on our longstanding desire to act responsibly.
Our people
1,014
We are now a bigger Group with
four business units, each with its own
distinct team and its own unique
culture. However what we all share,
across the A.G. Barr Group, is a positive
challenger mentality and a focus
on results. Whether it’s our newer
colleagues at MOMA or our
experienced team at Barr Soft Drinks,
we have a passion for our products
and a belief that we can succeed,
even when positioned beside global
competitors. We work collaboratively,
enjoy high levels of employee
engagement and are proud of our
talented and committed teams who
are central to our success.
Our brands
16
Our brands are as special as our people.
From the unique taste of IRN-BRU to
the premium bar quality of our FUNKIN
cocktails, we pride ourselves on our
diverse and differentiated portfolio
of branded products that meet the
changing needs of our consumers and
offer great choice and value. We listen
carefully to our consumers and, as
brand owners, we are able to develop
and innovate across our portfolio with
creativity, pace and insight.
Our fleet/network
65
With our own fleet of more than
65 vehicles, as well as long-standing
relationships with our key distribution
partners, our business model supports
our drive to deliver great service to all our
customers, from the biggest food service
customer to the smallest local shop.
Our direct suppliers
70+
We work in partnership with our
key suppliers to ensure high quality
products that are sourced and
manufactured in a fair, ethical and
environmentally responsible way.
Our UK locations
10
We operate across ten UK sites – our
Cumbernauld site is home to our
Head Office, as well as Barr Soft Drinks
manufacturing, warehousing and sales
offices, and across the rest of the UK
we have offices at Bolton, Camden,
Leeds and Deptford, two further
manufacturing facilities at Milton
Keynes and Forfar, and three regional
distribution depots at Moston,
Wednesbury and Dagenham.
We make…
We pride ourselves on our safe and effective
manufacturing capabilities. We produce high quality
products across our well-invested and efficient Barr
Soft Drinks production sites in Cumbernauld,
Forfar and Milton Keynes. With glass, carton,
plastic and can capability, we produce over 99% of
Barr Soft Drinks’ products in-house. We also now
produce FUNKIN’s unique nitro-infused ready to
drink cocktails in cans at Milton Keynes. We source
all our raw materials, with a particular competency
in exotic fruit, develop our own recipes and design
all our packaging – all underpinned with the aim of
reducing our environmental impact and delivering
continuous improvement.
We move…
Operating across multiple
routes to market, we have a
well established and efficient
distribution network servicing
our diverse sales channels.
Our Barr Direct channel
in particular sets us apart,
by offering a tailored and
personal direct to store service
to thousands of independent
retailers across the UK.
Our business model
WHAT WE DO
We behave
responsibly…
FUNKIN’s ready to drink cans now
produced at Milton Keynes.
Underpinning everything we do is our belief that how we
act reflects who we are. We take our responsibilities seriously
and continuously strive to be a sustainable and responsible
business that listens to our consumers, takes care of our
people, values diversity, works to minimise our environmental
impact and gives something back to the communities we
serve. We have an important role to play in the transition
to a low carbon and climate-resilient economy and this is
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Strategic Report
Corporate Governance
Accounts
Shareholders
£13.9m of dividends paid during
the year. £17.0m re-invested in
long-term business growth
through annual capital expenditure
Dividends paid
£13.9m
Suppliers and customers
Directly contracted with more
than 70 suppliers with an annual
spend of over £100m while
working closely with thousands
of customers to co-create joint
business plans
Suppliers
70+
Employees
£44.2m paid in salaries and
wages to our employees
across the UK
Salaries paid
£44.2m
UK economy and communities
With 96% of our revenue
generated in the UK, and through
our £6.8m corporation tax and
£5.4m national insurance
payments to the government,
we continue to play our part in
growing the UK economy while
also donating over £90k to good
causes across our communities
Our business model has proven successful for more
than 145 years and continues to create and deliver
value, with values, to a wide range of stakeholders.
We market…
From IRN-BRU’s signature style of
maverick adverts to Boost’s connection
with sporting activity, when it comes to
marketing, innovating and building our
brands we like to have some fun and to
appeal to the widest possible range of
consumers. Whether through mainstream
advertising, digital and social media,
sponsorship or supporting local
community events, we use our creativity
and consumer insight to deliver distinctive
and memorable brand building.
We sell…
Building long-lasting relationships
with our customers across all our
key markets is fundamental to our
business. Whether it’s a large food
retailer, a wholesaler, a regional
restaurant group or a local
independent retailer, we work
collaboratively with all our customers
to understand their businesses and
find winning consumer propositions
in a practical and profitable way.
WE CREATE VALUE, WITH VALUES…
Years of responsible actions
145+
becoming an increasingly important and integral part of our
overall A.G. Barr business model.
Our responsible behaviour also encompasses our
management of risk, ensuring that we are thinking ahead and
taking mitigating actions to minimise any potential impact on
our business. We have a robust risk management framework in
place that is embedded across the business, allowing a wide
range of employees at different levels to contribute to our risk
assessment and assurance processes. In the past 12 months
we have taken action in response to a number of identified risks,
including making additional payments to some employees in
the context of the UK’s cost of living crisis, as well as ceasing
trading with customers in Russia at the onset of the war in Ukraine.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Our overarching purpose is to create value, with values – for our
shareholders, consumers, customers and for society as a whole.
We do this by building great brands.
Our strategic priorities bring this purpose
to life and set out the steps we take to build
a great business with great brands.
Consumer insight drives our business.
Consumer preferences are changing and
we take the time to listen, to understand
and to respond proactively to ensure our
portfolio of brands constantly develops
to meet our consumers’ changing needs.
At an A.G. Barr Group level this insight is
a key factor in how we identify potential
acquisition opportunities. We monitor
consumer trends closely, specifically
in relation to fast moving packaged
consumer goods, specifically identifying
developments in the beverage sector
as well as emerging or high growth
categories of interest.
At a business unit level these consumer
trends underpin our approach to
innovation, including product, packaging
and ingredients, as well as our consumer
engagement and marketing activities.
In the past 12 months we have placed
a particular focus on areas such as
digital sales and marketing as well as
using our brands to raise awareness
of our sustainability progress.
For more information on our Strategy in Action see pages 18 to 29
We are brand owners and builders,
growing our diverse and differentiated
brand portfolio both organically and
through acquisition.
For our existing portfolio of powerful
brands we do this in a number of ways
– we innovate, we grow brand awareness
and loyalty through consumer
engagement activity, and we build our
product distribution through effective
sales execution with customers.
We are also ambitious, with a proven track
record of successfully acquiring new brands.
Our core competency lies in soft drinks,
however we have broadened our brand
portfolio in recent years with a particular
focus across the multi-beverage landscape.
We continually strive for greater
effectiveness across our business,
investing for growth and efficiency,
while also ensuring strong financial
controls are in place.
From investment in new software
platforms to an increasing focus on digital
development and automation, as our
business develops, we are committed to
driving continuous improvement across
our processes and infrastructure.
And in our Barr Soft Drinks business unit
we have a well-invested asset base where
we drive operational improvements and
flexibility through our expansionary capital
investment programmes, equipping us
with some of the industry’s most efficient
operational capability.
Building and maintaining long-lasting
trust and successful relationships is central
to our business and always has been. Our
responsible behaviour over the last 145
years has created a firm foundation, upon
which we want to build further.
Being a trusted business that acts with
integrity is fundamental to our stakeholder
relationships – from our consumers
and customers to our suppliers and
communities. Equally, as the world around
us changes, with climate change in
particular becoming increasingly more
pressing, our strategic choices are more
than ever informed and supported by our
desire to do the right thing and to play our
part in addressing the key issues facing
the world and society.
We have a clear strategy and quantifiable
goals across our four responsibility
commitments – Acting with Integrity,
Respecting the Environment, Supporting
Healthy Living and Giving Back. Whether
it’s our increased use of recycled materials,
our increasing number of women in
leadership roles or our charitable giving,
we are committed to delivering against
our long-term responsibility strategy.
Connecting with
consumers
Building
brands
Driving efficiency
Building
trust
Our strategy
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Strategic Report Corporate Governance Accounts
£43.4m
£35.9m
2023
2022
£268.6m
£317.6m
2023
2022
14.9%
13.6%
2023
2022
25.09 p
30.47p
2023
2022
44.2%
40.3%
2023
2022
19.1%
17.1%
2023
2022
12.0p
13.1p2023
2022
£38.4m
£43.5m2023
2022
19.9%
18.0%2023
2022
Net cash from operating activities
£35.9m
(17.3%)
Gross margin*
40.3%
(390)bps
Adjusted profit before tax*
£43.5m
13.3%
Return on capital employed*
18.0%
(191)bps
Basic earnings per share
30.47p
21.4%
Full year dividend per share*
13.1p
9.2%
Revenue
£317.6m
18.2%
Adjusted operating margin*
13.6%
(130)bps
Adjusted EBITDA margin*
17.1%
(204)bps
Financial key performance indicators
Net cash from operating activities is defined as the cash
generated in the ongoing regular business activities in
the year.
Reported gross profit divided by revenue. Adjusted profit before tax is reported profit before tax after
adjusting items.
Adjusted operating profit and before the deduction
of interest and taxation, divided by adjusted revenue.
EBITDA (defined as adjusted operating profit before
depreciation and amortisation) divided by adjusted revenue.
Reported profit before tax as a percentage of invested capital.
Invested capital is defined as year end non-current plus current
assets less current liabilities excluding all balances relating to
any provisions, financial instruments, interest-bearing liabilities
and cash or cash equivalents.
* Items marked with an asterisk are non-GAAP measures.
Definitions and relevant reconciliations are provided in the
Glossary on pages 199 to 204.
Reported profit attributable to equity holders divided
by weighted average number of shares in issue.
Total dividend declared for the full year excluding
any special dividend.
The increase in value of revenue recorded relative
to the prior year.
NON-FINANCIAL KPIs
Can be found on page 32
CEO AND FINANCIAL REVIEWS
Can be found on pages 12 and 56
12
A.G. BARR p.l.c. Annual Report and Accounts 2023
Chief Executive’s review
I am pleased to report our results for
the 52 weeks ended 29 January 2023.
Over the past 12 months we delivered
an excellent financial performance and
made significant progress across our
strategic objectives. We emerged from
the pandemic period a stronger
business and I would like to thank
all the teams across the business,
as well as our partners,
suppliers and customers,
for their support.
Overview
The following financial metrics quantify our strong
performance:
• Reported revenue £317.6m (2022: £268.6m)
• Adjusted profit before tax* £43.5m (2022: £38.4m)
• Reported profit before tax £44.4m (2022: £42.2m)
• Adjusted operating margin* 13.6% (2022: 14.9%)
• Net cash at bank* £52.9m (2022: £68.4m)
• Basic earnings per share 30.47p (2022: 25.09p)
Strategic objectives
Our overarching purpose – to create value with values
– remained central to A.G. Barr across the year,
underpinned by our consistent strategic priorities:
• connecting with consumers
• building brands
• driving efficiency
• building trust
We continued to invest in our brands, operations and
people, driving innovation and delivering strong organic
growth across all our business units. We are proud to
have delivered this growth responsibly.
Our organic growth ambition remains as strong as ever,
as is our desire to acquire high quality brands with
strong future growth potential. This was evidenced
in 2022 by the completion of both the Boost Drinks
Holdings Limited acquisition and the early completion
of full ownership of the MOMA business. Operating
in the high growth functional beverage and oat milk
categories, both businesses are exciting additions to
the A.G. Barr Group.
As our portfolio grows, so does our opportunity
to increase our connection and engagement with
consumers. By entering different markets, supporting
different consumption occasions and appealing to
different consumers, we are increasing the long-term
growth potential for the Group as a whole.
While the economic uncertainty being felt across the
UK has the potential to stifle industry and business
progress, we believe that both our brand and financial
strengths ensure we are well positioned to invest
through the economic cycle. By driving operational
Roger White
Chief Executive
Strategic Report Corporate Governance Accounts
13
efficiency from the bottom up, and by providing
great brands that offer real value to consumers, we
are in a strong position to accelerate our growth
both organically and through further acquisition,
in turn creating long-term shareholder value.
Soft drinks market
The UK’s high cost inflation is reflected across the total
UK soft drinks retail market, which saw value increase
by 8.8% while volumes fell by 2.2%. The impact of
higher prices and lower promotional activity, coupled
with the associated impact on volume and general
consumer caution, are mirrored across Carbonates
and Stills, both of which increased in value and
experienced lower volume. Taking a longer term view,
and comparing to the pre-pandemic soft drinks market
in 2019, soft drinks volumes have grown by 1.5%, with
carbonates the key contributor, growing by 5% over the
same period despite the significant headwinds created
by the pandemic in particular.
At a subcategory level we continue to see some of
the effects of the pandemic unwinding across the
soft drinks retail market. Lemonade, Mixers, Dilutes and
Fruit Juice have declined in both value and volume,
reflecting the normalisation of at home consumption
and the steady recovery of the on-trade hospitality
sector. By contrast, Flavoured Carbonates, Sports and
Energy are increasing in volume, supported by the
recovery of the “drink now” channel.
Against this backdrop Barr Soft Drinks has enjoyed
particularly strong market share value gains in England
and Wales balanced by a more subdued performance in
Scotland which did not benefit from the better summer
weather experienced in much of the rest of the UK.
The Boost business, which became part of the Group
in December 2022, has performed exceptionally well
within the total soft drinks market across the past 12
months, with a double digit increase in its value and
volume share.
Cocktail market
The hospitality sector continued its recovery across
the year despite experiencing significant challenges.
The cocktail category in particular has proven its
strength and increasing popularity, with cocktails in the
on-trade now worth £686m, an increase of more than
13% versus 2019 pre-pandemic levels. With 9.6 million
UK consumers now drinking cocktails out of home,
1.6 million of whom joined the category since 2019,
cocktails remain a significant growth opportunity for
the hospitality sector.
The growth momentum of the ready to drink (RTD)
category in the off-trade has continued, with consumers
increasingly seeking to replicate the bar quality experience
at home. The RTD market has grown to over £500m
and continues to be driven by RTD cocktails which
have grown by more than 20% in value terms over the
past 12 months.
Within this market we are delighted to report that
FUNKIN remains the UK’s Number 1 RTD cocktail
brand, the UK’s fastest growing Top 10 RTD brand
and is now a Top 5 RTD Grocery brand.
(Sources: CGA Mixed Drinks Report Q3 2022; Nielsen Pre-Mixed
Alcoholic Drinks Total Coverage Data MAT 14/01/2023).
STRATEGY IN ACTION
can be found on pages 18 to 29
Source: IRI Marketplace Total Soft Drinks Market 52 weeks to 28 January 2023)
2023
£317.6m
2022
£268.6m
+18.2%
2023
£43.5m
2022
£38.4m
+13.3%
Our financial
performance
Revenue
The increase in value of revenue
recorded relative to the prior year.
Adjusted profit before tax
Adjusted profit before tax is reported
profit before tax after adjusting items.
A.G. BARR p.l.c. Annual Report and Accounts 2023
14
Plant-based milk market
The value of the total plant-based milk market fell by
1.4% in the year to September 2022, driven largely by a
decline in soya, nut and coconut milks. In contrast, oat
milk continues to grow, up 13.3% to £166m in the same
period. One in five UK households now purchases oat
milk, with 750,000 more households adding it to their
shopping baskets in the last 12 months.
As a challenger oat milk brand, the MOMA business has
had a particularly strong year, growing by 41% on a year
on year basis, well ahead of the category, driven by
increased sales of its ambient range and distribution
gains for its new chilled range that launched in the
Spring of 2022.
(Sources: Kantar UK Market 52 weeks ending 04/09/2022; Kantar
UK Household Penetration 52 weeks ending 02/10/2022)
Chief Executive’s review continued
Connecting with consumers
The connection we make with consumers is central
to our strategy. Over the past 12 months we have
continued to invest in a wide range of consumer
marketing, promotion and communication
programmes across our business units and brands.
With a growing consumer base, covering a broad
demographic and geographic spread, we have evolved
our engagement approach considerably over recent
years. Social and digital media play an increasingly
important role, as does our commitment to bringing
a pipeline of great tasting, innovative new products to
market, in new pack formats which unlock new drinker
occasions. More traditional media channels of TV,
print and outdoor remain an important part of our
marketing mix.
The acceleration of the investment in our portfolio
demonstrates the importance we place on supporting
the long-term development of our core brands. In
March 2022 we launched our new IRN-BRU “Taste
Debate” campaign on TV, digital and social media to
ensure our biggest brand remains fun, fresh and
relevant. We also invested in FUNKIN, which launched
its biggest ever brand investment with the highly
successful “It’s FUNKIN Time” campaign which ran
throughout the key trading periods of summer and
Christmas. The FUNKIN brand has significantly
increased its brand awareness to 45% within the 18-34
year old cohort (Source: Kantar January 2023).
MOMA’s award-winning oat milk has high growth
potential and we have invested in its first ever above
the line advertising campaign, which appeared on
screens at the start of September across TV, outdoor
and digital/social channels. The advert highlights how
MOMA is perfectly crafted for both expert and home
coffee creations, as “The Barista’s Choice”.
Sponsorship remains an effective and exciting
engagement tool and is a key focus for our Rubicon
RAW Energy brand, supporting its brand positioning
as “A Force of Nature” in the great outdoors. Part of a
multimillion pound marketing campaign, the brand
sponsored the Boardmasters Festival in Cornwall in
August 2022 and we are also pleased to have
announced the brand’s four year partnership as the
official energy drink of GB Snowsport.
Our recent addition to the brand portfolio, Boost, has
fostered a strong consumer connection through its
sponsorship of Leeds United Football Club. We are
excited to be a part of this successful partnership and
look forward to building the brand’s awareness in the
year ahead.
15
Strategic Report Corporate Governance Accounts
Building brands
Our brand building strategy remains focused on
growing awareness, trial and loyalty through consumer
engagement activity, increasing our product
distribution through effective sales execution and
supporting brand development through innovation.
Barr Soft Drinks has delivered a strong revenue
performance across its core brands.
IRN-BRU’s total revenue grew by 6% while volumes, as
anticipated, fell by 4%, reflecting the short-term impact
of price changes across the market. The IRN-BRU
growth strategy has delivered increases in low
calorie (IRN-BRU XTRA up 9%), increased innovation
(IRN-BRU 1901 up 5%), development in the Energy
category (IRN-BRU Energy up 15%) and increased
distribution within England and Wales.
The Rubicon masterbrand performed very strongly
across all variants – Sparkling (up 18%), Still (up 14%),
Spring (up 27%) and Rubicon RAW Energy (up 30%).
It is particularly pleasing to see the acceleration in
Rubicon Spring which has been in the market for
over six years and is now the UK’s number 1 sparkling
flavoured water brand.
FUNKIN benefited from the recovery of the hospitality
sector and the ongoing market growth of cocktail
consumption, with on-trade revenue up by 23%. The
momentum in the take home RTD cocktail category
was sustained with FUNKIN’s sales in this channel
up 8%, consolidating its Number 1 position. FUNKIN
continues to innovate across product, packaging and
formats and in addition has progressed its international
business development, on track to launch a state
specific market trial within the US in 2023.
Our drive to build a multi-beverage portfolio has made
positive progress across the last year. The successful
acquisition of the Boost and MOMA businesses highlight
our desire to participate in high growth categories
where our brand building expertise and business model
can add significant value.
Over the past 12 months
we have continued to
invest in a wide range
ofconsumer marketing,
promotion and
communication
programmes across
ourbusiness units
andbrands.
16
A.G. BARR p.l.c. Annual Report and Accounts 2023
Building trust
Trust is earned. We continue to work hard to retain
the trust of all our employees, our wide range of
stakeholders and our communities, as we have done
for over 145 years.
As the cost of living crisis continues to place pressure
on households and businesses across the UK, we
recognise the duty of care that we have for our
people. Our employees have shown huge levels of
commitment over recent years and in recognition of
this, and the difficult economic landscape, we made
two special cost of living payments in 2022 to those
colleagues who we believed would benefit the most
from additional financial support. We will continue to
monitor the welfare and wellbeing of our people and
have plans in 2023 to offer additional financial support
services, as well as maintaining our longstanding
commitment to mental health support within the
workplace.
Our environmental sustainability programme No Time
To Waste continued to deliver clear and tangible
progress throughout the year, from our first plastic
bottles made of 100% recycled content, launched in
April 2022, to the formal approval of our science-based
targets and net-zero commitments by the Science
Based Targets Initiative. We have a stretching yet
achievable net-zero roadmap, coupled with a genuine
drive and ambition to push further and faster. This is
particularly the case for our use of recycled material,
notwithstanding current challenges associated with
availability and quality. We are well advanced in our DRS
preparations, due to go live in Scotland in August 2023,
which has the potential to increase the availability and
quality of recycled material, as well as supporting our
long-term circular packaging goals.
For us, a successful business also means being
a sustainable business and we will continue to
demonstrate our values in this respect through
honest and meaningful actions.
Driving efficiency
Our drive for continuous improvement across our
assets, processes and technology remains a constant
across the business. This is particularly the case in Barr
Soft Drinks where we invest significantly in our asset
base to drive efficiency and increase our manufacturing
and logistics capacity and capability.
2022 saw us embark on the first phase of an extensive
asset replacement programme at our Cumbernauld
facility. Over the next 3-4 years this programme will
deliver new high speed PET and can filling lines,
advanced packaging and palletising capability, as
well a number of associated energy and environmental
sustainability benefits. Phase 1 of the programme is
now well underway and we expect to have a new
small format PET line and new downstream packaging
machinery installed and commissioned in the next
12 months.
As a high growth and innovative business, FUNKIN
has operated with an outsourced manufacturing
business model that provides both agility and flexibility.
Its recent move into RTD cocktails in cans presented
an opportunity to leverage some of the benefit of being
part of the wider A.G. Barr Group. Following an £8m
investment at our Milton Keynes facility, we successfully
installed and commissioned new slim 250ml can filling
and cardboard multipack capabilities. This opens up
new growth opportunities for Barr Soft Drinks, and
allows us to produce FUNKIN’s nitro-infused ready to
drink cocktail cans in-house, bringing with it significant
operational efficiency benefits.
Chief Executive’s review continued
For more information on our Strategy in Action
see pages 18 to 29
17
Strategic Report Corporate Governance Accounts
Outlook
We anticipate a continuation of our strong brand
momentum across the Group in 2023/24 as we
continue to invest in the development of our business,
brands and people. This is despite a backdrop of
continued high inflation and the planned introduction
of the Scottish DRS in August 2023, both of which have
the potential to impact consumer purchasing behaviour.
We do however anticipate a short-term impact on
operating margins, as a result of the combination of this
investment, ongoing inflationary cost pressures, and
the initial dilutive impact from the Boost acquisition.
It is our belief that our growing brand portfolio and our
ongoing actions to mitigate cost inflation will support
the delivery of our growth ambitions and at this early
stage we remain confident of delivering further revenue
and profit growth in the year ahead in line with
management expectations.
Looking to the long term, it is our strategy to build
and develop a multi-beverage portfolio capable of
significant growth. We are now in an investment
phase, designed to capitalise on the strategic growth
opportunities ahead. This growth and investment phase
will support the rebuilding of our operating margin over
the medium term and the creation of a stronger and
more sustainable business.
Roger White
Chief Executive
28 March 2023
DETAILS OF ALL OUR
RESPONSIBILITY COMMITMENTS,
GOALS AND ACTIVITIES
can be found on pages 30 to 55
We continue to work hard to retain
the trust of all our employees, our
wide range of stakeholders and
our communities, as we have done
for over 145 years.
* Items marked with an asterisk are non-GAAP measures. Definitions and relevant reconciliations are provided in the Glossary on pages 199 to 204.
18
A.G. BARR p.l.c. Annual Report and Accounts 2023
Rubicon RAW Rubicon RAW
Energy, Energy, a force
of nature
Rubicon RAW Energy, launched in 2021, is enjoying its
first big sponsorship campaigns, supporting its brand
positioning as ‘A Force of Nature’ in the great outdoors.
Part of a multimillion pound marketing campaign the
brand sponsored the Boardmasters Festival in August.
The event was a huge success with 100,000 people
attending the five day surfing extravaganza. Thousands
of samples of Rubicon RAW Energy were handed
out – and sold at every bar – coupled with impactful
branding across both festival sites, making a
memorable impact with consumers and driving
awareness and trial.
The event was supported by several weeks of
brand activity running across all Rubicon RAW
Energy social channels.
The brand also teamed up with two surfing champions
and media influencers – Ellie Turner and Ben Skinner – to
create a digital content series that shows people what it
really takes to keep your cool to compete professionally.
Rubicon RAW Energy also announced a four year deal
that saw the brand become the official energy drink of
GB Snowsport.
The partnership kicked off in November and will see
athletes across different disciplines including skiers,
snowboarders and elite para snowsport athletes
display Rubicon RAW Energy logos on race suits and
competition equipment.
The wide-ranging partnership will also see
GBSnowsport and Rubicon RAW Energy
collaborate on different opportunities to bring
Britishworld-classskiers and snowboarders
closer to fans across the country.
Our strategy in action
Building
brands
Connecting
with consumers
19
Strategic Report Corporate Governance Accounts
A new look for A new look for
Barr Flavours
Our Barr Flavours range got a bolder and brighter new
look late in 2022 creating stronger shelf standout and
appealing to shoppers looking for a fun, young and
energetic brand of great tasting and great value flavours.
Barr has a longstanding, loyal customer base in
Scotland and increasingly across the rest of the UK,
and continues to be a firm favourite for shoppers.
The new packaging began rolling out to stores in
December across its full product range with marketing
support in place for retailers and wholesalers to bring
the brand to life for shoppers.
Building
brands
Connecting
with consumers
20
A.G. BARR p.l.c. Annual Report and Accounts 2023
Our strategy in action continued
21
Strategic Report
Corporate Governance
Accounts
Aligned to our longstanding growth ambitions,
we were delighted to complete two acquisitions
in December 2022 – Boost Drinks and MOMA
Foods – accelerating the development of
the A.G. Barr Group and further building our
portfolio of differentiated brands.
The Boost brand, founded in 2001, operates
in the high growth functional beverage category
spanning energy, sport and iced coffee, with a
strong market position in the UK independent
retail channel. We are excited about the
significant potential for further growth,
development and operational synergies for
Boost working in partnership with the wider
A.G. Barr Group.
Following our initial majority equity stake
investment in MOMA Foods Limited in
December 2021 we are delighted to have
now taken full ownership of the MOMA
business. With its strong position in the high
growth oat milk category we can now fully
support the MOMA business and brand to
leverage its growth potential even sooner
than originally planned.
Building
brands
22
A.G. BARR p.l.c. Annual Report and Accounts 2023
Slim can Slim can
production begins production begins
atat Milton Keynes
Following an £8m investment at our Milton Keynes site we
successfully installed and commissioned a new 250ml slim
can line.
This important investment increases the manufacturing
capability of our Barr Soft Drinks business unit, opening up
new growth opportunities. It has also allowed us to produce
FUNKIN’s nitro-infused ready to drink cocktail cans in-house
and includes the capability to produce cardboard multipacks.
Digital screensscreens
We welcomed the arrival of new digital screen
technology to our Cumbernauld and Milton Keynes
sites in 2022. Part of a phased roll-out plan, the screens
allow us to cascade information directly to our sites
using the AppSpace content management system.
Thanks to the new screens, we can present engaging
and important content across the business centrally
at a corporate level, as well as working with site-based
editors to share local news.
The content can be updated in an instant and offers
real opportunity for efficient employee communication
in the year ahead.
Our strategy in action continued
Driving
Efficiency
Driving
Efficiency
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Corporate Governance
Accounts
100% recycled100% recycled
IRN-BRU
andand
Rubicon
500ml500ml
bottlesbottles
500ml IRN-BRU and Rubicon
plastic bottles made with
100% recycled material
(rPET)
100%
April saw the first production run on our 500ml
IRN-BRU and Rubicon plastic bottles – all now made
with 100% recycled material (rPET).
With a lower carbon footprint, the new pack is still
100% recyclable, and our new 100% rPET bottles are a
fantastic example of the progress we’re making in reducing
our impact on the environment through our No Time To
Waste environmental sustainability programme.
Building
Trust
24
A.G. BARR p.l.c. Annual Report and Accounts 2023
Our strategy in action continued
25
Strategic Report
Corporate Governance
Accounts
As part of its continued growth strategy MOMA
launched a major advertising campaign for its
award-winning oat milk.
The ads appeared on screens at the start of
September across TV, outdoor and digital/social
channels, with the campaign highlighting how
MOMA is perfectly crafted for both expert and
home coffee brews, as “The Barista’s Choice”.
The campaign also signified the launch of MOMA’s
new brand positioning as “The Craft Oat Co.”
cementing the company’s challenger heritage,
expertise and passion for oats as the driving force
behind all things delicious and healthy.
This was MOMA’s first TV campaign.
Connecting
with consumers
26
A.G. BARR p.l.c. Annual Report and Accounts 2023
Rubicon Spring
in sleek cans in sleek cans
Innovation remains critical to brand development and was a key
driver for our launch of Rubicon Spring Black Cherry Raspberry
and Orange Mango variants in a sleek 330ml can format.
With just nine calories in a premium sleek can, the new format
provides consumers with an exciting low-calorie refreshing drink
to be enjoyed at any time.
While taste remains the number one reason for shoppers to choose a soft
drink, drinking occasions are changing, with more healthy lunches now
enjoyed at home. Consumers are increasingly looking for new and
exciting flavours and formats to try and the new sleek can offers just that.
The new format launch was supported by a trade marketing campaign
with the tagline `It’s spring water fabulously fortified’.
Our strategy in action continued
Building
brands
Strategic Report Corporate Governance Accounts
27
£1 in every £5
spent on ready
to drink cocktails
is now spent on
FUNKIN.*
FUNKIN’s
biggest biggest
ever advertising ever advertising
campaign campaign
FUNKIN invested in its biggest ever advertising
campaign in 2022, spending over £4m across TV,
outdoor, social and digital channels.
Launched in the summer the successful “Whenever
you’re feeling fine... it’s FUNKIN time” campaign
was followed by national Christmas outdoor and
TV activity.
FUNKIN created a fun and vibrant campaign for the
UK’s Number 1 cocktail brand, featuring a miniature
drag queen – the FUNKIN Queen played by award-
winning drag queen, Divina De Campo.
* Nielsen PRE MIXED ALCOHOLIC DRINKS
Total Coverage Data MAT 12.03.2022.
Building
brands
Connecting
with consumers
28
A.G. BARR p.l.c. Annual Report and Accounts 2023
Our strategy in action continued
Building
brands
Connecting
with consumers
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Strategic Report
Corporate Governance
Accounts
In March, IRN-BRU revealed two new ads to the
world – created in the brand’s signature
maverick style. In “Prom”, a tuxedoed ginger teen
shows up to pick up his date – but is appalled to
hear she thinks IRN-BRU tastes like “cream soda”.
In “Mob” we pay homage to the gangster movie
genre – with a dark fate awaiting a mobster who
claims IRN-BRU “definitely tastes like tutti frutti”.
The campaign comically reflects on the
ambiguity of IRN-BRU’s taste, which in itself
contributes to its fame as a brand – no one can
agree upon the exact flavour, however everyone
can definitely agree that it tastes phenomenal.
The new adverts build on last year’s Western-
themed short, where the great taste debate
triggered an all-out saloon brawl.
The new creative features across TV, social
channels and online – with the multi-channel
approach reaching the numerous media
touchpoints that IRN-BRU’s target audience
engage with during their day.
30
A.G. BARR p.l.c. Annual Report and Accounts 2023
Behaving responsibly for over 145years. We are proud
of our brands and business. We are also proud of the
positive contribution we believe we make to society.
It is our belief that how we act reflects who and what
we are.
For over 145 years we’ve been brand owners and
builders, offering a diverse and differentiated portfolio
of brands that people love and our business has grown
as a result. The continued financial strength of our
business is important not only to our employees and
our shareholders, but also on a broader basis, where
our performance positively impacts a wide range of
stakeholders and the UK economy.
Our overarching business purpose is to create value,
with values – for our shareholders, consumers,
customers and for society as a whole. Our values
include a commitment to behave responsibly. Our
responsibility agenda has always been woven into the
fabric of our business and, in today’s world, as we grow
and develop, it’s more important than ever that we play
our part in addressing the key issues facing society, such
as the need to tackle the impact of climate change.
We are also mindful that our actions can contribute
towards global improvements. The 2030 Agenda for
Sustainable Development, adopted by all United Nations
Member States in 2015, provides a shared blueprint for
peace and prosperity for people and the planet, now
and into the future. At its heart are the 17 Sustainable
Development Goals (SDGs), which are an urgent call
for action by all countries – developed and developing
– in a global partnership. They recognise that ending
poverty and other deprivations must go hand-in-hand
with strategies that improve health and education,
reduce inequality and spur economic growth – all while
tackling climate change and working to preserve our
oceans and forests.
While there will be actions we take that contribute both directly
and indirectly to many of the SDGs, we have focused our SDG
connections where we believe we can most directly play our part.
These are:
Decent work and economic growth
Promote sustained, inclusive and sustainable
economic growth, full and productive
employment, and decent work for all
Climate action
Take urgent action to combat climate change
and its impacts
Responsible consumption and production
Ensure sustainable consumption and
production patterns
Gender equality
Achieve gender equality and empower all
women and girls
Good health and wellbeing
Ensure healthy lives and promote wellbeing
for all at all ages
Responsibility report
We have high expectations of our suppliers, our partners and
ourselves. Across more than 145 years of operation, we have
developed robust and responsible policies that guide what
we do and how we work with others. The key policies,
statements and guidelines we rely upon and that support our
responsibility commitments are now available on our Group
website at www.agbarr.co.uk.
31
Strategic Report
Corporate Governance
Accounts
We focus our specific responsibility goals and commitments on those areas where we believe we can make the greatest positive economic,
environmental and social impact, supporting our contribution to a sustainable future for all. We also engage with a wide range of stakeholders,
as set out on pages 74 to 80, to ensure that our priorities are aligned. As such, behaving responsibly at A.G. Barr is underpinned by four key
commitments which we believe to be material matters to both our business and our key stakeholders:
We act with
integrity
We respect
the environment
We support
healthy living
We give back
Key focus areas Key focus areas Key focus areas Key focus areas
• Safety and wellbeing
• Employee engagement
• Responsible policies and practices
• Carbon reduction
• Packaging
• Water and waste
• Sustainable sourcing
• Calorie reduction
• Responsible advertising
and marketing
• Labelling
• Community engagement
• Charity partnership
• Employee volunteering
Long-term goals Long-term goals Long-term goals Long-term goals
Accident incident rate
• Zero work-related accidents
Employee engagement*
• 2025 Goal: 80%
Women in Leadership*
• 2025 Goal: 45%
Never again send non-hazardous
waste to landfill
Carbon emission reduction across our
own operations (Scope 1 & 2 emissions
market-based approach)**
• 2030 Goal: 60% reduction from a
2020 base year
• 2035 Goal: 90% reduction from a
2020 base year
Carbon emission reduction across
our wider supply chain
(Scope 3 emissions) **
• 2030 Goal: 25% reduction from a
2020 base year
• 2050 Goal: 90% reduction*** from a
2020 base year
Improvement in water
usage efficiency
• 2025 Goal: 10% improvement from
a 2020 baseyear
Recycled PET content
• 2025 Goal: Full portfolio 100% rPET
To continue to advertise responsibly, offer
a wide range of pack sizes to assist with
portion control and, by providing clear
nutritional information, enabling our
consumers to make informed choices.
To support our corporate charity
partnership by donating £150,000 over
three years and raising awareness across
our own teams.
Our key responsibility commitments
* Further information on employee engagement and women in leadership is provided on page 32 within the non-financial KPI section.
** Science-based target as approved by Science Based Target Initiative (SBTi).
*** Net-zero achievement in accordance with SBTi requirements. Reductions are targeted across Scope 3 emissions associated with purchased goods and services and upstream
and downstream transport and distribution. See page 39 for more information.
Note: Goals above stated in calendar years
32
A.G. BARR p.l.c. Annual Report and Accounts 2023
7.1
9.0
8.6
4.0
2023
2022
2021
2020
33%
38%
2023
2022
2021
Baseline Year
39%
39%
41 %
38%
2023
2022
2021
2020
97. 2%
100%
100%
100%
2023
2022
2021
2020
77%
NA
75%
75%
2023
2022
2021
2020
5.1%
7.1%
2023
2022
2021
Baseline Year
Responsibility report continued
Accident incident rate
4.0
Improvement in water usage efficiency
7.1%
Non-hazardous waste diverted from landfill
100%
Employee engagement
75%
Women in leadership
38%
Carbon emission reduction across our own operations
38%
Non-financial key performance indicators
In support of our responsibility commitments we measure a range of non-financial KPIs as set out below:
Number of accidents (RIDDOR) per 1,000 people – relative
to both our employees and agency workers. 2023 includes
Boost and MOMA data from the dates of acquisition. Further
information is provided in our Safety and wellbeing culture
section on page 34.
KPI reset in 2021 following detailed analysis of our water
footprint, our refreshed water strategy and action plan. Ratio of
total water used relative to total litres of product produced.
Further information is provided in our Waste and water section
on page 43.
Quantity of waste from Company-owned sites diverted from
landfill relative to total waste.
As measured by our annual “Your Voice Matters” employee survey.
Due to the impact of the pandemic, no survey was conducted in
2020/21. 2023 excludes Boost and MOMA which were not part of
the A.G. Barr Group at the time the survey was conducted.
Number of females defined as leaders/senior managers
at the close of the financial year. 2023 includes Boost and
MOMA employees – not included in prior years. See page 37
for further information.
Previous long-term goal achieved and replaced with new
science-based target as detailed above. Percentage reduction
in total Scope 1 and Scope 2 greenhouse gas emissions using
a market-based approach.
33
Strategic Report Corporate Governance Accounts
33
Non-financial information statement
The information presented here and throughout the
report, as cross-referenced to the right, complies with
the requirement under sections 414CA and 414CB of
the Companies Act 2006 to provide information on
certain non-financial matters. Our Responsibility Report
provides the required information in relation to content
on environmental matters, our employees, community
issues and social matters, as well as setting out our
non-financial metrics. Our business risks are included
within our Risk Management section. The Responsibility
Report also complies with the Streamlined Energy and
Carbon Reporting (SECR) requirements as required by
the Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations
2018. We have complied with the requirements of
Listing Rule 9.8.6R by including climate-related financial
disclosures consistent with the Task Force on Climate-
related Financial Disclosures (TCFD) recommendations
and recommended disclosures.
It is the Group’s policy to conduct all of its business in
an honest and ethical manner. It is committed to acting
professionally, fairly and with integrity in all its business
dealings and relationships wherever it operates.
The Group is a UK Living Wage accredited employer.
The Group publishes its Modern Slavery Act
Transparency Statement annually. This explains the
steps that we take to seek to ensure that there are
no incidents of modern slavery within the business
and our supply chain, in accordance with the UK
Modern Slavery Act 2015. The Board reviews the
Group’s operational, legal and compliance framework
to prevent modern slavery in its supply chain, which
includes employee training, contractual terms and
conditions, and due diligence processes.
The Group’s Anti-bribery and Corruption Policy (ABC
Policy), available on the Group website, emphasises
the Group’s zero tolerance approach to bribery and
corruption. It sets out the Group’s responsibilities, and
of those working for it and parties acting on its behalf,
in observing and upholding its position on bribery and
corruption in compliance with applicable laws, and
provides information and guidance to those working
for the Group and parties acting on its behalf on how
to recognise and deal with bribery and corruption
issues. The ABC Policy is clearly communicated to
all employees and ABC training is provided to all
employees on induction and on a regular basis
thereafter. The Group maintains an anti-bribery and
corruption register, which records details of corporate
hospitality, and gifts given and received by employees
over a specified value. The Group’s international
department undertakes appropriate due diligence on
all third-parties acting on its behalf and maintains a third
party anti-bribery and corruption register. The Audit
and Risk Committee reviews the effectiveness of the
Group’s anti-bribery systems and controls, reviews and
approves the Group’s ABC Policy on an annual basis.
No bribery and corruption issues arose during the year.
There is currently no specific human rights policy in
place however our Supplier Code of Conduct, available
on the Group website, sets out the minimum standards
we require our suppliers to meet, including human
rights, and forms part of their contractual commitment
to us. As a UK business, we comply with the full
spectrum of employee protection legislation. We
believe our existing policies ensure the rights of our
own employees are respected fully and our robust
supplier controls provide assurance when considering
human rights impacts beyond our direct control.
Theme
Cross reference (within Annual Report
& Accounts unless otherwise stated) Page reference
Environmental matters
• Responsibility Report – We respect the environment
Pages 39 to 53
Employees
• Business model
• Responsibility Report – We act with integrity
Pages 8 to 9
Pages 34 to 38
Social matters
• Business model
• Responsibility Report – We support health living
• Responsibility Report – We give back
Pages 8 to 9
Page 54
Page 55
Non-financial metrics
• Responsibility Report – Non-financial KPIs
Page 32
Business risks
• Risk Management
Pages 62 to 69
Business model
• Business model
Pages 8 to 9
SECR
• Responsibility Report – SECR reporting
Pages 52 to 53
TCFD
• Responsibility Report – TCFD disclosure
Pages 44 to 53
ABC Governance
• Audit & Risk Committee Report
Pages 85 to 88
Supplier controls
• Responsibility Report – Sustainable sourcing
Pages 43 to 44
Policies & Procedure
• Including Supplier Code of Conduct (Human Rights),
Modern Slavery Statement, ABC and Employment
Protection Policies
www.agbarr.co.uk/
responsibility/
policies-terms-of-
business-and-
brand-rules
A.G. BARR p.l.c. Annual Report and Accounts 2023
34
Safety and wellbeing culture
We work hard to create a culture in which health, safety
and wellbeing are our top priorities. Our ultimate goals
in this area are zero work-related accidents and the
provision of safe and healthy working environments for
all. We continuously improve our management systems
to underpin our objectives and to ensure compliance
with all health and safety related legislation as a
minimum. Our thorough and varied health and
safety management activity programme is designed
to keep safety at the top of everyone’s agenda, with
actions ranging from safety awareness initiatives and
safety training, to site audits and reporting.
Over the past 12 months we have continued to review
our workplace activities and focus on reducing risk
through the implementation of suitable control
measures. Our health, safety and wellbeing related
activity has included:
• Ongoing review and roll-out of updated risk
assessments and safe systems of work
• Internal training, including dynamic risk assessment,
contractor control and accident investigation
• Provision of IOSH Working and Managing Safely
courses across our supply chain teams
• All people managers have either completed
IOSH Managing Safely or a one day Safety for
Managers course
• Provision of Mentally Healthy Workplace Training
for Managers
• Two-way communication via health and safety
committees and representatives across all
business areas
• Continued partnership with the Keil Centre,
supporting our drive to increase our safety cultural
maturity
• Health, Safety, Environment and Wellbeing Days –
a series of face to face events were carried out
across all of our sites to help drive improved
behaviours, awareness and decision making
• Health and Safety Awards – recognising those
employees who have gone above and beyond
to improve the safety of themselves and others
• Health and Safety pulse surveys gauging the views
and priorities of employees
Responsibility report continued
We act with integrity
In focus
Health, Safety, Environment
and Wellbeing Days
With short and engaging sessions, our Health,
Safety, Environment and Wellbeing Week
involved impact speakers, workshops and video
content, specifically tailored to meet the needs
of production, logistics and office colleagues.
From mental wellbeing and improving
workstation ergonomics to recycling tips and
manual handling equipment awareness, the
sessions gave employees at our Barr Soft Drinks
sites the opportunity to raise their awareness
across a variety of important topics.
In focus
Forfar sets the safety
standard
Our Forfar site achieved a very
significant milestone – four years
with zero lost time accidents.
This is an impressive result for
a manufacturing facility and
testimony to the hard work and
strong safety culture across the
Forfar site.
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We are pleased to report that our accident incident rate
reduced from 8.6 to 4.0 during the past 12 months.
This, along with our ISO 45001 certification, are clear
validations of the hard work that is ongoing to improve
our safety standards and culture.
Our accident incident rate KPI, as detailed in our
non-financial KPIs on page 32, includes those accidents
involving our own and agency employees, however as
part of our regular accident monitoring and reporting
processes, any accidents that occur on our premises
by contractors or other third parties are recorded, fully
investigated and the learnings taken into account.
We will continue to work hard towards delivering an
improved safety performance in the year ahead.
From a wellbeing perspective we support our
employees across a wide range of areas. For a number
of years we have placed an increasing focus on raising
mental health awareness within the workplace, creating
a culture where mental health conversations are
encouraged and our people are properly supported.
We now have over 70 Mental Health First Aiders across
the business, specially trained to be there for those who
need them, complemented by Mentally Healthy
Workplace employee training.
Over the past 12 months we have listened to our
employees and understand the important role flexible
working can play in their wellbeing. As such we have
now implemented formal hybrid working arrangement
for those employees who are able to work from home.
This approach seeks to strike a balance between the
benefits of working from home with the cultural
benefits of collaborating and engaging with colleagues
in person within the workplace. This approach is
supported with our partnership with Posturite, a
market-leading workplace health, wellbeing and
ergonomics company, who help ensure all display
screen equipment users are trained with a suitable set
up at home and at work.
Employee Engagement
For over 145 years we have developed a positive,
results-driven and supportive culture. As we grow
our business organically and through acquisition,
it is important that we retain the entrepreneurial spirit
of the new and exciting additions to our Group, while
also ensuring that we continue to value and nurture
the unique essence of what makes A.G. Barr a great
business to be part of.
Underpinning everything that we do is our belief in
performance through people – positive and engaged
teams are central to our success.
Communication is key to this engagement and we
use a wide range of channels and tools to suit the
different needs and preferences of our people. From
monthly Town Halls and regular team events to some
of our more recent communication improvements,
such as digital screens and podcasts, we keep our
communications positive and engaging, striving to
maintain a sense of fun and involvement.
In focus
Our improving safety culture
The Keil Centre, with whom we have partnered
since 2018, are chartered psychologists and
ergonomists with significant safety-related
experience. Specialising in identifying where
an organisation sits from a safety culture point
of view, they have developed a five level
maturity model.
We were delighted, following re-assessment
workshops with our Barr Soft Drinks Supply
Chain colleagues, to have improved our maturity
from level two to level three. Our goal was to
reach a more consistent level of maturity across
all elements, which we are pleased to have
achieved, with significant improvements made
in “Safety Communication” and becoming
a “Learning Organisation”.
A.G. BARR p.l.c. Annual Report and Accounts 2023
36
In focus
No Time To Waste
learning portal
This year we created a No Time To Waste
learning portal to help our employees develop
their environmental sustainability knowledge
and their understanding of our own strategy.
Using simple videos and quick guides, the portal
provides learning and support across our five
NoTime To Waste focus areas
• Net-Zero
• Plastic and Packaging
• Sustainable Sourcing
• Waste
• Water
The portal launched during Recycling Week
in September, with high levels of engagement,
and now forms part of our employee induction
programme, so people new to the business
understand the importance of our
environmental sustainability strategy.
Responsibility report continued
We act with integrity continued
Employee values
Underpinning our corporate values, our four business
units have their own employee values. These
behavioural frameworks are central to who they are
and how they operate, playing an important role in
building teams and strengthening performance.
At Barr Soft Drinks, which comprises our largest group
of colleagues, employee values are embodied by the
Barr Behaviours. Created by our own people they
represent what is important to a business that has been
successful for over a century – Being Brilliant, Always
Learning, Results Driven and Relationships Matter.
For the more recent additions to the A.G. Barr Group
– FUNKIN, MOMA and Boost – their employee values
are more reflective of the entrepreneurial and agile
nature of their businesses, which we believe are
important characteristics to retain and nurture.
In focus
Your voice matters
Our 2022 “Your Voice Matters” employee
engagement survey, which sought the views
of our Barr Soft Drinks and FUNKIN teams,
achieved a high overall engagement index of
75%. Most improved areas included Diversity
and Inclusion, Communication and Change
as well as Working Together, however we did
not achieve our previously set 80% target which
was set before the pandemic. We remain
committed to increasing our employee
engagement levels and have reset our target
with a new date of 2025.
From recruiting new employees to developing existing
teams, these employee values support how our teams
work together to enhance performance and are
fundamental to our success.
For more information on our employee values visit our
website at agbarr.co.uk
Learning and development
Learning and development in our business is about
creating a Company-wide culture in which everyone is
supported and challenged to take ownership of their
performance, the impact they have on others and their
careers. Our teams are encouraged to take the lead in
their own personal development, drawing from a wide
range of learning opportunities. Our award-winning
iLearn platform is our online hub for development
activity, with hundreds of hours of learning immediately
accessible to all. We also recognise that people learn in
many different ways – from classroom training and job
shadowing to our successful mentoring programme
and externally provided training courses, we try to
ensure there’s something to suit every individual in
every area of the business.
In addition to our regular technical and compliance
based training, over the past 12 months we have
continued to offer as many learning opportunities as
possible to our people including our popular Manager
Essentials programme, Mentally Healthy Workplace
training, Project Management development,
psychometric team-building workshops and a new
environmental sustainability learning portal.
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Strategic Report Corporate Governance Accounts
70%
30%
62%
38%
69%
31%
Gender Diversity 2022
2022 2023
Male 8 7
Female 3 3
2022 2023
Male 54 63
Female 38 39
2022 2023
Male 625 701
Female 270 313
Board & Company Secretary Leadership Team All employees
Diversity and inclusion
We believe that diverse and inclusive organisations that
respect and value difference allow people to perform
at their best. That’s why we’re taking steps to create
an inclusive, respectful and supportive working
environment that encourages people with different
backgrounds, experiences and perspectives to come
together to work more effectively and creatively, with
gender equality a specific and current area of focus.
The gender balance across the organisation now sits
at 69% men and 31% women, broadly indicative of
our industry. On our journey towards greater gender
equality we set a new KPI in 2020 related to women in
leadership, targeting 45% women across the leadership
population by 2025. Having made progress in recent
years, increasing from 29% in April 2017 to 41% in
2021/22, senior female representation across the Group
currently sits at 38%. This year end data reflects the
addition of the women in leadership at both MOMA
(50%) and Boost (23%).
The key metrics from our latest Barr Soft Drinks Gender
Pay Report are detailed below:
The mean gender pay gap is the difference in the
average hourly pay for women compared with men
within a company. We have narrowed our gap from
4.9% in 2018 however we do see slight percentage
movements due to year on year payroll differences –
some years favourable to men and some years
favourable to women.
In common with many businesses, our bonus scheme
payment thresholds are linked to business performance
and generally increase with seniority.
The key metrics from our latest Barr Soft Drinks Gender
Pay Report are detailed below:
Mean Gender Pay Gap
-5.1%
2021: 3.0%
Median Gender Pay Gap
-6.0%
2021: 2.7%
Mean Bonus Pay Gap
-1.1%
2021: 42.2%
Median Bonus Pay Gap
-17.6%
2021: 0%
Positive numbers are favourable to men, and negative
numbers are favourable to women.
% employees receiving a bonus payment
Male
89%
2021: 84%
Female
93%
2021: 82%
Over 80% of employees received bonus payments
in this reporting period reflecting our positive
financial performance.
We will continue to work towards creating an
environment that is inclusive, where people feel
they can be themselves at work and where their
opinions count.
The full Barr Soft Drinks Gender Pay Report is available
on our website at www.agbarr.co.uk
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Reward
Our approach to reward aims to link remuneration
with the delivery of our key strategic priorities and
our overarching purpose, to create value, with values
– for our shareholders, consumers, customers and for
society as a whole.
We strive to offer a fair and transparent total reward
package that drives a performance-led culture and
is linked to both the long-term sustainable success
of the business and our values.
We target our pay at the market median or above,
ensuring we can attract and retain high-calibre
employees. We operate a number of incentive and
bonus schemes, as well as performance related
pay arrangements, designed to reward and motivate
strong individual and collective performance.
We offer employees a modern and flexible range
of benefits, offering choice to our increasingly diverse
workforce. Employees receive a flexible benefit
allowance with which they can select the benefits
most suitable to them personally. Healthcare features
prominently, with a selection of health-related benefits
made available either on a core benefit basis or
within the suite of flexible benefits made available
to employees.
We comply fully with all the regulations associated
with rewarding our employees fairly and are a UK
Living Wage accredited employer.
More information on how we ensure that our approach
to remuneration supports our strategy is available in the
Directors’ Remuneration Report on pages 89 to 121.
Risk and regulation awareness
We have a robust risk management framework in place
that is embedded across the business. In addition to the
corporate risk register, governed by the Board, business
unit and functional risk registers have been developed
across our teams, allowing a wide range of employees
at different levels to contribute to our risk assessment
and assurance processes.
Our reputation is extremely important to us and it is the
responsibility of every employee to act professionally,
fairly and with integrity. This requires an understanding
of the regulatory risks we face and how we can all play
a part in mitigating these risks.
In support of this, we require employees to complete
the following five mandatory training modules:
• Introduction to Risk
• Data Protection
• Competition, Pricing and Confidentiality
• Bribery and Corruption
• Anti-facilitation of tax evasion
For more information on our Risk Management approach
seepages 62 to 69
Responsibility report continued
We act with integrity continued
In focus
Increasing menopause
awareness and support
In support of our commitment to create an open
and supportive culture, 2022 saw us introduce a
new Menopause Policy. The policy aims to foster
an inclusive and respectful working environment
within which our colleagues can openly and
comfortably initiate conversations or engage in
discussions about the menopause. The Policy
also aims to raise wider awareness and
understanding among all employees and
managers while also outlining the support and
reasonable adjustments available.
The Policy is supported across a number of
areas:
• The Menopause Café – a safe space created
by our own employees with an open
invitation for both women and men
• Menopause Lunch & Learn sessions
• Conversation guidelines for employees and
managers
• Menopause training
• A menopause section on our Health &
Wellbeing intranet hub
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Strategic Report Corporate Governance Accounts
17.5%
Total Emissions: 164,991 tonnes CO
2
e
Responsibility Report continued
We take our environmental responsibilities very
seriously, constantly seeking to minimise our impact on
the world we operate in, whether through carbon and
energy reduction, our water and waste control actions
or the reduction of our environmental impact through
areas such as packaging.
We have been accredited to the Environmental
Standard ISO 14001 since 2003. This certification
provides a framework against which we have
developed comprehensive environmental procedures
and monitoring systems. These processes have allowed
us to measure our environmental performance and
focus our activities on delivering long-term
improvements.
Carbon reduction
We have an important role to play in the transition
to a low carbon and climate-resilient economy.
In 2021, working with independent sustainability
experts the Carbon Trust, we undertook a thorough
assessment of our 2020/21 Scope 1, 2 and 3
greenhouse gas (GHG) emissions to establish our
carbon footprint across our full product life cycle and
value chain. This covered the goods we purchase and
the resources, fuel and energy we use in our day to day
activities, right through to distribution to customers and
the management of consumer waste. This important
work provided us with an accurate measurement and
verification of our full carbon footprint for the first time.
We are pleased to report that following this full carbon
footprint assessment, and aligned to the Science Based
Target Initiative’s (SBTi) updated Net-Zero Standard,
published in November 2021, we now have SBTi
approved near and long-term science-based emission
reduction targets and an SBTi verified science-based
net-zero target of 2050. Further information is available
on page 50.
We respect the environment
OUR 2021/22 GREENHOUSE GAS EMISSIONS
12.3%
Ingredients
40.3%
Packaging
9.3%
Equipment & Services
2.5%
Manufacturing
31.6%
Transport &
distribution
SCOPE 1
Direct emissions from
activities we control
SCOPE 2
Market-based. Indirect emissions
from purchased energy
SCOPE 3
All other emissions that occur
in the value chain
2%
3,848 tonnes CO
2
e 1,036 tonnes CO
2
e 160,107 tonnes CO
2
e
1%
97%
Where our emissions come from
1.2%
At home
refrigeration
2.6%
Waste
Management
0.2%
Staff Commuting
& Travel
40
A.G. BARR p.l.c. Annual Report and Accounts 2023
With continued support from the Carbon Trust we
have now completed a second full carbon footprint
assessment for our 2021/22 financial year covering
our Scope 1, 2 and 3 greenhouse gas emissions.
A detailed breakdown of our 2021/22 greenhouse gas
emissions is contained within the Metrics and Targets
section of our TCFD disclosure on page 50. This also
contains our Streamlined Energy Carbon Reporting
(SECR) disclosure which sets out our Scope 1 and 2
data for the 2022/23 financial year.
We are fully committed to achieving our science-based
targets. For our Scope 1 and 2 emissions we have
a deliverable and realistic decarbonisation roadmap
which builds on the progress we have made and
pushes further, from electric vehicles and solar panels
to air source heat pumps and degasification projects.
For our Scope 3 targets, including purchased goods
and services as well as upstream and downstream
transport and distribution, we are working closely with
our suppliers and partners. Our roadmap to net-zero
is set out on the right.
Responsibility report continued
We respect the environment continued
THE ROAD TO NET-ZERO
Our plans Our progress
2020
• ESG Board Committee established
• Launch of No Time To Waste environmental
sustainability programme
• Switch to 100% renewable electricity
• CDP score improves to B classification
• Introduction of 100% recycled packaging film
on Barr Soft Drinks consumer multipacks
2030
• Reduce Scope 1 and 2 GHG emissions by 60%
• Reduce Scope 3 GHG emissions from
purchased goods and services and
upstream and downstream transport
and distribution by 25%
2035
• Become net-zero
across our own
operations
2030-35
• Degasification at our main
manufacturing sites through
solar, heat pumps and biogas
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Strategic Report
Corporate Governance
Accounts
2021
• Completion of first full carbon
footprint assessment
• 45% reduction in greenhouse gases since 2015
• CDP score improves to A- classification
• Electric vehicle charging points installed at all
main company-owned sites
• Fully electric fork lift truck fleet
2022
• SBTi approved science-based targets
and net-zero commitment
• Full compliance with TCFD
• First bottles in 100% recycled plastic (rPET)
• New signatory of UK Plastics Pact
• FUNKIN glass bottle recycled content increased
from 14.6% to 42.5%
• Successful trial of Hydrotreated Vegetable
Oil (HVO) as fuel alternative to diesel
2023-2030
• 100% rPET across full Barr Soft Drinks portfolio
• Plastic lightweighting
• Supplier engagement and collaboration programme
• Commencing transition away from fossil fuels using
compressed natural gas and HVO for our heavy goods vehicles
• Reduce Company car fleet and move to electric vehicles
2035-50
• Recipe reformulations
• Increased use of recycled content
• Supplier transition to green electricity
• Logistics partners move away from diesel
2050
Become net-zero
across our full
value chain
42
A.G. BARR p.l.c. Annual Report and Accounts 2023
Responsibility report continued
We respect the environment continued
Our ambitious commitments are being delivered
through our No Time To Waste environmental
sustainability programme, which brings together
net-zero, plastic and packaging, waste, water and
sustainable sourcing workstreams. No Time To Waste is
a hugely important programme for the Group and to
date our Barr Soft Drinks and FUNKIN business units
have worked closely and collaboratively. The intention is
to bring both Boost and MOMA into the fold in the
coming 12 months to ensure that we work together to
increase our overall sustainability and reduce our
environmental impact. Further information is available on
pages 44 to 53 within our TCFD disclosures.
In focus
Science-based targets explained
In 2015, 196 governments signed the Paris Agreement, which aims to keep average
temperature increase to well below 2°C above pre-industrial levels. More explicitly, the
agreement sets out to limit the temperature increase even further to 1.5°C.
The Science Based Target Initiative (SBTi) enables companies to demonstrate their leadership
on climate action by publicly committing to science-based greenhouse gas (GHG) reduction
targets. Science-based targets provide clearly defined pathways for companies to reduce
GHG emissions. Targets are considered science-based if they are in line with what the latest
climate science deems necessary to meet the goals of the Paris Agreement.
SBTi requires companies to focus initially on emissions from their direct GHG emissions
(Scope 1), their indirect emissions, including the consumption of purchased electricity
(Scope 2) and then on their wider indirect (Scope 3) emissions.
Packaging
We believe that packaging should be treated by all
as a valuable resource and recycled, not discarded as
litter.100% of our Barr Soft Drinks packaging is already
recyclable, with clear on-pack recycling messages,
and we continually seek to reduce the amount of
packaging we use.
As part of our No Time To Waste environmental
sustainability programme, our plastic and packaging
workstream has established a clear strategy with
a long-term goal of 100% circular packaging. This
means a future where packaging is reduced, recycled
and reused.
We are fully committed
to achieving our
science-based targets.
Reducing the footprint of our packaging will be a
critical part of our journey to reach net-zero. We are
proud to have made a significant step forward in this
regard with the introduction of our first 100% recycled
plastic bottles. All our IRN-BRU and Rubicon 500ml
plastic bottles moved to 100% rPET in April 2022,
supported by a high profile advertising campaign
to raise consumer awareness and understanding.
Our longer term goal of having our full portfolio in
100% rPET by 2023 has been impacted by the current
lack of availability of appropriate quality food grade
recycled plastic. Demand is exceeding supply across
the food and drink industry, in the UK and beyond. We
remain committed to our goal, however realistically the
date by which this can be achieved is now expected to
be the calendar year 2025 and we have adjusted our
long-term target accordingly.
We remain committed to creating a truly circular
system for drinks containers with the expectation that
Scotland’s deposit return scheme (DRS), due to be
implemented in August 2023, will play an important
role in improving the availability and quality of high
grade recyclates. As a large producer member of the
DRS scheme administrator, Circularity Scotland Limited
(CSL), we will benefit from first right of refusal for our
proportionate share of the scheme’s collected material.
The recycled material available from a DRS system is
expected to be of a much higher quality than that
produced by current household recycling. As such we
anticipate that this will significantly improve our rPET
supply in particular and allow us to resume our path to
our 100% rPET goal.
43
Strategic Report
Corporate Governance
Accounts
We are in the important planning and preparation DRS
phase, working with our customers and CSL to ensure
as smooth a transition and as successful a scheme as
possible. By incentivising consumers to return their
drinks containers, DRS will set drinks packaging apart,
as drinks containers will become part of a truly
circular economy. In countries where DRS is already
operational, such as Norway and Germany, return rates
of plastic bottles for example reach as high as 98%.
Water and waste
As a multi-beverage business, water is a principal
ingredient, as well as a necessary resource we rely
upon across our operations. There is increasing
awareness of the challenges faced in managing water
resources and we are extremely aware of the part we
have to play in protecting this precious commodity.
Water is a key workstream within our No Time To Waste
environmental sustainability programme and in 2021
we undertook a detailed analysis of our water footprint
at all our production sites, working with an independent
agency to give us a better understanding of how and
where we use water. With this data we have developed
an evidence-based water strategy with tangible actions
in place for each of our sites over a three-year horizon.
As part of our sustainable sourcing strategy we also
know that the most significant water use in our value
chain is in agriculture. The crops that we rely upon
for many of our products, such as mangos, are grown
in hot, potentially water-stressed areas, and we are
working in partnership with our global suppliers to
encourage sustainable practices.
A key element of our internal water strategy is our focus
on cleaning procedures, where small changes can make
significant reductions in our water usage. We have also
focused on changing our own behaviours, supported
by our “Drop by Drop” awareness raising initiative and
an employee education and engagement campaign
coinciding with World Water Day in March. We are
pleased to report that our renewed water strategy
is already making a difference with year-on-year
improvements in our water usage efficiency against
our 2020 baseline. More information can be found in
our non-financial KPI section on page 32.
In focus
The UK plastics pact
As part of our No Time To Waste environmental
sustainability programme, we are proud to have
become signatories to The UK Plastics Pact.
What is The UK Plastics Pact?
The UK Plastics Pact is a bold and unique
initiative that will transform the UK’s plastic
system. By bringing together the entire plastics
value chain behind a common set of ambitious
targets, it will move us towards a system which
keeps plastic in the economy and out of the
environment. It will encompass innovation,
research and new business models to rethink
and redesign what packaging we put on the
market in the first place, and how we can
encourage more reuse of packaging.
What will it achieve?
By 2025, The UK Plastics Pact will transform
the UK plastic packaging sector and help stop
plastics polluting the environment. Members
have signed up to the following targets:
• Eliminate problematic or unnecessary
single-use packaging through redesign,
innovation or alternative (re-use) delivery
models
• 100% of plastic packaging to be reusable,
recyclable or compostable
• 70% of plastic packaging effectively recycled
or composted
• 30% average recycled content across all
plastic packaging
Once again we are pleased to have achieved our
long-term target related to waste. 100% of our
non-hazardous waste is diverted from landfill and
our objective is to maintain this performance on
a permanent basis.
Sustainable sourcing
As climate change and a rising population put pressure
on our limited natural resources, it is important for
all our raw materials to be sourced sustainably and
used effectively.
As one of our No Time To Waste workstreams,
sustainable sourcing is key to ensuring our high-quality
ingredients and materials are sourced and manufactured
in a fair, ethical and environmentally responsible way.
Our Supplier Code of Conduct, currently applicable
to both Barr Soft Drinks and FUNKIN, sets out the key
supplier principles we work to and the minimum
standards we require our suppliers to meet, which form
part of their contractual commitments to us. This Code
is fundamental to ensuring we work with suppliers who
uphold the highest standards with respect to human
rights, conditions of employment and who actively
reduce their environmental footprint. We ensure our
critical suppliers have embedded sustainable and ethical
practices in their organisations, and that they are
committed to maintaining these principles within their
own supply chain.
44
A.G. BARR p.l.c. Annual Report and Accounts 2023
Our suppliers must acknowledge their compliance on
an annual basis through our stringent supplier approval
process, which uses questionnaires and audits to
confirm adherence to our standards across a broad
range of requirements. For many years we have used the
Supplier Ethical Data Exchange (Sedex) platform, a
not-for-profit global membership organisation dedicated
to driving improvements in ethical and responsible
business practices. We also use the Sedex Supplier
Approval Questionnaire as an important secondary
validation step which allows independent benchmarking
of suppliers on a consistent measurable basis.
The output from these questionnaires also allows
us to collaborate and engage with our suppliers to set
objectives and action plans to deliver sustainable and
continuous improvements. This includes active and
ongoing dialogue with our key suppliers – their actions
support the delivery of our Scope 3 science-based
targets, and ultimately our net-zero ambition.
Materiality and stakeholder engagement
We regularly engage with internal and external
stakeholders to ensure that our responsibility agenda
is addressing the material issues.
Governance
Our responsibility agenda is integrated into our
strategic, financial and business planning, as well
as our risk management processes, with ultimate
accountability sitting with the Board.
Our Executive teams are responsible for the delivery
and execution of our responsibility actions and
programmes, supported where appropriate by
sub-committees and functional or project teams.
Further information on the governance of our
climate-related risks and opportunities is detailed
in our TCFD disclosures on pages 44 to 53.
Independent assurance
We continued to work with third-party auditors, the
Carbon Trust, across the past 12 months. They have
completed an audit and verification of our Group
operations for Scope 1 and Scope 2 emissions for the
year ended January 2022, and verification for the year
ended January 2023 is underway. Having developed
the world’s first certification for organisational CO
2
e
Reduction Standard and product carbon footprints,
the Carbon Trust is the leading carbon footprint
certification body.
Our Scope 1 and 2 greenhouse gas emissions for the
year ended January 2022 have been verified against
the ISO 14064-3 standard.
During 2022 we were also pleased to maintain our A-
climate change rating with the Climate Disclosure Project
(CDP). CDP is a not-for-profit charity that runs a global
environmental disclosure system. CDP is widely used
and considered to be one of the most comprehensive
independent environmental data sets available. The CDP
Score Report allows us to benchmark and compare our
environmental stewardship with peers, and provides
additional information that can help inform our forward-
looking improvement programmes.
Task Force on Climate-related Financial Disclosures
The Task Force on Climate-related Financial Disclosures
(TCFD) provides a framework for companies to report
the potential financial impacts from climate change on
their business, as well as reporting the progress made
by the organisation against the targets set to mitigate
climate-related risks and to reduce its impact on
the environment.
This framework is designed to help investors and wider
stakeholders understand how businesses are managing
climate-related financial risks, across four key areas:
Governance – setting out the respective roles of the
Board and management team in managing risks and
opportunities.
Strategy – identifying risks and opportunities over
different time horizons and explaining how these
impact strategic and financial planning.
Risk Management – having processes in place for
managing identified risks and including these within
the overall risk management framework.
Metrics and Targets – explaining how both climate
change impact and exposure to risks are measured,
setting targets and tracking ongoing progress.
In focus
100 Litre Challenge
Our No Time To Waste programme is not only
about achieving our environmental sustainability
goals – it is also about encouraging our
employees to take personal responsibility.
To mark World Water Day in March 2022, we
issued our employees with a 100 litre challenge.
For one day, we challenged employees to see if
they could cut their personal water consumption
to just 100 litres. Using a purpose-built intranet
portal, we used engaging content to share
details of where everyone is potentially wasting
water – and what simple steps they can take to
reduce water waste.
Responsibility report continued
We respect the environment continued
45
Strategic Report Corporate Governance Accounts
Using this framework we set out our full TCFD
disclosures below. These reflect the structure of the
A.G. Barr Group for the majority of the 2022/23
financial year i.e. covering the Barr Soft Drinks and
FUNKIN business units. MOMA and Boost Drinks,
acquired in December 2022, will be incorporated
into future disclosures.
Governance
Board of Directors
The A.G. Barr Board has responsibility for the oversight
of climate-related risks and opportunities impacting
the Group.
The Board of Directors considers climate-related risks
and opportunities when setting and reviewing the
Company strategy, agreeing future objectives, budgets
and KPIs, setting policies and when considering
potential M&A activity.
The Board carries out a full review of our corporate risk
register and principal risks, including those related to
climate change, twice a year. In addition, the Board
regularly discusses climate-related issues across a
variety of Board meeting agenda items. These include
matters arising from its sub-committees, particularly
from the Environmental, Social and Governance (ESG)
Committee, as well as from general business updates,
where climate-related issues will often be integral.
Examples during the year include discussions on
science-based targets, net-zero roadmaps, as well as the
approval of our strategic capital investment programme,
incorporating greenhouse gas reduction projects.
A structured process for identifying and quantifying
emerging risks and opportunities across the Group,
similar to our risk management approach, provides a
framework to support broader thinking on new and
emerging areas, including those related to climate
change. With input from both our Barr Soft Drinks and
FUNKIN Executive teams, this plays an important role in
the Board’s strategic planning process. The Board
completed a robust assessment of the Group’s
emerging risks, including those related to climate
change, during the year.
Corporate climate-related targets, set by the Executive
teams and ratified by the ESG Committee, are
monitored by the Board on a monthly basis.
The Board, in turn, delegates some elements of its
responsibility to its various sub-committees, as set
out below:
• The Audit and Risk Committee has the delegated
responsibility to monitor our internal financial
controls as well as our internal control and risk
management systems. Its risk management
oversight includes the review of our corporate risk
register and principal risks, including those related
to climate change, at least twice per year.
• The Environmental, Social and Governance
Committee assists the Board in fulfilling its oversight
responsibilities with respect to the Company’s
management of all relevant ESG matters. The ESG
Committee has delegated responsibility for approving
the Company’s environmental sustainability strategy
and reporting back to the Board. It meets twice each
year and otherwise as required. The ESG Committee
owns, and is responsible for monitoring and updating,
our material risks and opportunities related to
climate change.
• The Remuneration Committee is responsible for
determining our remuneration policy, including how
climate-related factors are taken into consideration
and reflected in reward. Executive Directors’
long-term incentive plan awards, by way of
illustration, include an environmental sustainability
performance measure. Further information is
available in our Directors’ Remuneration Report
on page 91.
• The Nomination Committee is responsible for
Board appointments and succession planning.
Barr Soft Drinks and FUNKIN Business Units
Our Executive teams across both business units, Barr
Soft Drinks and FUNKIN, are responsible for managing
the climate-related risks and opportunities faced by our
business on both a long-term strategic basis and day
to day. Our strategic planning process considers both
the risks and opportunities arising from climate change
and a specific process related to emerging risks and
opportunities has recently been agreed and is now
being introduced. The Executive teams are supported
across a number of areas as set out below:
• Our Group Risk Committee ensures that a strong
framework is in place to manage operational risks
effectively, including those associated with climate
change. The Committee oversees our principal
risks and uncertainties, and reviews the effectiveness
of risk management and compliance systems in
managing those risks. The aim of the Committee
is to ensure that employees understand the
importance of good risk management, a supportive
risk management culture is embedded across the
Group and that risk management processes are
clearly deployed.
• The No Time To Waste Steering Group, chaired
by our CEO, governs our Group-wide environmental
sustainability programme. The No Time To Waste
Steering Group has overall responsibility for setting
the Group’s environmental sustainability strategy, for
achieving the Company’s climate change objectives,
and for monitoring and managing risks and
opportunities related to climate change. The No
Time To Waste programme encompasses five key
workstreams associated with reducing the effects of
climate change. Each workstream, and its associated
team, owns a risk register relevant to its specific area
of focus. The risks identified, along with opportunities
arising from the climate change agenda, are
reviewed on a monthly basis by the Steering Group.
• Our Capital Allocation Committee is responsible
for ensuring the best use of our capital resources
in line with our strategy and plans. This includes
the review and approval of capital expenditure
programmes related to environmental sustainability,
taking into account the risks and opportunities in
investment decisions.
• Our Emerging Risks and Opportunities Group is
responsible for identifying and managing emerging
risks and opportunities at an A.G Barr Group level.
This group conducts an annual review prior to
making recommendations to the Board, the output
from which forms part of our Board’s annual
Strategy Review.
46
A.G. BARR p.l.c. Annual Report and Accounts 2023
Responsibility report continued
We respect the environment continued
Strategy
Our Board has ultimate responsibility for agreeing
our business strategy, taking into account, and
reflecting where appropriate, the risks and opportunities
associated with climate change. As detailed above,
the Board’s strategic thinking and decision making is
supported and informed by our Executive teams and by
a number of Board sub-committees. As detailed in the
metrics and targets section that follows, our key climate
related objective, borne out of our strategy, relates to
our achievement of our science-based targets and our
ultimate net-zero commitment. Our associated road
map is set out on pages 40 and 41.
Our strategic timeframes are as follows:
• Short-term: 0 to 1 years
• Medium-term: 1 to 5 years
• Long-term: 5+ years
The opportunities, as well as physical and transition
risks considered material to our business, are detailed
on the following pages along with our strategic
responses. Our methodology for defining material
financial and strategic impacts on our business is
aligned with our risk management approach, detailed
in the Risk Management section that follows. Gross risk
impacts that fall in the categories of “moderate”, “major”
or “critical” would be deemed to be material.
Emerging Risks
& Opportunities Group
Board
Barr Soft Drinks and
FUNKIN Executive Teams
Group Risk Committee
“No Time To Waste” Steering Group
Capital Allocation Committee
Audit and Risk Committee
ESG Committee
Remuneration Committee
Nomination Committee
Our climate-related governance
47
Strategic Report Corporate Governance Accounts
Physical risks
associated with increased severity of extreme weather events such as cyclones and floods (acute), and associated with changes in precipitation patterns and
extreme variability in weather patterns, rising mean temperatures and rising sea levels (chronic).
Risk Type & Description Timeframe
Potential financial
impact
Chronic risk
The risk that climate change impacts the future availability, quality and cost of the natural ingredients required to
manufacture our products, such as sugar, fruit juices and water.
Long-term
Strategic response:
We have dedicated Sustainable Sourcing and Water workstreams within our No Time To Waste environmental sustainability programme with ambitious strategies in these
areas. Further information is available on pages 42 and 45, however by way of illustration of action taken related to fruit availability, we have developed a network of
suppliers who can supply materials from different origins and have set up a programme to approve fruit juices from different geographic sources, such as passion fruit
from Vietnam, in addition to our existing supply from Ecuador, thus reducing risk of supply and ultimately protecting sales.
Transition risks
associated with changes to policy and legislation, technology, the market and reputation.
Risk Type & Description Timeframe
Potential financial
impact
Policy and legal risk
The risk of higher costs as a consequence of planned/potential regulation such as a carbon tax, or packaging related
regulations/taxes such as UK Extended Producer Responsibility (EPR) and the EU Single-Use Plastics Directive.
Long-term
Strategic response:
We have approved science-based targets that will see us becoming net-zero across our own operations by 2035 and across our full supply chain by 2050, if not sooner.
We have already begun our decarbonisation journey in areas such as transitioning to 100% renewable electricity and 100% electric forklift trucks.
We are also focused on reducing, recycling and reusing across our packaging. 100% of our Barr Soft Drinks packaging is already recyclable and we are increasing our use
of recycled material. We now have 100% recycled plastic film across all of our Barr Soft Drinks consumer multipacks and introduced our first 100% recycled bottles in April
2022, as part of a longer-term objective of having 100% recycled content across our full portfolio of plastic bottles by 2025. Discussions are also underway with our glass
and aluminium can suppliers on how we can work together to increase recycled content in the products they provide. We are reducing packaging where possible, such
as in a recent reduction of stretch wrap weight.
In addition, we are positive supporters of the implementation of DRS in the UK, which will help to mitigate potential EPR costs for the business – the latest government
proposals in this area have confirmed that containers subject to DRS will be out of scope of EPR.
Potential financial impact Movement:
Moderate Major Critical
48
A.G. BARR p.l.c. Annual Report and Accounts 2023
Transition risks
associated with changes to policy and legislation, technology, the market and reputation.
Risk Type & Description Timeframe
Potential financial
impact
Market risk
The risk that consumer behaviours change in relation to single-use packaging or as a result of regulatory changes
designed to reduce the impact of climate change, such as DRS, resulting in a reduction in demand for our products
or consumers switching to brands perceived as more sustainable.
Medium-term
Strategic response:
As already detailed, we are positive supporters of the implementation of DRS, due to be implemented in Scotland in August 2023, and expected to launch in England
no earlier than 2025. By incentivising consumers to return their drinks containers, DRS will set drinks packaging apart, as drinks containers will become part of a truly
circular economy.
The delivery of our net-zero roadmaps, and specifically our drive to reduce, recycle and reuse across our packaging, are key to improving our environmental credentials and
further building trust with consumers.
Opportunities
associated with resource efficiency, energy sources, products and services, markets and resilience.
Opportunity Description & Type Timeframe
Potential financial
impact
Energy source opportunity
Use of lower-emission energy sources, such as photovoltaic panels and heat pumps for the generation of electricity,
heat and steam, leading to a reduction in greenhouse gas emissions.
Medium-term
Strategic response:
These initiatives present a significant opportunity to reduce our Scope 1 (reduction of gas consumption from heat pumps) and Scope 2 (on-site electricity generation
from photovoltaic panels) emissions, thereby mitigating the on-cost associated with the potential introduction of carbon pricing while also potentially delivering utility
cost reductions.
Market opportunity
The opportunity that consumer behaviours change, with consumption patterns shifting towards products perceived
to be more environmentally friendly, resulting in sales opportunities. More environmentally orientated consumer
behaviours could include supporting companies who have clear plans to achieve net-zero or who are actively engaged
in DRS. It could also extend to increased ‘staycations’ or the favouring of domestic produced products.
Long-term
Strategic response:
Communication with our customers and consumers is key to ensuring our environmental sustainability plans and progress are well understood. We provide regular updates
to our customers via our sales force and we are increasingly communicating directly with all consumers, both on-pack and through traditional and social media channels.
Responsibility report continued
We respect the environment continued
Potential financial impact Movement: Moderate Major Critical
49
Strategic Report Corporate Governance Accounts
We believe that our strategic actions are currently
providing an acceptable degree of long-term resilience,
taking into consideration different climate related
scenarios as set out below.
Risk Management
Identifying risks
Each department or function in the Company has its
own risk register that is reviewed on a regular basis.
Climate-related risks, including those associated with
existing and emerging regulatory requirements, are
identified and assessed alongside other business risks
during the departmental reviews. Departmental risk
registers feed into the corporate risk register, which
is reviewed by our Group Risk Committee every
two months.
The Emerging Risks and Opportunities Group,
as already detailed in the Governance section, is
responsible for the Group‘s emerging risk register,
with a longer-term horizon than that considered
by the departmental units. The Group Risk Committee
will retain oversight of emerging risks going forward.
The ESG Committee owns, and is responsible for
monitoring and updating, our material risks and
opportunities related to climate change, as already
detailed in the Strategy section. The ESG Committee
is supported by a cross-functional group of senior
executives who help input into this process both in
terms of risk identification and assessment aligned
to worst-case and best-case climate scenarios, as
detailed here.
Best-case climate scenario
IEA Net-Zero by 2050
Worst-case climate scenario
IPCC RCP8.5 / SSP5
Scenario narrative & context
Under this scenario, global warming is limited to below
1.5°C above pre-industrial levels by 2100 through
global collaboration and policy intervention to reduce
greenhouse gas emissions and reach net-zero emissions
by 2050.
For example, this scenario foresees the implementation
of a carbon price/tax that could start at $75 per tonne
CO
2
e in 2025 for developed countries, rising to $205
per tonne CO
2
e in 2040.
We chose this scenario to assess transition risks
and because its time horizon aligns with the UK
Government’s pledge to achieve net-zero by 2050,
therefore offering a plausible pathway for our
local authorities.
Scenario narrative & context
Limited efforts are made by governments and businesses to reduce greenhouse gas emissions, leading to
temperature rises of 4°C above pre-industrial levels by 2100.
In this scenario, the emphasis turns to protecting the population and operational assets from the catastrophic
impact of the changing climate as opposed to reducing the emissions themselves.
We chose this scenario to assess the potential physical risks on our business and supply chain, as it is supported
with long-term data ranges on temperature, precipitations and rise in sea levels. The data from the scenario
extends to 2100 and allows us to take medium and long-term views on risks, considering the impact of market
change in the locations of our own assets and at the origin of our key materials.
The climate-related risks considered material to our business are detailed on pages 47 and 48, however this scenario planning process identified a range of other risks
and opportunities.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Assessing risks
Our corporate risk register guidelines provide the
framework for defining financial and strategic impacts
on our business. This framework applies equally to
climate-related risks and categorises five levels of risk
impact: “insignificant”, “minor”, “moderate”, “major”
and “critical”.
The corporate risk register guidelines also include
definitions for the likelihood of the risks, including:
“rare”, “unlikely”, “possible”, “likely” and “almost certain”.
Different parameters are taken into account when
assessing the potential impact of a risk, including
financial aspects, environmental aspects, and other
aspects such as health and safety and corporate
reputation. Each risk is given a risk rating before and
after mitigating actions.
Gross risk impacts that fall in the categories of “moderate”,
“major” or “critical” would be deemed to be material.
From a financial perspective, a “moderate” impact is
defined as impacting financial turnover or profit by
between 3% and 10%, a “major” impact is defined as
impacting financial turnover or profit by more than 10%
and less than 25%. A financial impact of 25% of more
on turnover or profit would be deemed as “critical”.
Managing risks
The resolution of moderate impacts requires the input
from the Executive team. The resolution of major and
critical impacts requires the input from the Board and/
or its sub-committees.
The Group Risk Committee reports back to the Audit
and Risk Committee, attended by Directors on the
Board. Similarly, the ESG Committee reports to the
Board on the material climate-related risks identified.
Mitigating actions are developed for each risk and their
effectiveness is reviewed on an ongoing basis. New
actions are triggered in order to further reduce the
net score of each risk, especially for those risks that
sit outside of the Board risk appetite. Functional risk
registers are reviewed in depth by the Risk Committee
according to an annual schedule to ensure that risks
Responsibility report continued
We respect the environment continued
are well represented and that actions are taken to
reduce the level of risk for the business.
Metrics & Targets
The mitigating actions for our key climate-related risks,
identified through our ESG Committee and our
multi-functional and business-wide risk management
process, are being managed primarily through our
NoTime To Waste environmental sustainability
programme. This programme has identified a number
of long-term climate-related goals, with the key
deliverables being the achievement of our science-
based targets and the ultimate delivery of our net-zero
by 2050 commitment. Other climate-related targets
and KPIs, including those related to packaging, waste
and water are detailed within our long-term goals and
non-financial key performance indicators on pages 31
and 32.
On a cross-industry basis we are working
collaboratively with other producers on the effective
introduction of a deposit return scheme across the UK.
Our SBTi approved science-based carbon reduction
targets are in line with the latest climate science
recommendations necessary to meet the goals of the
Paris Agreement and limit the temperature increase
to 1.5°C above pre-industrial levels. These targets are
detailed below and set out our commitment to be
net-zero across our own operations by 2035 and
across our wider supply chain by 2050, if not sooner.
Our science-based
targets
Overall Net-Zero Target
We commit to reach net-zero greenhouse
gas (GHG) emissions across the value
chain by FY2050 from a FY2020 base year.
Near-term Targets
We commit to reduce absolute scope 1
and 2 GHG emissions 60% by FY2030
from a FY2020 base year.
We also commit to reduce absolute scope
3 GHG emissions from purchased goods
and services, upstream transport and
distribution and downstream transport
and distribution 25% within the same
timeframe.
Long-term Targets
We commit to reduce absolute scope 1
and 2 GHG emissions 90% by FY2035
from a 2020 base year.
We also commit to reduce scope 3
GHG emissions from purchased goods
and services, upstream transport and
distribution and downstream transport
and distribution 90% by FY2050 from
a FY2020 base year.
Notes:
FY2020 refers to AG Barr financial year 2020/21
ended in January 2021. The same convention
applies to FY2030, FY2035 and FY2050
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Strategic Report Corporate Governance Accounts
Our 2021/22 greenhouse gas emissions
Emissions (t CO
2
e)
2020/2021 2021/2022
Total Scope 1
5,434
3,848
Total Scope 2 (market-based) 1,888 1,036
Scope 3
Purchased goods and services (product) 106,608 86,767
Purchased goods and services (non-product) 7,625 11,877
Capital goods 1,763 3,311
Fuel and energy related activities 2,150 2,158
Upstream transportation and distribution 4,587 30,616
Waste generated in operations 66 117
Business travel 226 85
Employee commuting 427 223
Upstream leased assets – –
Downstream transportation and distribution 18,768 18,254
Processing of sold products – 348
Use of sold products (direct) – –
Use of sold products (indirect) 3,428 2,016
End-of-life treatment of sold products 1,570 4,236
Downstream leased assets – –
Franchises 62 –
Investments – 99
Total Scope 3 147,280 160,107
Total Scope 1, 2 & 3 154,602 164,991
Our Scope 3 emissions increased by c.7% in 2021. This reflects our increased sales volumes as we recovered following the pandemic and some discrepancies and omissions
identified in 2020’s baseline assessment. The discrepancies and omissions have now been rectified and the learnings will be carried forward in our future carbon footprint
assessments and future target setting.
While our full carbon footprint assessments run a year behind due to calculation and validation requirements, our Scope 1 and 2 emissions data is available for the 2022/23
financial year as follows.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Responsibility report continued
We respect the environment continued
Streamlined Energy and Carbon Reporting (SECR)
We are reporting against the SECR framework for the
third year, for the period 31 January 2022 to 29 January
2023. We report as a quoted Company and confirm
that all the minimum requirements have been
addressed and are presented here. All global energy
and emissions reported related to UK operations –
there are no non-UK energy and emissions.
Our total energy consumption for 2022/2023 was
44,658,466 kWh. This includes our electricity, steam
and natural gas usage for our production, distribution
and office buildings, as well as transport fuels for
logistics vehicles and Company cars.
Under a location-based approach, the total global
Scope 1 & 2 carbon emissions associated with our
reported energy use and fugitive emissions from
refrigerant leaks for 2022/2023 were 8,822.83 tCO
2
e,
as summarised in the table below:
Carbon Emissions (Location-based)* 2022/23 2021/22
Scope 1 emissions – (tCO
2
e) 4,363.67 3,847.87
Scope 2 emissions –
purchased electricity (tCO
2
e) 4,328.29 4,752.63
Scope 2 emissions –
purchased stream (tCO
2
e) 130.87 999.68
Total Scope 1 & 2
emissions (tCO
2
e) 8,822.83 9600.19
* The location-based approach applies UK grid average carbon
emission factors to all Scope 2 purchased electricity.
Under a market-based approach the total global Scope
1 & 2 carbon emissions associated with our reported
energy use and fugitive emissions from refrigerant leaks
for 2022/2023 are 4,539.70 tCO
2
e, as summarised in
the table below:
Carbon Emissions (Market-based)* 2022/23 2021/22
Scope 1 emissions – (tCO
2
e) 4,363.67 3,847.87
Scope 2 emissions –
purchased electricity (tCO
2
e) 45.16 35.96
Scope 2 emissions –
purchased stream (tCO
2
e) 130.87 999.68
Total Scope 1 & 2
emissions (tCO
2
e) 4,539.70 4,883.52
* It should be noted that, in 2021/22 purchased steam provided
by a 3rd party at Cumbernauld is categorised under Scope 2 and
accounted for 999.7tCO
2
e. In 2022/23 we began generating our
own steam rather than continuing to purchase steam from a third
party. This change occurred on the 1st April 2022 and remained in
place until the end of the financial period. A small amount of Scope
2 steam purchase remains for the first two months of the year
reflecting 130.87tCO
2
e of emissions.
Methodology
The methodology used is the WBCSD/WRI Greenhouse
Gas Protocol – a corporate accounting standard
revised edition in conjunction with UK Government
environmental reporting guidelines including SECR
guidance. An operational control approach has been
taken. We have used the UK Government greenhouse
gas conversion factors for company reporting 2022.
Scope 2 emissions from purchased electricity have
been measured using a location-based approach.
Intensity ratio
For 2022/2023, our emissions intensity, measured
as the total Scope 1 and 2 emissions relative to the
thousand litres of product produced is 20.34 kg CO
2
e
per thousand litres of product produced. This compares
with 21.55 kg CO
2
e per thousand litres of product
produced, as detailed in our previous Annual Report.
Energy efficiency actions
1. We are procuring REGO backed renewable
electricity across all our operational sites, leading
to a significant reduction in Scope 2 emissions
(under market-based reporting).
2. We are rolling out our “Brilliance in the Making”
continuous improvement programme across our
manufacturing sites. Through this programme we
are investing heavily in the training of our staff in
better problem solving and team working skills.
This programme improves energy efficiency
through reduction in changeover times,
improvements in line reliability and the reduction
of waste.
3. We are awaiting the delivery of 12 CNG trucks that
will run on biomethane instead of diesel. We are
expecting CNG trucks to deliver a 98% reduction in
CO
2
e when compared to diesel trucks.
4. We carried out a trial with hydrotreated vegetable oil
(HVO) at one of our depots. The trial has been
extended into 2023 and is expected to deliver a 97%
reduction in CO
2
e when compared to diesel trucks.
5. We have initiated a project at our Milton Keynes site
aiming to reduce natural gas consumption by 90%
through the use of solar panels and heat pumps.
The feasibility study is underway.
6. The lights on our Campsies campus at
Cumbernauld were switched to LED, with an
expected annual energy saving of 76,000 kWh.
7. We initiated a project to install more efficient water
pumps at our Cumbernauld site, expected to save
circa 470,000 kWh in energy.
8. We have amended our company car policy so
that from the 1st April 2023, new company cars
allocated to staff will be either fully electric or
hybrid. EV charging points have been installed
at our Cumbernauld and Milton Keynes sites
in order to support this transition.
9. Forklift use has been fully electrified in 2022/23
with no further use of LPG equipment
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Strategic Report Corporate Governance Accounts
Reported emissions (and carbon offsets) (tonnes CO2e)
of carbon dioxide equivalent in the stated period
2022/23 2021/22
Total net emissions 8,823 9,600
Total gross emissions (scope 1 and 2) 8,823 9,600
Total direct and indirect emissions (scope 1 and 2) 8,823 9,600
Direct emissions (scope 1) 4,364 3,848
Direct emissions (scope 1) stationary combustion 2,526 1,839
Direct emissions(scope 1) mobile combustion 1,837.3 2,009
Direct emissions (scope 1) from transport fuels
1,837
2,009
Direct emissions (scope 1) from other mobile combustion
0.0
0.0
Direct emissions (scope 1) from process sources 0.0 0.0
Direct emissions (scope 1) from fugitive sources 0.0 0.0
Direct emissions (scope 1) from agricultural sources 0.0 0.0
Total direct emissions (scope 1)
Indirect emissions (scope 2) 4,459 5,752
Indirect emissions (scope 2) from electricity 4,328 4,753
Indirect emissions (scope 2) from purchased steam 130.9 999.7
Indirect emissions (scope 2) from purchased heating 0.0 0.0
Indirect emissions (scope 2) from purchased cooling 0.0 0.0
Total indirect emissions (scope 2)
Energy consumption (kWh)
Kilowatt hour equivalent in the stated period
Energy consumption used to calculate emissions 44,658,446 46,218,416
Energy consumption, combustion of gas 13,840,144 9,129,265
Energy consumption, electricity 22,382,308 22,383,215
Energy consumption, combustion of transport fuel 7,719,044 8,469,091
Energy consumption, other (Thermal Fuels) 0.0 107,296
Intensity ratio
Intensity ratio 0.020 0.022
The reported emissions intensity ratio is the total gross emissions
(Scope 1 & 2 in tonnes CO
2
e) per thousand litres of product produced
Intensity ratio based solely on mandatory data True True
TCFD Compliance Statement
Our climate-related financial disclosures are
consistent with all of the TCFD recommendations
and recommended disclosures. By this we mean
the four TCFD recommendations and the 11
recommended disclosures set out in Figure 4 of
Section C of the report entitled “Recommendations
of the Task Force on Climate-related Financial
Disclosures” published in June 2017 by the TCFD.
54
A.G. BARR p.l.c. Annual Report and Accounts 2023
Responsibility report continued
Calorie reduction
Our job has always been, and continues to be, about
understanding consumers and their changing tastes
and preferences, and providing them with great
products. Evidence shows that most soft drinks
consumers want to reduce their sugar intake while still
enjoying great tasting drinks. We have been reducing
the sugar content across our soft drinks portfolio
and introducing new and innovative reduced sugar
products in response to our consumers’ changing
tastes and preferences for many years.
98% of our Barr Soft Drinks portfolio by volume is
considered no or low sugar, containing less than 5g
total sugars per 100ml, and exempt from the UK Soft
Drinks Industry Levy, often referred to colloquially as
the “sugar tax”.
New price and location restrictions came into force in
England in October 2022, applicable to High Fat, Sugar
and Salt (HFSS) products. The definition of “high sugar”
for standard soft drinks is greater than 4.5g total sugar
per 100ml and from April 2022, six months ahead of the
new regulations, 98% of our Barr Soft Drinks portfolio
was HFSS exempt.
Responsible advertising and marketing
We take our responsibility in how we market, promote
and advertise our products very seriously. We advertise
responsibly, offer a wide range of pack sizes to assist
with portion control and, by providing clear nutritional
information, enable our consumers to make informed
choices. We fully comply with all of the appropriate
regulations and in some cases go beyond the standards
set, such as in the area of energy drinks where our
industry code exceeds regulatory requirements.
We support healthy living
Labelling
We have always been committed to providing clear
calorie and nutritional information on our soft drinks
packs to help consumers choose products that are
right for them. We were one of the earliest adopters of
the government’s voluntary front of pack nutritional
labelling on all our Company-owned Barr Soft Drinks
brands, which is a simple traffic light style scheme,
making it even easier for consumers to find the
information they need.
Research and Development
Our positive portfolio position is supported by our
in-house research, development and innovation team,
which delivers a wide range of reformulation and
innovation projects, using the experience they have
gained over many years to optimise recipes and carry
out robust consumer research to ensure our recipes
meet consumer needs.
In focus
Investment in new
R&D laboratory
In September 2022 we hosted employees from
around the business in a series of open days at
our newly refurbished Middlebrook laboratory.
The lab plays a vital role in the business and the
investment in an extensive refit of the facilities
demonstrates the importance placed on flavour,
quality and innovation. Colleagues were invited
to view a new sensory suite, packaging lab and
enhanced general lab space giving them the
opportunity to see how our famous products
are developed. Colleagues were also offered the
opportunity to design their own beverage, give
it a name and take it home for their friends and
family to try.
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Strategic Report Corporate Governance Accounts
Engaging with communities
Supporting and working with our local communities
has been at the core of our business since we were
first established in 1875.
We support a range of charities and community
groups across the UK, from local clubs and charity
fundraisers to large charities helping people on
a national scale. We help in various ways, including
financially, through donations or on a practical level
with employee volunteering.
We give back
In focus
FUNKIN and The Drinks Trust
FUNKIN’s marketing team spent a volunteer day
hosting a marketing workshop for aspiring future
leaders within the hospitality and drinks industry.
In collaboration with The Drinks Trust, 21
members of its Develop programme – ranging
from hospitality staff to managing directors
and business owners – attended five separate
workshops learning about brands, trade and
digital marketing, menu-building, mixology
and innovation.
A rewarding day for both the participants and
our FUNKIN colleagues, it was an opportunity
to share expertise and inspire the future
professionals of the drinks industry.
Since 1886, The Drinks Trust has provided care
and support to the drinks hospitality industry
workforce, both past and present. The Drinks
Trust is run by industry professionals, funded by
drinks industry partners, including FUNKIN, and
supported by thousands of drinks hospitality
industry fundraisers, donors and contributors.
In focus
Support for GroceryAid
September 2022 saw us become headline
sponsors for “Checkout Scotland” an inaugural
music event held in support of retailer charity
GroceryAid.
GroceryAid is a charity that offers invaluable
support to colleagues across the retail sector
giving them access to vital financial and
wellbeing services.
The gig took place in the fantastic Glasgow
venue Barras Art & Design with over 700 guests
attending to enjoy an impressive line-up of acts
including Scouting for Girls, The Feeling and
Sophie Ellis-Bextor.
As headline sponsors, IRN-BRU’s presence was
unmissable from our branding, to our VIP area
and even IRN-BRU burger sauce.
The event helped raise awareness of the charity
and the life-changing work it does for industry
colleagues in need of a little help.
New charity partner
In June 2022 our employees voted for a new three-year
charity partner – Marie Curie.
After three successful years working with Mental Health
UK, our employees voted for Marie Curie as our new
partner, a fantastic charity that provides care and
support to people coping with terminal illness as well
as those close to them.
The three-year partnership will see the business donate
£150,000 directly to the charity, with additional
fundraising from employees adding further support.
Employee volunteering
Our employees are encouraged to take part in
volunteering activities, often giving something back
to the local communities we serve. This year saw
employees volunteering for a range of deserving
causes, including Women’s Aid, the Children’s Panel
and a local biodiversity project.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Financial review
A positive financial
performance with strong
organic revenue and profit
growth and two exciting
acquisitions.
Stuart Lorimer
Finance Director
Overview
The business has delivered another year of impressive
financial performance with top and bottom line growth
during a year of high cost inflation, supply chain
challenges and macroeconomic uncertainty:
2022/23 Versus 2021/22
Reported revenue £317.6m £268.6m +18.2%
Reported profit
before tax £44.4m £42.2m +5.2%
Adjusted profit
before tax* £43.5m £38.4m +13.3%
Adjusted operating
margin* 13.6% 14.9% (1.3pp)
Net cash at bank* £52.9m £68.4m (22.7%)
Reported EPS
(basic p/share) 30.47p 25.09p +21.4%
Dividend per share
(proposed final
and interim) 13.10p 12.0p +9.2%
Our revenue increase was driven by a combination
of brand momentum, revenue management and the
incremental contribution from our MOMA and Boost
Drinks acquisitions. Like-for-like revenue growth*,
adjusting for MOMA and Boost new business and the
extra week in the prior year, was 15.9%.
Throughout the pandemic, and the disruption that
followed as the economy reopened, we worked
collaboratively with our customers to ensure we
recognised the impact of restrictions on the brand
support and discounts we provided. This involved
numerous commercial discussions, and in certain
circumstances, changes to promotional terms. This
has resulted in a change in estimate and recognition
of £5.1m (2021/22: £4.9m) of additional variable
consideration.
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Strategic Report Corporate Governance Accounts
In a challenging cost environment our adjusted profit
before tax* increased by 13.3%. While recessionary
concerns, inflationary pressures and supply chain
disruption were clear headwinds, we continued to
invest for the future, in our brands, our people and
our assets. Our operating margin was compressed
as a result of supply chain cost inflation, the impact of
MOMA and Boost’s lower margins, and investment in
marketing ahead of sales in both FUNKIN and MOMA.
Our cash generation remains strong having generated
£35.9m of net cash from operations.
Our capital allocation principles are consistent with our
strategic ambition to consistently grow our business.
We prioritise the utilisation of funds to support organic
growth, finance appropriate acquisition opportunities,
provide shareholder income and optimise debt when
appropriate. In 2022/23, in addition to increased
marketing spend across our core brands, we chose
to invest in long-term sustainable growth through our
acquisitions and a step up in capital investment across
our operating sites. Our capital programme is expected
to result in investment in excess of £50m over the next
three years.
Our core brand strength, our clear strategy and our
engaged workforce provide a strong foundation to
deliver sustainable long-term shareholder value.
Adjusting items
The Group reported results include a net credit of
£0.9m (2021/22: £0.7m credit) relating to pre-tax
adjusting items which are excluded from adjusted profit:
• M&A – MOMA: A net credit of £1.6m relating to the
re-measurement and release of the excess
contingent consideration in respect of MOMA Foods
Limited following the Group’s acquisition of the
remaining 38.2% minority interest in December
2022.
• M&A – Boost Drinks: A net charge of £2.0m
relating to costs associated with the successful
acquisition of Boost Drinks Holdings Limited. This
comprises £1.2m of one-off acquisition fees and a
further £0.8m accrual related to the potential
2024/25 payment of £10m associated to the
acquisition earn-out. Both the acquisition fees
and the earn-out accrual have been charged to
operating expenses in the income statement.
• Asset disposal: A £1.3m one-off gain on the sale
of our Newcastle distribution site which was closed
in April 2022 as part of the completed Group-wide
restructuring programme that was announced
in 2021/22.
Segmental performance
There are three reportable segments in the Group:
• Soft drinks
• Cocktail solutions
• Other
Soft drinks
The soft drinks segment comprises two business units,
Barr Soft Drinks and Boost Drinks, with decisions made
at a business unit level. This allows agile and effective
operational management and strong Group oversight.
Barr Soft Drinks
Barr Soft Drinks delivered a year of strong top line
revenue growth, up 12.4% on 2021/22, driven by
volume growth, disciplined pricing and promotional
management as well as a small element of favourable
brand and channel mix. Gross margin declined as high
and sustained raw material inflation was only partially
mitigated by pricing action and disciplined cost
management.
IRN-BRU revenue grew by 6% with a strong
performance in the out-of-home channel more
than compensating for lower take home sales
as the channels continue to rebalance following
pandemic disruption.
Rubicon’s growth was particularly pleasing, up 8%
in volume and over 20% in revenue, with the brand
benefiting from increased distribution, continued
innovation, and a strong marketing programme.
Growth was broad based across the whole Rubicon
range with Sparkling, Spring, Stills and RAW Energy,
all delivering double digit revenue growth.
Gross margin in the second half of the financial year
was impacted by high exotic fruit costs following
particularly poor harvests.
Our other portfolio brands, including Barr Flavours,
KA and Simply Fruity, grew in both volume and revenue
terms as consumers sought value in the face of cost of
living challenges.
Boost Drinks
The Boost Drinks portfolio, spanning energy, sport,
iced coffee, protein and including the franchise brand,
Rio, was acquired by the Group in December 2022.
Our financial results include Boost’s contribution for
the two months since acquisition – c.£7m of revenue
and c.£1m of gross profit. The impact to Group profit
was negligible and is in line with the acquisition
business case.
Our capital allocation
principles are consistent
with our strategic
ambition to consistently
grow our business.
A.G. BARR p.l.c. Annual Report and Accounts 2023
58
Financial review continued
Cocktail solutions
FUNKIN delivered another year of significant growth
with revenue up 16.0% and gross profit up 10.2%. The
business benefited from a strong on-trade recovery,
especially in the first half of the financial year, and
continued distribution gains in the growing off-trade
ready to drink cocktail market. Gross margin was
impacted by increases in input costs, fruit in particular,
and a more challenging macroeconomic environment
for our on-trade customers in the second half of the year.
Other
The ‘Other’ segment represents our MOMA business
unit, comprising oat milk drinks and other oat based
products. MOMA continues to build distribution across
both grocery and food service channels with revenue
up over 41% versus the prior year. Cost inflation in both
processing and raw materials has adversely impacted
gross margin. The Group secured full ownership of the
MOMA business in December 2022 and this will now
allow us to invest for the long-term growth of the brand.
Operating margin
The combination of the inflationary macroeconomic
environment, the medium-term margin dilutive impact
of the Boost and MOMA acquisitions and our
commitment to maintaining marketing investment
behind our long-term growth drivers, led to an adjusted
operating margin* of 13.6% (2021/22: 14.9%).
Our marketing spend was ahead of sales growth for the
second successive year as we continued to invest
behind our core brands, innovation and our acquisitions.
During the year we also provided support with the
immediate cost of living challenges, through targeted
one-off payments as well as longer term investment
in personal skills and capabilities.
Interest
The Group remained net cash positive throughout
2022/23. Finance income of £0.5m relates to interest
earned on cash held on rolling short-term deposits.
The finance charge of £1.4m primarily relates to the
non-cash MOMA acquisition accounting (£1.1m),
included as an adjusting item in determining adjusted
profit as explained in the adjusting items section. The
remaining finance charge of £0.3m relates to banking
costs associated with the Group’s revolving credit
facilities and lease interest costs under IFRS 16.
Taxation
The reported tax rate for the year ended 29 January
2023 was 23.6% compared with 34.1% for the year
ended 30 January 2022. The tax rate for the year is
above the 19% UK corporation tax rate due to c.£2m
of M&A related costs recognised in the year that are
non-deductible for tax purposes. These primarily rate
to c.£1m of acquisition transaction costs and £0.8m
of accrued earn-out recognised in the year.
The reported tax charge for the prior year included the
impact of the change in corporation tax rate from 19%
to 25% on deferred tax which increased the deferred tax
liability by £5.7m. Excluding the impact of the increase
in rate for deferred tax, the effective tax rate for the year
ended 30 January 2022 would be c.21%.
Earnings Per Share (EPS)
Adjusted basic EPS* for the year was 29.66p, an
increase of 37.4% on the prior year due to higher
operating profits and the adverse impact on the prior
year EPS from an increase in deferred tax as detailed
above. Basic reported EPS was 30.47p, an increase
of 21.4% on last year. Based on a diluted weighted
average of 112,178,721 shares, diluted EPS was 30.22p
(2021/22: 24.95p).
Dividends
The Group resumed dividends, after the pandemic
related pause, with the announcement in September
2021 of a 2.0p interim dividend and a one-off special
dividend of 10.0p in recognition of the benefit from a
number of one-off cash inflows that had been received
but that were not part of normal trading.
Segmental
performance –
reported revenue
Soft drinks
+16%
Cocktail solutions
+16%
Other
+41%
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Strategic Report Corporate Governance Accounts
The Group’s dividend policy aims to deliver a
progressive and sustainable dividend to shareholders
that has regard to current performance trends including
revenue, profit after tax and cash, and that satisfies
certain guiding principles:
• Dividend cover: targeting two times cover
• Payout ratio: targeting 50% of free cash flow*
• Consistent with medium-term profit outlook
Based on this framework, and following the interim
dividend of 2.50p per share paid in October 2022, the
Board is recommending a final dividend for the period
of 10.60p. This will bring the full year dividend to 13.10p
per share (2021/2022: 12.0p per share) which provides
two times dividend cover and delivers a payout ratio
of 43%. The Board believes the final dividend growth of
6.0% is sustainable. Subject to approval by shareholders
at the AGM in May, the final dividend will be paid to
holders of ordinary shares on the register as of 12 May
2023 with an ex-dividend date of 11 May 2023.
Balance Sheet and Cash Flow
The balance sheet as at 29 January 2023 recognises
the first time inclusion of the Boost Drinks acquisition
and the associated assets and liabilities of this company.
The Group remains financially strong with net cash at
bank, no material trade debt issues, healthy inventory
levels, a defined benefit pension surplus and a £20.6m
increase in the net asset base to £268.8m.
Inventory values have increased due to the Boost Drinks
acquisition, inflation and a planned stock-build to
support the installation of our new PET line as part of
our Cumbernauld factory refresh. Year end payables
and accruals have increased, reflecting the Boost Drinks
acquisition, significant capital spend accruals and the
timing of our month end payment run which took
place after the year end in 2022/23 but before the year
end in the prior year.
Global disruptions and geo-political challenges have
reinforced the importance of resilient supply chain
capabilities. We remain committed to internal
manufacturing when scale and capabilities permit,
and recognise the value of a well-invested asset base.
After a period of restricted spend associated with
the pandemic, our capital programme resumed with
total additions in the year of £17.0m (2021/22: £5.8m)
comprising £14.6m of cash capital expenditure and
£2.4m of accruals. This reflects investment in
production capacity, capability and sustainability. The
commissioning of a new can filler in Milton Keynes
delivers the capability and capacity for 250ml cans and
alcoholic products for the first time. We have utilised
these facilities to successfully bring a proportion of
FUNKIN can requirements in-house. Our multi-year
production line refresh in Cumbernauld continues to
plan with an upgraded PET line scheduled for
commissioning by summer 2023.
Despite the return to a more typical level of capital
investment, the higher inventory levels and the
inclusion of the Boost Drinks acquisition, return on
capital employed remains robust at 18.0%, a modest
decline from 19.9% in 2021/22.
Acquisitions
In the year ended 29 January 2023, the Group
completed the early full acquisition of MOMA Foods
Limited and the acquisition of Boost Drinks Holdings
Limited. Both acquisitions were fully funded from
Group cash reserves and the Group remains net cash
positive. The primary financial implications of these
acquisitions were:
MOMA Foods Limited
The Company acquired an initial 62.8% equity stake in
MOMA in December 2021. MOMA was consolidated
as a fully owned subsidiary in the 2021/22 accounts,
with a non-controlling interest reported in respect
of the 38.2% not acquired at that time, alongside
a put option liability that recognised a commitment
(contingent consideration) to secure full A.G. Barr
ownership by the end of financial year 2024/25.
In December 2022 the Company acquired the
remaining 38.2% equity stake in MOMA. As A.G. Barr
now owns a 100% equity stake in MOMA, the minority
interest in the business and the put liability have been
removed from the balance sheet. There has been
no change in the year to goodwill or brand valuation
and the removal of the contingent consideration has
resulted in a net non-cash credit to the income
statement of £1.6m. This release has been recognised
within adjusting items as detailed in the adjusting items
section above.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Boost Drinks Holdings Limited
In December 2022 the Group acquired 100% of Boost
Drinks Holdings Limited for an initial consideration
of £20m, on a cash-free debt-free basis. Boost will
operate as a standalone business unit during a two year
earn-out period. The financial reporting impact of the
Boost acquisition is as follows:
• Initial acquisition consideration (£19.9m) recognised
within the consolidated financial position as £16.9m
of brand intangibles, £1.9m of goodwill intangibles
and net assets of £1.1m
• Consolidated in Group results from December 2022
• Boost revenue recognised within ‘Soft Drinks’
segmental reporting
• The acquisition includes a potential additional
consideration of up to £12m, contingent on the
future performance of the Boost business over a
two year period from completion. Any earn-out will
be charged through the Group’s income statement
over the earn-out period and reported as an
adjustment to reported profit. The financial
statements ending 29 January 2023 included
£0.8m in respect of this earn-out accrual.
Financial risk management
The Group’s risk management process is owned by
the Board and operates at every level within the
business to support the successful delivery of our
strategic objectives and financial plans. The process is
based on a balance of risk and opportunity, determined
through assessment of the likelihood and impact of the
risk and within the context of the Group’s risk appetite,
as established by the Board. Risks are monitored
throughout the year with consideration to internal and
external factors, and updates to risks and mitigation
plans are made as required. The principal risks that
could potentially have a significant impact on our
business have not changed since the end of the
financial year.
Treasury and commodity risk management
The treasury and commodity risks faced by the Group
continue to be identified and managed by the Group
Treasury and Commodity Committee whose activities
are carried out in accordance with Board approved
policies and subject to regular Audit and Risk
Committee reviews. No transactions are entered into
for speculative purposes. Key financial risks managed
by this committee include exposures to foreign
exchange rates and the management of the Group’s
debt, commodity and liquidity positions. The Group
uses financial instruments to hedge against foreign
currency exposures.
The Group seeks to mitigate risks in relation to
the continuity of supply of key raw materials and
ingredients by developing strong commercial
relationships with its key suppliers. The Group
manages commodity pricing risk actively and where
commercially appropriate will enter into fixed price
supply contracts with suppliers to reduce risk.
The Group enters into insurance arrangements to
cover certain insurable risks where external insurance
is considered by management to be an appropriate
economic means of mitigating these risks.
As at 29 January 2023, the Group had £40m of funds
held on short-term, interest earning, deposit with two
relationship banks. In addition to the Group’s cash
position, the Group had £20m of committed and
unutilised debt facilities, consisting of a revolving
credit facility with our principal relationship bank.
This expires in February 2026. Our funding
requirements and facilities are continually reviewed
to ensure they remain appropriate, providing a balance
of security and optionality.
Accounting Policies
The Group’s financial statements have been prepared
in accordance with International Financial Reporting
Standards and the Listing Rules of the Financial
Conduct Authority.
There have been no changes to the accounting policies
applied this year. All new or amended standards that are
applicable have been adopted with no material impact
on the results for the current and prior reporting periods.
Pensions
The Group continues to operate two pension plans:
the A.G. Barr p.l.c. (2005) Defined Contribution Pension
Scheme and the A.G. Barr p.l.c. (2008) Pension and
Life Assurance Scheme. The latter is a defined benefit
scheme based on final salary, which also includes
a defined contribution section for pension provision
to senior managers.
The defined benefit scheme has been closed to new
entrants since 5 April 2002 and closed to future accrual
for members in May 2016. Existing and new employees
have been invited to join the Company-wide defined
contribution scheme.
The defined benefit pension scheme triennial valuation
as at April 2020 identified a £7.7m deficit on a technical
provisions basis as at that date, reflecting the substantial
reduction in the value of the Scheme’s investments
which occurred at the start of the pandemic. The
Company agreed with the Pension Scheme Trustee
that the ongoing deficit recovery plan of a £1.0m per
annum Company contribution should continue for the
next three years with the intention of eliminating the
deficit over the medium-term. This plan was approved
Financial review continued
Our core brand strength,
our clear strategy and
our engaged workforce
provide a strong
foundation to deliver
sustainable long-term
shareholder value.
61
Strategic Report Corporate Governance Accounts
by the Pension Regulator. A deficit recovery
contribution of £1.0m was made by the Company
under this arrangement in May 2022. At the end of
September 2022 gilt yields rose rapidly in reaction to
the UK Government’s mini budget. As gilt yields rose,
the value of liability driven investment (LDI) assets held
by many defined benefit pension schemes in the UK
fell sharply. Additional cash was required in order to
rebalance the Company’s defined benefit pension
scheme’s LDI portfolio and maintain the majority of the
hedging that the Scheme had in place. The Trustee
took a number of actions to meet these recapitalisation
calls. In support, the Company made a further payment
of £1.0m to the Scheme in October 2022 as a
prepayment of the deficit recovery contribution due in
May 2023 and also pre-paid the Central Asset Reserve
(CAR) contribution payments of £1.5m due in 2023. The
next triennial actuarial valuation will be as at April 2023.
On an IAS 19 valuation basis, which is determined before
the benefit of the CAR funding arrangement, the deficit
of £1.0m as at 30 January 2022 improved to a surplus of
£2.4m as at the balance sheet date. As noted above,
2022 was an unusually volatile year for the pension
industry generally and the Group scheme was impacted
by this. The A.G. Barr defined benefit scheme has a long
established financial risk strategy that includes pensioner
buy-in policies and asset hedging. The purpose of the
strategy is to provide an element of protection against
pension assumption and financial market volatility.
During the year 2022/23 this strategy resulted in the
scheme reporting both a significant decrease in the
scheme’s liabilities, driven by a large increase in discount
rates, and a similarly significant decrease in the value of
scheme assets due to changes in financial markets,
particularly the bond market. The move from deficit to
surplus is attributable to these changes and to the
£4.9m (2021/22: £2.4m) Company contributions made
in the year. The Company contributions comprise both
agreed 2022/23 contributions of £2.4m and £2.5m of
2023/24 contributions paid in advance to support
scheme liquidity.
The Group continues to work proactively with the
Pension Trustee to further de-risk the pension liabilities
and secure the commitments to employee benefits as
part of the Group’s ongoing strategic risk management.
The Group has, again, delivered a strong financial
performance despite the challenging economic
backdrop. This performance demonstrates the
consistent delivery of our strategy and a successful
blend of resilience, agility, efficiency and strong
commercial execution. In an environment that remains
volatile and challenging, the business has a well
invested asset base backed by strong financial
fundamentals and is well placed to continue to invest
for the future in our brands, assets and people.
Stuart Lorimer
Finance Director
28 March 2023
Note: Financial metrics marked with an asterisk are non-GAAP
measures. Definitions and relevant reconciliations are provided in
the Glossary on pages 199 to 204.
FINANCIAL STATEMENTS
Can be found on pages 138 to 198
GLOSSARY
Can be found on pages 199 to 204
62
A.G. BARR p.l.c. Annual Report and Accounts 2023
The Board is responsible for the
Group’s risk management and
internal control systems and for
reviewing their effectiveness,
supported by the Audit and
RiskCommittee.
Risk management
Julie A. Barr
Company Secretary
Risk management approach
A risk management framework is in place, which
sets out the ongoing processes for the identification,
assessment and management of risks, and for their
ongoing monitoring and review. The Board has
defined its risk appetite in a number of key areas for the
business – this sets out the relative level of risk that the
Group is prepared to seek or accept in the pursuit of
its long-term strategic objectives. The aim is to ensure
that the risks taken by the Group fall within its defined
riskappetite.
Effective risk management is essential to enable us to
achieve our operational and strategic objectives and
deliver long-term value creation. During the reporting
period we have continued to enhance our culture of
risk management throughout the organisation, which
will contribute towards the successful execution of the
Group’s long-term strategy.
Robust risk assessment
The risk management framework sets out a systematic
approach to risk management, which is designed to
identify risks to the business, regardless of source. Once
identified, risks are assessed according to the likelihood
and impact of the risk occurring and an appropriate risk
response is determined in line with the Group’s risk
appetite. Risks are re-assessed based on the strength
of the mitigating controls implemented. The
implementation of risk mitigation plans is subject to
ongoing monitoring and review. A risk-scoring matrix
is used to ensure that a consistent approach is taken
across the business at both a corporate and functional
level. This risk assessment and review process is
documented in the appropriate risk register. Risks are
reviewed on an ongoing basis; the Group’s risk register
is formally reviewed by the Risk Committee every two
months and by the Board and the Audit and Risk
Committee (“ARC”) twice each year.
The Board carries out a robust assessment of the
Group’s emerging risks at least once each year using an
horizon-scanning approach together with internal and
external insights. The purpose of these assessments
is to identify key emerging risks for further evaluation,
monitoring and action planning. During the year, a new
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Strategic Report Corporate Governance Accounts
structure and processes were implemented to improve
the identification and management of emerging risks
for the Group, linked to the Board’s strategic planning
process. Standalone emerging risks and opportunities
registers have been put in place for each of Barr Soft
Drinks and FUNKIN; emerging risks are captured on the
relevant risk register and are subject to annual review by
a group comprising senior executives from across the
business, including the CEO and Finance Director.
Recommendations arising from that review are
presented to the Board and the output therefrom
informs the Group’s strategy review presented to the
Board each year. The Risk Committee reviews the
emerging risk registers at least annually. Emerging risks
remain on the relevant emerging risk register until they
are captured on an appropriate risk register or are no
longer deemed to be an emerging risk. The Board has
completed a robust assessment of the Group’s
emerging risks, including those related to climate
change and technology, during the period.
Risk control assurance
Internal audit work is undertaken by an independent
organisation which develops an annual internal audit
plan having reviewed the Group’s risk register and
following discussions with the external auditors,
management and members of the ARC.
During the year the ARC has reviewed reports covering
the internal audit work. This has included assessment of
the general control environment, identification of any
control weaknesses and quantification of any associated
risk, together with a review of the status of mitigating
actions. The ARC has also received reports from
management in relation to specific risk items, together
with reports from the external auditors, who consider
controls to the extent necessary to form an opinion as
to the truth and fairness of the financial statements.
The Group’s internal control and risk management
systems are designed to manage rather than eliminate
the risk of failure to achieve business objectives and can
provide only reasonable but not absolute assurance
against material misstatement or loss.
The report of the ARC can be found on pages 85 to 88.
Principal risks and uncertainties
The Board has carried out a robust, systematic
assessment of the principal risks facing the Group
during the period, including those which would
threaten its business model, future performance,
solvency, liquidity or reputation. The table below sets
out the Group’s principal risks as determined by the
Board, the net risk ratings, the net risk movement from
the prior year and examples of corresponding controls
and mitigating actions. The Group’s principal risks have
continued to evolve during the year against the
backdrop of a challenging and uncertain external
environment; management has continued to focus on
the implementation of appropriate mitigating actions
and controls, in line with the Group’s risk appetite. The
principal risks set out in the table below represent the
Group’s current risk profile – these are not intended to
be an exhaustive list of all risks facing the Group. The
principal risks are prioritised on a net risk basis.
Covid-19
As the Covid-19 crisis continued during the early part
of the year, our primary concern remained the welfare
of our employees, their families and the communities
in which we operate. We followed Government advice
at all times as a minimum throughout the Covid-19
pandemic and took action as appropriate to protect our
employees and our operations. Following the relaxation
of Covid-related restrictions in March 2022, we
continued to take appropriate actions to minimise the
impact on our business, with the health and safety of
our employees remaining paramount.
Effective risk
management is
essential to enable
us to achieve our
operational and
strategic objectives
and deliver long
term value creation.
64
A.G. BARR p.l.c. Annual Report and Accounts 2023
The net risk movement from the prior year for each principal risk is set out in the table below.
Principal risks and uncertainties
Net risks relating to the Group
Risk management continued
Movement: No change Increased Decreased New
Risk Impact Controls and mitigating actions
Net risk
impact
Net risk
likelihood
Net risk
rating
Movement
Government
intervention on
climate change and
environmental
issues, e.g. packaging
waste
Government intervention
on climate change and
environmental issues, e.g. the
introduction of a Deposit
Return Scheme in England or
the introduction of a carbon
tax, could have an adverse
impact on consumer
consumption patterns, sales
and operating profits.
The increased pace of change and level of environmental
campaigning in relation to climate change and areas such as
packaging reported last year has continued during the year.
We have clearly defined responsibility commitments with
regard to waste, water, energy, sustainable sourcing and
packaging. We continue to work constructively with the British
Soft Drinks Association, the UK and Scottish governments,
and other key stakeholders in relation to potential
interventions, such as the planned introduction of a Deposit
Return Scheme (“DRS”) in Scotland and the expected
introduction of a DRS in England.
Various environmental sustainability related workstreams
continue to be progressed through our “No Time To Waste”
environmental sustainability programme – further details are
set out below.
Moderate
High High
Loss of product
integrity
A loss of product integrity
in the manufacturing supply
chain could lead to a product
withdrawal or recall.
Appropriate risk assessments are carried out on a regular
basis and robust quality controls and processes are in place
to maintain the high quality of our products. Product recall
procedures are tested regularly.
Moderate
Low
Moderate
Environmental
Social Governance
(“ESG”) risks
An inability to meet the
Group’s ESG commitments
could impact revenue
if consumers choose to
purchase and consume
alternative brands,
Governments impose
additional taxes or the
associated reputational
damage makes it difficult
to recruit talent.
ESG risks were classified as a new principal risk for the
Group in the prior year due to the increased focus from all
stakeholders (including Governments, customers, consumers,
competitors, employees and investors) on ESG matters,
in particular environmental sustainability.
Five environmental sustainability related workstreams
continue to be progressed through our Group-wide “No Time
To Waste” (“NTTW”) environmental sustainability programme:
plastic and packaging, net-zero, sustainable sourcing, water
and waste. The NTTW programme reports to the NTTW
Steering Group, which is responsible for setting the Group’s
environmental strategy, for achieving the Group’s
environmental targets, and for monitoring and managing
the associated risks. The NTTW Steering Group is overseen
by the ESG Board Committee. Further detail is provided in the
Responsibility Report on pages 30 to 55.
Moderate
Low
Moderate
65
Strategic Report Corporate Governance Accounts
Movement: No change Increased Decreased New
Risk Impact Controls and mitigating actions
Net risk
impact
Net risk
likelihood
Net risk
rating
Movement
Changes in consumer
preferences,
perception or
purchasing
behaviour
Consumers may decide
to purchase and consume
alternative brands or spend
less on soft drinks.
The Group offers a broad range of branded products across
a range of flavours, subcategories and markets which offer
choice to the end consumer. Changing consumer attitudes
and behaviours are monitored on an ongoing basis and
inform our brand plans and new product development.
Through investment in innovation across the year we have
adapted our portfolio to align with these changing consumer
needs.
Moderate
Low
Moderate
Failure of critical IT
systems or a breach
of cyber security
A failure of critical IT systems
could result in a loss of key
systems, business interruption,
lost sales or lost production.
A cyber security breach
could lead to operational
disruption, financial loss and
reputational damage.
IT assets within the Group are proactively managed and
procedures exist that support effective and efficient recovery.
Robust business continuity plans and contingency measures
are in place and are regularly tested. Appropriate processes
and controls related to IT systems resilience and recovery
capability are in place.
The risk of cyber attacks continues to increase on an ongoing
basis, including the risk of a ransomware attack. Appropriate
cyber risk monitoring controls are in place and various actions
have been taken during the year to mitigate cyber security
related risks and facilitate business recovery in the event of an
attack. During the year, a ransomware simulation training
exercise took place for the crisis management team to ensure
the business is as prepared as possible in the event of an attack.
Employee awareness campaigns and training continued
during the year to increase employee cyber risk awareness.
A Digital Governance Group is in place, overseen by the Risk
Committee, the purpose of which is to manage the risks
related to the Group’s externally facing digital properties.
Moderate
Low
Moderate
Failure of the
Group’s operational
infrastructure
A catastrophic failure of the
Group’s major production
or distribution facilities could
lead to a sustained loss in
capacity or capability.
Assets within the Group are proactively managed and
maintained. Risk assessments are carried out on a regular
basis and appropriate actions taken. Robust business
continuity plans are in place and are regularly tested.
The business continuity employee training programme
continued during the year.
Moderate
Low
Moderate
66
A.G. BARR p.l.c. Annual Report and Accounts 2023
Risk Impact Controls and mitigating actions
Net risk
impact
Net risk
likelihood
Net risk
rating
Movement
Financial risks
The Group’s activities expose
it to a variety of financial risks
which include market risk
(including medium-term
movements in exchange
rates, interest rate risk and
commodity price risk), credit
risk and liquidity risk.
Financial risks are reviewed and managed by the Treasury
and Commodity Committee, which seeks to minimise
adverse effects on the Group’s financial performance through
hedging known currency exposures throughout the year.
The Group’s finance team reviews cash flow forecasts
throughout the year, with headroom against banking
covenants assessed regularly. The finance team uses external
tools to assess credit limits offered to customers, manages
trade receivable balances vigilantly and takes prompt action
on overdue accounts. The Group’s financial control
environment is subject to review by both internal and external
audit. Internal audit’s focus is to work with and challenge
management to ensure an appropriate control environment
is maintained.
Moderate
Low
Moderate
Loss of continuity
of supply of major
raw materials
The loss of continuity of
supply of raw material
ingredients and/or packaging
materials could impact our
ability to manufacture, with
an adverse impact on the
Group’s sales and operating
profits.
There is a robust supplier selection process in place. Supplier
performance is monitored on an ongoing basis and audits
are undertaken for major suppliers. Dual sources of supply
are sourced wherever possible.
Commodity risks are managed by the procurement team and
reviewed by the Treasury and Commodity Committee.
Contingency measures are in place and are tested regularly.
During the early part of the year we continued to work closely
with key raw material suppliers in relation to the ongoing
impact of Covid-19 on their businesses.
Moderate
Low
Moderate
Inability to protect
the Group’s
intellectual
property rights
Failure to protect the Group’s
intellectual property rights
could result in a loss of
brand value.
The Group invests considerable effort in proactively
protecting its intellectual property rights, for example through
trademark and design registrations and vigorous legal
enforcement as and when required.
Moderate
Low
Moderate
Risk management continued
Movement: No change Increased Decreased New
67
Strategic Report Corporate Governance Accounts
Movement: No change Increased Decreased New
Risk Impact Controls and mitigating actions
Net risk
impact
Net risk
likelihood
Net risk
rating
Movement
Adverse publicity in
relation to the soft
drinks industry, the
Group or its brands
Adverse publicity in relation
to the soft drinks industry, the
Group or its brands could
have an adverse impact on
the Group’s reputation,
consumer consumption
patterns, sales and operating
profits.
Our risk management process is designed to identify and
monitor events that may impact the Group as a result of
adverse publicity and to ensure that controls are in place
to manage these risks.
Processes are in place to ensure compliance with health and
safety legislation and ethical working standards, and these are
regularly reviewed by the Board and Executive Committee.
Quality standards are well defined, implemented and
monitored. Our environmental commitments are being
progressed through our “No Time To Waste” environmental
sustainability programme – further details are set out above.
The Group maintains and develops ISO 9001 and 14001
systems and AA rated BRC standards which are subject
to annual external audits, with any non-conformances
addressed in a timely manner. The Company also holds
ISO 45001 certification.
Nutritional information is shown on all of our Barr Soft
Drinks products and we are long-standing users of the
UK Government’s voluntary front of pack nutritional
labelling scheme.
As noted above, the Group followed Covid-related advice
from the Government at all times throughout the crisis as a
minimum, prior to the relaxation of Covid-related restrictions
in March 2022.
Low Moderate Moderate
68
A.G. BARR p.l.c. Annual Report and Accounts 2023
Risk Impact Controls and mitigating actions
Net risk
impact
Net risk
likelihood
Net risk
rating
Movement
Failure to
maintain customer
relationships or take
account of changing
market dynamics
Failure to maintain
appropriate customer
relationships or a reduction
in the customer base could
have an adverse impact
on the Group’s sales and
operating profits.
The Group offers a broad range of brands that it
manufactures and distributes through a variety of trade
channels and customers. Performance is monitored closely
by the Board and Executive Committee by trade channel
and customer as appropriate. This includes monitoring of
metrics which review brand equity strength, financial and
operational performance.
The Group focuses on delivering high quality products
and invests heavily in building brand equity. We work closely
in partnership with our customers on an ongoing basis.
Members of the senior management team meet with key
customers throughout the year.
During the early part of the year we continued to engage
with customers in relation to control measures put in place
to minimise Covid-related risks for our respective employees
and the wider public.
Low Moderate Moderate
Consumer rejection
of reformulated
products
Consumers may decide
to purchase and consume
alternative brands or spend
less on soft drinks.
Our extensive innovation and reformulation programme was
completed prior to the introduction of the Soft Drinks Industry
Levy in April 2018. 98% of our current Barr Soft Drinks
portfolio produced by volume contains less than 5g of total
sugars per 100ml. Since April 2022, 98% of our Barr Soft
Drinks portfolio has been exempt from the new regulations
applicable to High Fat, Sugar and Salt (‘HFSS’) products.
We recognise that the risk of consumer rejection of the
enhanced sweeteners used in our reformulated products
remains. We continue to closely monitor consumer
acceptance levels and brand performance across our total
portfolio and take appropriate mitigating actions.
Low Moderate Moderate
Risk management continued
Movement: No change Increased Decreased New
69
Strategic Report Corporate Governance Accounts
Viability statement
In accordance with provision 31 of the UK Corporate
Governance Code 2018, the directors have assessed the
viability of the Company over a three year period to
January 2026, taking account of the Group’s current
financial and market position, future prospects and the
Group’s principal risks, as detailed in the Strategic Report.
The directors have determined that a three-year period is
an appropriate time frame given the dynamic nature of
the FMCG sector and given that this is in line with the
Group’s strategic planning period. The starting point for
the viability assessment is the strategic and financial plan
which makes assumptions relating to the economic
climate, market growth, input cost inflation and growth
from the Group’s performance drivers. The prospects of
the Group have been taken into account, including the
size of the current market, the strength of the Group’s
brands and past production capacity investment. The
model was then subject to a series of theoretical “stress
test” scenarios based on the materialisation of principal
risks, with input from the business functions.
The directors have considered the impact of a number
of severe but plausible scenarios associated with the
principal risks, including those set out in the table below.
The directors also measured the impact of a number of
scenarios occurring together. Finally, a reverse “stress test”
was performed allowing the Board to assess circumstances
that would render its business model unviable.
As part of our Task Force on Climate-related Financial
Disclosures (“TCFD”) the Group has assessed potential
financial impacts from climate change to the business.
The financial plan for the Group includes the best
estimate of the impacts of climate change on financial
performance, including material cost inflation, an
increase in climate-related regulatory costs, and a change
to consumer behaviour. None of the physical and
transition risks which are considered material to our
business would present a risk to viability over the planning
period. These risks are detailed on pages 47 and 48.
Credit facilities
The outputs of these scenario tests were reviewed
against the Group’s current and projected future net
cash/debt and liquidity position. The Group closed the
financial year with net cash at bank* of £52.9m. In
addition, the Group had £20m of committed and
unutilised debt facilities, consisting of one revolving
credit facility with one bank. The revolving credit facility
has two financial covenants, relating to interest cover
and leverage, and a material adverse change clause.
Result of stress tests
Under the most severe but plausible combined scenarios
above, and with no cost mitigation, the Group’s liquidity
requirements would be satisfied within existing credit
facilities. Should the financial loss be worse than this
scenario assumes, sizeable cost mitigation opportunities,
such as a reduction in brand investment, a reduction in
capital investment, a reduction in discretionary overhead
spend, reduced dividend payments, and a business
reorganisation, would be available to the Group to
further preserve viability.
The reverse stress test showed that a volume drop
significantly beyond our severe but plausible scenarios,
both in depth and duration, would be required in order
to render the business model unviable. These
circumstances are therefore considered implausible.
The results of these tests were reviewed taking into
account the Group’s current position, the Group’s
experience of managing adverse conditions in the past
and mitigating actions available to the Group. Based on
this assessment, the directors have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over
the three year period to January 2026.
The Strategic Report set out on pages 1 to 69 of this
annual report has been approved by the Board.
By order of the Board
Julie A. Barr
Company Secretary
28 March 2023
Scenario Estimated impact
Disruption as a result of cyber attack, resulting in
factories ceasing production.
No sales for the month following attack, followed by a
gradual return to normalised levels from month 5 onwards.
Significant incremental one-off costs as a direct result.
Significant adverse damage to one of the Group’s
principal brands (e.g. IRN-BRU).
A sizeable reduction (in the region of 40%) in brand
revenue, sustained over the duration of the viability period.
Significant changes in consumer preferences and
governmental impact in relation to sugar, plastics and
the introduction of a Deposit Return Scheme (“DRS”),
specifically in Scotland.
A reduction in volumes sold (<5%) over and above
current estimates as a result of the DRS, from the
proposed DRS implementation date until the end
of the viability period.
The impact of a pandemic (e.g. Covid-19), associated
restrictions, and a consequent channel shift and
reduction in consumer demand.
A reduction in revenue (in the region of 10%) for one year,
to the extent experienced during the Covid-19 pandemic.
Rising costs across energy and material supplies. Substantial cost increases suffered for the duration of the
viability period, with consequential impact on pricing and
volumes sold (in the region of 2% reduction).
* Items marked with an asterisk are non-GAAP measures. Definitions and reconciliations are provided in the Glossary on pages 199 to 204.
70
A.G. BARR p.l.c. Annual Report and Accounts 2023
Board of Directors
Mark Allen OBE
L.L.B. (Hons)
Chair
Roger A. White
M.A. (Hons)
Chief Executive
Stuart Lorimer
BAcc. (Hons), C.A., M.C.T.
Finance Director
Jonathan D. Kemp
B.A. (Hons)
Commercial Director
W. Robin G. Barr
C.A.
Non-Executive Director
David J. Ritchie
B.A. (Hons), A.C.A.
Non-Executive Director
Susan V. Barratt
B.A. (Hons), A.C.A.
Senior Non-Executive Director
Nicholas B. E. Wharton
A.C.A.
Non-Executive Director
Zoe Howorth
B.A. (Hons)
Non-Executive Director
Julie A. Barr
M.A. (Hons), L.L.B. (Dip), M.B.A. (Int.)
Company Secretary
Biography Biography
Mark’s early career in the police force
sparked an interest in law. After
completing a law degree Mark held a
variety of corporate roles, initially with
Shell and latterly with Dairy Crest where
he was CEO from 2007 to 2019. Mark
has held non-executive roles at
Howdens, Dairy UK, Warburtons and
Norcros plc, where he was Chair from
July 2020 until April 2021.
Mark brings a deep understanding of
consumer goods as well as significant
public company experience.
Roger is a member of the Board of
Management and Executive Council
and is a past President of the British Soft
Drinks Association. Previously held
numerous senior positions in food
group Rank Hovis McDougall. Scottish
plc Chief Executive of the year in 2010.
Honorary Doctorate from the University
of Edinburgh in 2014.
Roger brings a wealth of consumer
goods experience and corporate
leadership.
Stuart was with Diageo for 22 years
in a range of roles and countries,
ultimately as the FD for Diageo’s
Global Supply Operation.
Stuart brings significant experience
in FMCG in both alcoholic and soft
drinks sectors and a strong background
in governance and performance
management as a qualified CA and FD.
Jonathan has had a successful career
in various commercial roles within
Procter and Gamble.
Jonathan brings FMCG specialism
in customer business development,
consumer brand building and
commercial proposition optimisation.
Robin is a past President of the British
Soft Drinks Association. Robin brings
financial skills and an extensive
understanding of UK markets to
the Board.
As Executive Chair from 1978 to 2009
Robin brings a historical background
to discussions to the Board. He is a
qualified accountant and a Trustee of
the Company’s pension scheme.
David is a qualified Chartered
Accountant and former Chief Executive
of Bovis Homes Group plc (Bovis). He
joined Bovis in 1998 from KPMG as
Group Financial Controller, becoming
Group Finance Director in 2002 and
Chief Executive in 2008.
David brings significant operational
experience and governance knowledge
from his 15 years leading a listed
FTSE250 company, plus strong financial
oversight through his 30 years as a
financial professional.
Susan is a Chartered Accountant and
spent the early part of her career in
senior finance roles at Geest plc,
Whitbread plc and Laurel Pub
Company. Subsequently Susan has
been CEO at Eldridge Pope plc, Natures
Way Foods Limited and is currently CEO
of IGD, a not-for-profit organisation that
sits at the heart of the food industry.
Susan has also been Non-Executive
Chair of Higgidy Limited.
Susan brings considerable operational
and commercial experience and
knowledge of the FMCG industry.
Nick is a qualified Chartered Accountant
and has held senior executive roles
across retail and FMCG businesses.
He was formerly CFO of listed retailers
Pepco NV, Superdry plc and Halfords
Group plc and CEO of Dunelm plc. He
is a Non-Executive Director and Chair
of the Audit Committee of the Swedish
multinational personal care business
Oriflame Investment Holding plc,
having previously held similar roles at
Mothercare plc.
Nick brings extensive finance and
retail experience both in the UK and
internationally and substantial plc and
governance experience from executive
and non-executive roles on listed
company boards.
An economics graduate, Zoe has had a
successful career spanning a range of
roles at Procter and Gamble, United
Biscuits and The Coca-Cola Company
where she spent 16 years, culminating
in her role as UK Marketing Director
from 2010 – 2013. Zoe has also held a
number of non-executive director roles
with private companies.
Zoe brings extensive FMCG experience,
specifically across the food and
beverage sector, as well as consumer
brand marketing capability and direct to
consumer digital understanding.
Julie is a qualified lawyer with a
background in corporate law. In
addition to being Company Secretary,
she heads up the Group’s risk and
legal teams and sits on the Executive
Committee. She is also a Trustee of
the Company’s pension scheme.
If elected, Julie will replace her father
Robin Barr as a non-executive director.
Julie will step down as Company
Secretary but otherwise will continue
as an employee of the Company in her
current role. For the purposes of the UK
Corporate Governance Code, Julie Barr
is not independent.
Term of Office Term of Office
Joined the Company in July 2021 as a
Non-Executive Director. Appointed
Chair in March 2022.
Joined the Company in 2002
as Managing Director. Appointed
Chief Executive in 2004.
Joined the Company as Finance
Director in January 2015.
Joined the Company in 2003
as Commercial Director.
Joined the Company in 1960.
Appointed Director in 1964 and Chair
in 1978. Retired as Chair and appointed
Non-Executive Director in 2009.
Joined the Company in April 2015
as a Non-Executive Director.
Joined the Company in January 2018
as a Non-Executive Director.
Joined the Company in November
2018 as a Non-Executive Director.
Joined the Company in July 2021
as a Non-Executive Director.
Joined the Company in 2004.
Appointed Company Secretary in 2008.
External Appointments External Appointments
Non-Executive Chair of Halo Foods Ltd. Non-Executive Director of Troy Income
& Growth Trust, Non-Executive Director
of William Jackson Food Group Limited,
Director of Elegantly Spirited Limited.
Non Executive Director of Carr’s
Group plc.
None. None.
CEO of WElink Homes UK, Chair of
Aspire LPP Limited.
CEO of The Institute of Grocery
Distribution, Non-Executive Director
of Edward Billington and Son Limited.
Non-Executive Director of Oriflame
Investment Holding plc.
Non-Executive Director of Water Babies
International, Non-Executive Director of
International Schools Partnership
Limited.
Non-Executive Director of Gabriel
Precision Oncology Limited.
Committee Membership Committee Membership
Nomination Committee (Chair). Environmental, Social and Governance
Committee.
Nomination Committee. Audit and Risk Committee
Nomination Committee
Remuneration Committee (Chair).
Audit and Risk Committee
Nomination Committee
Remuneration Committee
Environmental, Social and
Governance Committee.
Audit and Risk Committee (Chair)
Nomination Committee.
Remuneration Committee
Environmental, Social and
Governance Committee (Chair).
Environmental, Social and
Governance Committee.
71
Strategic Report Corporate Governance Accounts
Mark Allen OBE
L.L.B. (Hons)
Chair
Roger A. White
M.A. (Hons)
Chief Executive
Stuart Lorimer
BAcc. (Hons), C.A., M.C.T.
Finance Director
Jonathan D. Kemp
B.A. (Hons)
Commercial Director
W. Robin G. Barr
C.A.
Non-Executive Director
David J. Ritchie
B.A. (Hons), A.C.A.
Non-Executive Director
Susan V. Barratt
B.A. (Hons), A.C.A.
Senior Non-Executive Director
Nicholas B. E. Wharton
A.C.A.
Non-Executive Director
Zoe Howorth
B.A. (Hons)
Non-Executive Director
Julie A. Barr
M.A. (Hons), L.L.B. (Dip), M.B.A. (Int.)
Company Secretary
Biography Biography
Mark’s early career in the police force
sparked an interest in law. After
completing a law degree Mark held a
variety of corporate roles, initially with
Shell and latterly with Dairy Crest where
he was CEO from 2007 to 2019. Mark
has held non-executive roles at
Howdens, Dairy UK, Warburtons and
Norcros plc, where he was Chair from
July 2020 until April 2021.
Mark brings a deep understanding of
consumer goods as well as significant
public company experience.
Roger is a member of the Board of
Management and Executive Council
and is a past President of the British Soft
Drinks Association. Previously held
numerous senior positions in food
group Rank Hovis McDougall. Scottish
plc Chief Executive of the year in 2010.
Honorary Doctorate from the University
of Edinburgh in 2014.
Roger brings a wealth of consumer
goods experience and corporate
leadership.
Stuart was with Diageo for 22 years
in a range of roles and countries,
ultimately as the FD for Diageo’s
Global Supply Operation.
Stuart brings significant experience
in FMCG in both alcoholic and soft
drinks sectors and a strong background
in governance and performance
management as a qualified CA and FD.
Jonathan has had a successful career
in various commercial roles within
Procter and Gamble.
Jonathan brings FMCG specialism
in customer business development,
consumer brand building and
commercial proposition optimisation.
Robin is a past President of the British
Soft Drinks Association. Robin brings
financial skills and an extensive
understanding of UK markets to
the Board.
As Executive Chair from 1978 to 2009
Robin brings a historical background
to discussions to the Board. He is a
qualified accountant and a Trustee of
the Company’s pension scheme.
David is a qualified Chartered
Accountant and former Chief Executive
of Bovis Homes Group plc (Bovis). He
joined Bovis in 1998 from KPMG as
Group Financial Controller, becoming
Group Finance Director in 2002 and
Chief Executive in 2008.
David brings significant operational
experience and governance knowledge
from his 15 years leading a listed
FTSE250 company, plus strong financial
oversight through his 30 years as a
financial professional.
Susan is a Chartered Accountant and
spent the early part of her career in
senior finance roles at Geest plc,
Whitbread plc and Laurel Pub
Company. Subsequently Susan has
been CEO at Eldridge Pope plc, Natures
Way Foods Limited and is currently CEO
of IGD, a not-for-profit organisation that
sits at the heart of the food industry.
Susan has also been Non-Executive
Chair of Higgidy Limited.
Susan brings considerable operational
and commercial experience and
knowledge of the FMCG industry.
Nick is a qualified Chartered Accountant
and has held senior executive roles
across retail and FMCG businesses.
He was formerly CFO of listed retailers
Pepco NV, Superdry plc and Halfords
Group plc and CEO of Dunelm plc. He
is a Non-Executive Director and Chair
of the Audit Committee of the Swedish
multinational personal care business
Oriflame Investment Holding plc,
having previously held similar roles at
Mothercare plc.
Nick brings extensive finance and
retail experience both in the UK and
internationally and substantial plc and
governance experience from executive
and non-executive roles on listed
company boards.
An economics graduate, Zoe has had a
successful career spanning a range of
roles at Procter and Gamble, United
Biscuits and The Coca-Cola Company
where she spent 16 years, culminating
in her role as UK Marketing Director
from 2010 – 2013. Zoe has also held a
number of non-executive director roles
with private companies.
Zoe brings extensive FMCG experience,
specifically across the food and
beverage sector, as well as consumer
brand marketing capability and direct to
consumer digital understanding.
Julie is a qualified lawyer with a
background in corporate law. In
addition to being Company Secretary,
she heads up the Group’s risk and
legal teams and sits on the Executive
Committee. She is also a Trustee of
the Company’s pension scheme.
If elected, Julie will replace her father
Robin Barr as a non-executive director.
Julie will step down as Company
Secretary but otherwise will continue
as an employee of the Company in her
current role. For the purposes of the UK
Corporate Governance Code, Julie Barr
is not independent.
Term of Office Term of Office
Joined the Company in July 2021 as a
Non-Executive Director. Appointed
Chair in March 2022.
Joined the Company in 2002
as Managing Director. Appointed
Chief Executive in 2004.
Joined the Company as Finance
Director in January 2015.
Joined the Company in 2003
as Commercial Director.
Joined the Company in 1960.
Appointed Director in 1964 and Chair
in 1978. Retired as Chair and appointed
Non-Executive Director in 2009.
Joined the Company in April 2015
as a Non-Executive Director.
Joined the Company in January 2018
as a Non-Executive Director.
Joined the Company in November
2018 as a Non-Executive Director.
Joined the Company in July 2021
as a Non-Executive Director.
Joined the Company in 2004.
Appointed Company Secretary in 2008.
External Appointments External Appointments
Non-Executive Chair of Halo Foods Ltd. Non-Executive Director of Troy Income
& Growth Trust, Non-Executive Director
of William Jackson Food Group Limited,
Director of Elegantly Spirited Limited.
Non Executive Director of Carr’s
Group plc.
None. None.
CEO of WElink Homes UK, Chair of
Aspire LPP Limited.
CEO of The Institute of Grocery
Distribution, Non-Executive Director
of Edward Billington and Son Limited.
Non-Executive Director of Oriflame
Investment Holding plc.
Non-Executive Director of Water Babies
International, Non-Executive Director of
International Schools Partnership
Limited.
Non-Executive Director of Gabriel
Precision Oncology Limited.
Committee Membership Committee Membership
Nomination Committee (Chair). Environmental, Social and Governance
Committee.
Nomination Committee. Audit and Risk Committee
Nomination Committee
Remuneration Committee (Chair).
Audit and Risk Committee
Nomination Committee
Remuneration Committee
Environmental, Social and
Governance Committee.
Audit and Risk Committee (Chair)
Nomination Committee.
Remuneration Committee
Environmental, Social and
Governance Committee (Chair).
Environmental, Social and
Governance Committee.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Corporate Governance Report
Chair’s introduction
The Board
The Company is led by a strong and experienced board of
directors (the “Board”) which brings a depth and diversity
of expertise to the leadership of the Company. The Board
is committed to ensuring that it has an appropriate
balance of skills, experience and knowledge of the Group
to enable it to discharge its duties and responsibilities
effectively. The Nomination Committee report set out
below describes how the Board achieves that aim. The
Board currently has nine members, comprising three
executive directors, the non-executive Chair, four
independent non-executive directors and one non-
independent non-executive director. Biographical details
of the directors are set out on pages 70 and 71.
The roles of Chair and Chief Executive are separate and
there is a clear division of responsibilities between those
roles. The Chair leads the Board and ensures the effective
engagement and contribution of all non-executive and
executive directors. The Chair facilitates constructive
Board relations and ensures that Board meetings are
underpinned by a culture of openness and challenge,
with sufficient time made available to debate issues
arising. The Chair ensures that the Board receive accurate,
timely and clear information. The annual Board
performance evaluation referred to below evaluates the
Chair’s performance in these areas. The Chief Executive
Dear Shareholder,
This year’s Corporate Governance Report describes
our approach to governance and sets out how the
principles of the 2018 UK Corporate Governance Code
have been applied during the year. Information about
the operation of the Board and its committees, our
engagement with stakeholders, and an overview
of the Company’s system of internal controls are
also included.
Having completed nine years as a non-executive
director of the Company, seven of which were as Chair
of the Board, John Nicolson stood down from the
Board at the end of March 2022. I would like to thank
John for his valuable contribution to the business over
those nine years and in particular for his guidance and
leadership during his tenure as Chair. Otherwise there
were no changes to the Board during the year.
Further details of the Board’s composition are given on
pages 70 and 71.
Mark Allen OBE
Chair
28 March 2023
I am pleased to present our
Corporate Governance Report for
the year ended 29 January 2023
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Strategic Report Corporate Governance Accounts
has responsibility for all Group businesses and acts in
accordance with the authority delegated from the Board.
The non-executive directors support the development of
the Group’s strategy and provide constructive challenge
to the executive directors. S.V. Barratt fulfilled the role of
senior independent director during the year to 29 January
2023 and is available to shareholders if they have
concerns which have not been resolved via the normal
channels of Chair, Chief Executive, or the other executive
directors, or where communication through such
channels would be inappropriate.
The Board considers that S.V. Barratt, Z.L. Howorth,
D.J. Ritchie and N.B.E. Wharton are independent for
the purposes of provision 10 of the 2018 UK Corporate
Governance Code, issued by the Financial Reporting
Council in July 2018 (the “Code”), and that the
relationships and circumstances set out in that provision
which may appear relevant to the determination of
independence do not apply. The Board considers that
M. Allen OBE was independent for the purposes of the
Code prior to being appointed as Chair of the Board
on 31 March 2022. The Board considers that, on
appointment, the Chair was independent for the purposes
of provision 9 of the Code. M. Allen does not hold any
significant appointments in addition to his role as Chair
of the Company.
The Company’s Articles of Association provide that the
Company may by ordinary resolution appoint any person
who is willing to act to be a director, either to fill a vacancy
or as an addition to the existing Board. W.R.G. Barr will
retire from the Board at the Annual General Meeting
(“AGM”) and J.A. Barr will offer herself for election at the
AGM. The Articles of Association require directors to retire
and submit themselves for election at the first annual
general meeting following appointment and to retire
no later than the third annual general meeting after the
annual general meeting at which they were last elected
or re-elected. However, in order to comply with the Code,
all directors other than W.R.G. Barr will submit themselves
for re-election at the AGM. J.A. Barr will offer herself for
election at the AGM. Biographical details of the Board and
J.A. Barr as a proposed director are set out on pages 70
and 71 of this report.
Details of directors’ remuneration and interests in shares
of the Company are given in the Directors’ Remuneration
Report on pages 89 to 106.
Role of the Board
The Board is responsible for the long-term success
of the Group, determines the strategic direction of
the Group and reviews operating, financial and risk
performance. There is a formal schedule of matters
reserved for the Board, which is subject to annual
review and includes approval of the following:
• the Group’s annual business plan;
• the Group’s strategy, acquisitions, disposals and
capital expenditure projects above certain
thresholds;
• the financial statements;
• the Group’s tax strategy;
• the Group’s diversity and inclusion policy for the
Board and Executive Committee;
• the Company’s dividend policy;
• transactions involving the issue or purchase
of Company shares;
• borrowing powers;
• appointments to the Board;
• alterations to the Memorandum and Articles
of Association;
• legal actions brought by or against the Group
above certain thresholds; and
• the scope of delegations to Board committees,
subsidiary boards and the Executive Committee.
The Board is also responsible for the Group’s ESG
strategy. Responsibility for the development of policy,
strategy and operational management is delegated to
the executive directors and an Executive Committee,
which as at the date of this report includes the
executive directors and six senior managers.
The Board’s governance supports the delivery of its
strategy to deliver long-term sustainable value through:
• Leadership: the Board is collectively responsible for
the long-term sustainable success of the Company.
The composition of the Board and an explanation
of their skills, experience and contribution are set
out on pages 70 and 71. Further information on the
Board’s leadership, its division of responsibilities
and the role of the non-executive directors in
providing constructive challenge and supporting the
development of strategy is set out above. The Board
approves the Group’s strategy and annual budget,
reviews subsequent progress and makes decisions
related to matters reserved for the Board in order
to support the delivery of its strategy.
• Effectiveness: the Board’s governance framework
ensures the effectiveness of the Board. Please see
below for information on induction, training and
development for directors and the Board
performance evaluation.
• Accountability: the Audit and Risk Committee
Report (pages 85 to 88) and the report on Risk
Management (pages 62 to 69) describe how the
Board ensures a fair, balanced and understandable
assessment of the Company’s performance and
prospects and how it assesses its principal risks. The
Audit and Risk Committee Report sets out how the
Company maintains an appropriate relationship with
its external auditor, consistent with the Code and
statutory requirements.
• Remuneration: the Directors’ Remuneration Policy
(pages 107 to 121) and detailed remuneration report
(pages 89 to 106) describe how the Remuneration
Committee ensures that the executive directors’
remuneration is designed to promote the long-term
success of the Company.
• Shareholder relations and engagement: the section
172(1) statement set out below describes how the
Company engages with shareholders.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Section 172(1) statement
Stakeholder engagement
Effective engagement with our key stakeholders is
critical to the long-term success of the Company.
Understanding the perspectives of our stakeholders
and building good relationships enables their views
to be taken into account in Board and Committee
discussions and decision-making. The Board will
continue to focus on enhancing its engagement with
key stakeholders. Our key stakeholders that the Board
considers to be relevant to the business model, strategy
and Company success are set out in the table below,
together with how we engaged with them during
the year, and the impact of that engagement on the
Company’s strategy and the principal decisions taken
during the year. Further information on how we engage
with our key stakeholders is set out in the Strategic
Report on pages 1 to 69 and in the Directors’ Report
on pages 122 to 127.
Corporate Governance Report continued
Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Shareholders
We have regular discussions with, and briefings for, investors.
The Company endeavours to ensure senior management is
available to interact with existing and potential shareholders
on as flexible a basis as possible. The Chief Executive and
Finance Director offer meetings to institutional shareholders
twice annually as a minimum in order to communicate
business updates and to develop an understanding of their
views on performance against strategy, Environmental,
Social and Governance (‘ESG’) related matters, and other
matters of interest. All directors have the opportunity to
attend these meetings.
Board committee chairs seek engagement with shareholders
on significant matters related to their areas of responsibility.
The Chair ensures at each Board meeting that the Board as a
whole has a clear understanding of the views of shareholders.
Following the relaxation of Covid-related government
restrictions, shareholders were invited to attend the 2022 AGM
in person. All shareholders, including private investors, had the
opportunity to submit questions in advance of the AGM
and to participate in questions and answers with the Board
at the AGM on matters relating to the Company’s operation
and performance.
The Board assesses the effectiveness of engagement with
the investment community through measurement of the
number of analysts following the Company and the number
of meetings held with investors and analysts.
The Chief Executive and Finance Director brief the Board on discussions with investors
and institutional shareholders. Independent feedback following key meetings is
coordinated and provided to the Board by the Company’s brokers and financial PR
agencies on a regular basis.
Board members listen and respond to the views of investors and institutional
shareholders and feedback to the business as necessary. Following the temporary
suspension of dividend payments in 2020 and their subsequent resumption during
2021, with the payment of an interim dividend and a one-off special dividend in
October 2021, engagement with and feedback from major shareholders and the
investment community took place at investor roadshows held following the release
of the Company’s full year results for the year to January 2022, to ensure they were
supportive of the Board’s plans to recommend a final dividend in respect of that year to
shareholders. A final dividend for the year to January 2022 was subsequently approved
by shareholders at the Company’s Annual General Meeting held on 27 May 2022 (‘2022
AGM’) and paid in June 2022.
We engaged with key shareholders during the year in relation to various ESG related
matters. Feedback from our major shareholders and investor base on their key ESG
challenges influenced the ongoing agenda and operation of the Board’s ESG
Committee and reaffirmed the Board’s commitment to be net-zero across our own
operations by 2035 and across our full supply chain by 2050, if not sooner. These
decisions were taken by the Board with the aim of promoting the success of the
Company for its shareholders in the long term.
During the year, we engaged with key shareholders regarding the Company’s capital
allocation strategy. In line with this strategy, the Board took the key capital asset
investment decision during the year to approve the initial phases of a multi-year asset
replacement programme to replace PET and can line assets at the Cumbernauld
factory. The new factory layout will optimise employee safety, efficiency and material
flows. The project will also deliver ESG benefits in terms of providing PET lightweighting
opportunities via the move to market-leading 26/22 neck and cap dimensions, and the
introduction of tethered cap capability. The project was evaluated on a suite of financial
metrics designed to drive shareholder return over the long term.
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Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Shareholders
continued
During the year, the Board received regular updates on the Company’s planning activity
in relation to the introduction of a Deposit Return Scheme (‘DRS’) in Scotland. The
Board discussed and approved a contract with Circularity Scotland Limited (‘CSL’), the
not-for-profit organisation approved to discharge industry’s Scottish DRS legal
obligations, the purpose of which was to provide CSL with the right to receive further
funding under certain circumstances to support the costs of the Scotland DRS
administration during its first year of operation. This will help to ensure the successful
operation of the DRS in Scotland and Company compliance with the DRS regulations
for the long term benefit of shareholders.
During the year, the Board took the key decisions to approve the acquisition of Boost
Drinks Holdings Limited and the acquisition of the remaining minority (38.2%) equity
stake in MOMA Foods Limited. Both of these acquisitions demonstrate the Company’s
commitment to its growth strategy, focused on developing its portfolio in high growth
and functional categories for the long term benefit of shareholders.
During the year, the Chair of the Remuneration Committee wrote to all major
shareholders who had voted against the resolution to approve the Directors’
Remuneration Report put to shareholders at the 2022 AGM seeking feedback regarding
why they were unable to support the resolution and to understand their views. The
primary concern raised by the two shareholders who provided feedback in response
to this letter related to the structure and performance targets for the 2021 long-term
incentive arrangements – these were specific to the exceptional circumstances caused
by the Covid-19 pandemic and it is unlikely that they will be repeated. Shareholder
feedback from major shareholders and the investor base influenced the performance
metrics agreed for the directors’ annual bonus for the year to January 2023 and the
2022 LTIP awards.
During the year, the Chair of the Remuneration Committee also wrote to and engaged
with shareholders representing c.70% of the issued share capital of the Company
seeking their feedback on the Remuneration Committee’s proposals for the new
Directors’ Remuneration Policy that will be brought for shareholder approval at the
AGM in May 2023. Feedback from these shareholders informed the final proposed
Directors’ Remuneration Policy.
The Company will continue to engage with its shareholders on executive directors’
remuneration going forwards.
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Corporate Governance Report continued
Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Customers
We have regular engagement with our customers through
virtual or face-to-face meetings, conferences and events.
Regular reviews of joint business plans take place to ensure
that we are aligned on our shared goals.
During the early part of the year we continued to engage
with customers in relation to control measures put in place to
minimise Covid-related risks for our respective employees and
the wider public.
During the year we engaged with customers in relation
to key product launches. We also continued to engage with
customers on their views and attitudes towards plastic
packaging and the planned DRS in Scotland.
During the year, we engaged with our customers in relation
to a planned price increase, with the aim of mitigating the
impact of significant inflationary cost pressures on the business.
The Commercial Director provides a commercial update to every Board meeting.
A formal review of customers and channels is presented to and discussed by the
Board annually.
Information on customer service levels, including performance against a customer
service level KPI, is included in the Board papers for every meeting. We have worked
hard during the year to maintain good customer service levels despite significant supply
chain challenges, and also raw material and driver shortages. The Board also received
updates regarding customers’ data on their respective suppliers’ performance, which
indicated a good customer service performance from the Company compared to many
other suppliers.
Discussions with customers regarding Covid-related risks and controls influenced the
Board’s discussions and support for the Covid Steering Group’s decisions during the
early part of the year regarding the health and safety of our employees.
During the early part of the year, the Board discussed updates provided to it regarding
the impact of Covid-19 on different customer channels, customer investment plans and
customer management strategy.
Feedback from key customers regarding their ESG concerns and commitments
influenced the Board’s discussions during the year. For example, customer feedback
in relation to plastic packaging and their desire to reduce the use of and increase the
recyclability of plastics used in product packaging influenced the Board’s key decision
to support the move to increase the recycled PET content of our IRN-BRU and Rubicon
500ml plastic bottles to 100% rPET – see further below. Customer feedback also
influenced the Board’s key decision to continue to support the Group’s environmental
sustainability strategy, which is being delivered through the ‘No Time To Waste’
programme of activity, including the delivery of a number of initiatives under the plastics
and packaging workstream, for example the move to 100% recycled film and various
plastic lightweighting initiatives.
Customer feedback also influenced the Board’s key decision to approve the initial
phases of a multi-year asset replacement programme to replace PET and can line assets
at the Cumbernauld factory, which will deliver ESG benefits in terms of providing PET
lightweighting opportunities and the introduction of tethered cap capability, as noted
above.
Consideration of the changing requirements of the Company’s impulse customers
influenced the Board’s key decision to invest in a new single customer management
system with significantly enhanced capability, which will deliver growth in our impulse
business through digital transformation; ‘Winning in Impulse’ is a core foundation of the
Company’s business growth strategy.
Engagement with key customers during the year influenced the Board’s discussions and
decisions regarding the annual budgeting and long-term strategic planning processes
for the Group.
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Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Consumers
We are committed to engaging with our consumers through
a variety of channels regarding any questions, concerns or
feedback which they may have. Our consumer care team aims
to respond efficiently and effectively to all matters raised by
consumers, whether by email, telephone, social media or post.
Consumer research is conducted prior to the launch of
key products and in relation to key marketing campaigns,
as appropriate.
The Board gains insight into consumer needs, behaviours and
motivations through regular detailed brand reviews at Board
meetings throughout the year. The Board also reviews market
and consumer insight data at every Board meeting. The Board
receives presentations from senior members of management
on consumer trends, brands and key marketing initiatives.
The Commercial Director provides a marketing update to every Board meeting.
A formal review of brands and innovation is presented to and discussed by the
Board annually.
A structured research programme of consumer usage and attitudes is carried out on a
regular basis, which informs the Board’s risk review process and its discussions regarding
its appetite for risks and opportunities in this area. During the year, qualitative consumer
research was carried out across different focus groups; the results of this research
informed certain key brand plans for the following year.
During the year the Board received presentations on the performance of key brands,
innovation and marketing campaigns. The Board discussed and were supportive of the
brand and innovation strategy and key brand plans for the following year.
Research to understand consumers’ attitudes and behaviours towards environmental
sustainability influenced the Board’s key decision to approve the initial phases of a
multi-year asset replacement programme to replace PET and can line assets at the
Cumbernauld factory, which will deliver ESG benefits in terms of providing PET
lightweighting opportunities and the introduction of tethered cap capability, as noted
above. Consumer feedback also influenced the Board’s key decision to continue to
support the Group’s environmental sustainability strategy, which is being delivered
through the ‘No Time To Waste’ programme of activity, including the delivery of a
number of initiatives under the plastics and packaging workstream, as noted above.
Suppliers
We ensure that we source raw materials in a responsible manner
and require our suppliers to commit to our Supplier Code of
Conduct and to comply with the provisions of our Modern
Slavery Statement and Anti-bribery and Corruption Policy.
We seek to mitigate risks in relation to the continuity of supply
of key raw materials and ingredients by developing strong
commercial relationships with our key suppliers.
We have regular engagement with our suppliers through virtual
and face-to-face meetings, conferences and events.
During the early part of the year we continued to engage with
key raw material suppliers in relation to the impact of Covid-19
on their businesses in light of ongoing supply chain challenges.
We also continued to engage with third party contractors
regarding visits to Company sites, to ensure that only essential
activities were undertaken and that appropriate control
measures were in place to minimise Covid-related risks for
our respective employees and the wider public.
Updates on supply chain activities, including key suppliers, are provided to every Board
meeting and are considered and discussed by the meeting. A review of supply chain
strategy, including procurement, is presented to and discussed by the Board annually.
The Board approves all key supplier contracts above certain thresholds in accordance
with the Company’s Statement of Delegated Authorities.
During the year, the Company’s net-zero science-based targets were approved by the
Science Based Target Initiative. We have continued to work closely with our suppliers in
relation to our commitment to become net-zero across our own operations by 2035
and across our full supply chain by 2050, if not sooner.
During the year, the Board supported the move to 100% rPET for IRN-BRU and Rubicon
500ml, which was delivered in April 2022. Due to concerns raised by key suppliers
regarding the quality and security of supply of rPET, the Board took the key decision
to pause progress on the rPET programme for the remainder of the portfolio until such
time as higher quality material is available, anticipated to be following the introduction
of a DRS in Scotland.
During the year, the Board reviewed and approved the Group’s Modern Slavery
Statement, cognisant of the need to ensure that adequate processes are in place to
prevent modern slavery in the Group’s supply chain and to maintain its reputation for
high standards of business conduct.
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Corporate Governance Report continued
Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Suppliers
continued
During the year we engaged with key suppliers on matters
related to climate change, including innovation in sustainable
packaging.
The Company complies with the Prompt Payment Code
guidelines, paying in excess of 90% of its supplier invoices
on time.
Monthly cross-functional supplier performance scoring is
conducted; the results are shared with suppliers and discussed
at review meetings. Regular review meetings are held with key
suppliers to review various KPIs, including performance, risk
management and ESG objectives. An annual cross-functional
supplier review meeting is held which informs our sourcing
strategy for the following year. Quarterly credit checks are
carried out on suppliers to assess their financial health.
Engagement with key suppliers during the year informed the Board’s discussions and
decisions regarding the annual budgeting and long-term strategic planning processes
for the Group.
Employees
The Group is committed to engaging employees at all levels
regarding matters which affect them and the performance of
the Group. This is achieved in a number of ways, including the
use of regular briefing procedures, which twice yearly include
a report on trading results. Regular communication meetings,
including “town halls”, are held to keep employees up-to-date
with Group performance. Leadership team “hangouts” take
place on a monthly basis to keep this group updated and to
provide the opportunity for them to ask questions on business
related matters. Consultation meetings also take place when
the Company is making decisions that are likely to affect
employees’ interests, at which employee representatives’ views
are taken into account. The Group’s intranet site provides
up-to-date information regarding the Group’s activities. In
addition, an employee engagement survey “Your Voice Matters”
is carried out on an annual basis, which seeks feedback from
all employees on a range of areas; action plans are created in
response to the results of each survey. Employees’ opinions are
sought on various specific topics throughout the year.
In addition to the Company’s existing employee engagement
mechanisms, and as required by the UK Corporate Governance
Code, during the year the Nomination Committee reviewed
and approved the Board’s current mechanism for workforce
engagement, being a designated non-executive director,
as an appropriate mechanism for workforce engagement.
Z.L. Howorth was the designated workforce engagement
director during the year.
The continued appointment of a designated non-executive director as a mechanism for
workforce engagement strengthens the link between employees and the Board, helps
to build an open and transparent culture and to ensure that all employees have a voice
in the Company’s future success. It also helps the Board to make better informed
decisions based on the broad perspectives of the workforce. Updates on progress
regarding workforce engagement are provided at Board meetings throughout the year.
It was reported that, overall, the good level of workforce engagement had continued
during the year and feedback from the employee engagement sessions was generally
positive, with a high level of employee engagement and commitment to the business.
Discussion areas during these sessions included the ongoing impact of Covid-19 on the
business and employees’ health and safety and mental wellbeing in the early part of the
year, hybrid working arrangements, health and safety generally, employee
communications, employee pay and benefits, how executive remuneration aligns with
wider Company pay policy, Company purpose and leadership development. The Board
discussed the updates provided to it by the workforce engagement director throughout
the year and were supportive of the Covid Steering Group’s decisions during the early
part of the year regarding the health and safety of our employees.
The Board regularly reviews various employee metrics throughout the year, including
turnover and absenteeism data.
The results of the “Your Voice Matters” employee engagement survey carried out during
the year were presented to and discussed by the Board. The results of the survey were
generally positive, with a high employee response rate and overall employee
engagement score; the continued strong results in the area of health and safety and the
improvement in the area of diversity, equality and inclusion year-on-year were
particularly pleasing. The Board were supportive of local action planning activities which
would take place in response to the results of the survey.
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Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Employees
continued
A structured plan for workforce engagement is developed
for each year. During the year, this included face-to-face
engagement sessions held by Z.L. Howorth – supported
by the Chair and certain other non-executive directors –
for employees of different roles and levels across different
Company sites, the aim of which was to encourage
participation across the workforce in order to understand
their views on matters which affect them.
During the early part of the year the high level of engagement
with employees regarding Covid-related matters continued,
through regular communications and briefings and via the
Coronavirus portal on the intranet. The process continued to
be led by the Covid Steering Group, which met weekly until
May 2022 with the aim of managing the crisis as effectively
as possible, with the health and safety of employees being
paramount. The implementation of Covid-related processes
and procedures continued in accordance with the
government’s guidance as a minimum, with regular
communication to employees. A Mental Health Hub was
available on the intranet and various other mental health
activities took place to continue to help support employees
through the crisis. Guidance and support was also provided by
the corporate charity chosen by employees, Mental Health UK.
The Company has a Speaking Up Policy in place, which
complies with the 2018 UK Corporate Governance Code,
together with associated procedures, including employee
awareness and training, to ensure that employees are
encouraged to raise any matters of concern in a timely manner.
The Speaking Up Policy is communicated to all employees
through a variety of channels. A designated email address is
available to employees to enable them to raise any matters of
concern. A communications campaign continued during the
year to help raise employee awareness of the Speaking Up
Policy and to encourage employees to come forward if they
want to raise any matters of concern.
The Board assesses the effectiveness of engagement with
employees through a number of metrics, including the results
of the “Your Voice Matters” employee engagement survey,
turnover and absenteeism data, exit interview data and
employee ‘speaking up’ data.
During the year the Board received feedback from the workforce engagement director
and from employees through the “Your Voice Matters” employee engagement survey
regarding hybrid working arrangements for office workers and noted employees’
desire for flexible working arrangements, and were supportive of the key decision
to implement and maintain a structured return to work programme following the
relaxation of Covid-related restrictions.
In response to employee concerns and feedback on the negative impact of the cost
of living crisis on their health and wellbeing, and in light of the challenging external
economic environment, the Board made the key decisions to support a one-off cost of
living payment to all Group employees with a basic salary below a certain level in August
2022 and a further lump sum payment to all employees except the most senior level
of management in January 2023. These payments were well received by employees.
Employee focus groups were held during the year with a cross-section of employees to
seek their feedback on refreshing Barr Soft Drinks’ purpose, to ensure it is fit for purpose
in the context of a changing workforce.
During the year, an employee consultation process in relation to the proposed closure
of the Barr Direct England Depot at Newcastle concluded; employees’ feedback from
this consultation process directly influenced the Board’s discussions and decision to
close the site from the end of April 2022.
During the year, the Board reviewed and approved the Company’s Workforce
Engagement Terms of Reference.
During the year, the Board reviewed employee ‘speaking up’ data and reviewed and
approved the Company’s Speaking Up Policy and associated procedures.
The Board held two sessions on people and succession planning during the year.
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Corporate Governance Report continued
Key Stakeholder Form of Engagement How This Stakeholder Group Influenced Board/Committee Discussions and Decisions
Government
We engage with governments and political bodies in an open
and constructive manner on issues which affect our business,
both directly and through relevant trade associations such as
the British Soft Drinks Association (“BSDA”).
During the year much of our government engagement
continued to be related to the introduction of a DRS in Scotland
and has been carried out in conjunction with the BSDA and
Circularity Scotland Limited. We have taken steps to
communicate our position on key implementation matters to
ensure our views were understood and where possible taken
into account in decision-making.
Updates on engagement with UK and devolved governments and political bodies were
provided to the Board by the Chief Executive throughout the year and influenced its
discussions. This engagement also shaped internal activity in relation to these areas
during the year.
Our insights and understanding from engagement with UK and devolved governments
and political bodies during the year informed the Board’s discussions and decisions
regarding the annual budgeting and long-term strategic planning processes for the
Group.
Reviews of the regulatory framework under which the Group operates are presented
to the Board on a regular basis and inform the Board’s discussions and decisions
regarding capital expenditure and areas of business development.
The Board discussed and supported our internal project planning for the introduction
of a DRS in Scotland and progress against our net-zero plans – this work was informed
by our engagement with the Scottish government during the year.
Corporate culture and reputation
The Board and the Executive Committee have a critical
role in creating and embedding the right corporate
culture for the business. The Board aims to maintain
the Company’s reputation for the highest standards
of business conduct and to create a culture that is
responsible, diverse and inclusive. The Company’s
workforce is critical to its future success. The
Company’s focus on employee engagement will
continue in order to create a culture that enables and
supports a highly motivated and diverse workforce,
to ensure that its workforce do the right thing for its
stakeholders and deliver long-term sustainable success
for the business. During the early part of the year
activities continued in response to the ongoing
Covid-19 pandemic to ensure that this culture was
maintained, as described in the table above.
The Board regularly assesses and monitors the
Company’s culture and, where appropriate, seeks
assurance from management that it has taken
corrective action to ensure that policy, practices and
behaviour throughout the business are aligned with the
Company’s purpose, values and strategy. The Board
achieves this primarily through reviewing feedback from
employees from the annual employee engagement
survey “Your Voice Matters”, and ensuring that
appropriate actions are taken to address the findings
thereof. The results of the employee engagement
survey undertaken during the year showed a high
employee response rate and overall employee
engagement score. The Board were supportive of the
local action planning activities which would take place
in response to the results of the survey. The Board also
receives regular updates on workforce engagement
from the Board’s designated non-executive director
which helps it to assess and monitor the Company’s
culture. The Board regularly reviews certain health and
safety KPIs, including the number of lost time accidents
during the year and performance against the Group’s
lost time accident incident rate target. During the year,
the Board reviewed the overall health and safety
performance of the Group, including the results from
the latest Keil Centre health and safety culture maturity
assessments, which showed improvements in the
health and safety culture across Supply Chain
compared to three years ago; the Board were
supportive of the local action planning activities which
would take place in response to the results of the
survey. The Board also noted the positive results from
an internal health and safety culture survey completed
by the Commercial and Central functions during the
year. The Board regularly reviews employee turnover
and absence data, and were supportive of an action
plan presented in August to engage employees and
reduce turnover. The Board also assesses and monitors
the Company’s culture through its annual review of
the Group’s Speaking Up policy, procedures and any
concerns raised; during the year the Board were
satisfied that the procedures in place were working
effectively and reapproved the Company’s Speaking Up
policy. Further information on the Company’s culture
and workforce engagement is included in the table
above and in the Directors’ Report on pages 122 to 127
and in the Strategic Report on pages 1 to 69.
Community and environment
Information regarding the impact of the Company’s
operations on the community and the environment is
included in the Responsibility Report on pages 30 to 55.
Acting fairly as between members of the Company
The Board recognises its legal and regulatory duties to
act fairly as between members of the Company and
has put appropriate structures and processes in place to
ensure it complies with all relevant legal requirements,
for example in relation to the disclosure of inside
information to shareholders.
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Strategic Report Corporate Governance Accounts
Conflicts of interest
The Articles of Association allow the Board to authorise
potential conflicts of interest that may arise from time
to time, subject to certain conditions. The Company
has established appropriate conflicts authorisation
procedures, whereby actual or potential conflicts are
regularly reviewed and authorisations sought as
appropriate. During the year, no such conflicts arose
and no such authorisations were sought.
Professional advice
All directors have access to the advice of the Company
Secretary, who is responsible for advising the Board on
all governance matters. The non-executive directors
have access to senior management of the business.
Induction, training and development
On appointment to the Board, directors are provided
with a full, formal and tailored programme of induction,
to familiarise them with the Group’s businesses, the
risks and strategic challenges the Group faces, and
the economic, competitive, legal and regulatory
environment in which the Group operates. The
induction includes, amongst other activities, meetings
with Board members, the Company Secretary, senior
management and other employees, site visits, market
visits and the provision of information relating to the
Group, including briefings on key business activities.
The Company Secretary provides information to new
directors regarding Board policies and procedures,
and corporate governance matters. A programme of
strategic and other reviews, together with the other
training provided during the year, ensures that directors
continually update their skills, their knowledge and
familiarity with the Group’s businesses, and their
awareness of sector, risk, regulatory, legal, financial and
other developments to enable them to fulfil effectively
their role on the Board and committees of the Board.
Board performance evaluation
Every year the performance and effectiveness of the
Board, its committees and individual directors is
evaluated. In line with the Code, this year the evaluation
was externally facilitated, having last been externally
facilitated during the year to January 2020. During the
year Clare Chalmers Limited (“Clare Chalmers”)
conducted a formal, externally facilitated review of the
effectiveness of the Board and its principal committees.
Clare Chalmers is an independent adviser with no other
connection to the Company or any of the individual
directors. The evaluation was conducted by the
completion of detailed and comprehensive written
survey questionnaires by all Board members and the
Company Secretary. The questionnaires were agreed
with the Company Secretary and the Chair of the
Board. The Board questionnaire covered such themes
as strategy, leadership and accountability, Board
composition, diversity, culture and risk management,
and how effectively Board members work together to
achieve objectives, with similar coverage for each of
the committees. Clare Chalmers provided a full, written
report based on the responses to the survey, which
they discussed with the Chair. The full report was
shared with and discussed by the Board and each of the
committees. Overall, the review found that the Board
and its committees were functioning in an effective
manner and performing satisfactorily, with no major
issues identified. Actions will be taken to address certain
areas arising from the evaluation, including an
increased focus on purpose and how it cascades down
into strategy, values and culture, an increased focus on
the Board’s risk appetite, dedication of more time to
succession planning for executive directors and senior
management, increasing the non-executive directors’
contact with the business and certain improvements to
the Board papers.
The non-executive directors, led by the senior
independent director, carried out a performance
evaluation of the Chair without the Chair present, taking
into account the views of the executive directors. It was
concluded that M. Allen’s performance continues to be
strong and that he demonstrates effective leadership.
The Chair is pleased to confirm that, following
performance evaluation of the directors, all of the
directors’ performances continue to be effective and all
of the directors continue to demonstrate commitment
to the role of director, including commitment of time
for Board meetings and committee meetings and any
other relevant duties.
Meetings and attendance
Board meetings are scheduled to be held seven times
each year. Between these meetings, as required,
additional Board meetings (and/or Board committee
meetings) may be held to progress the Company’s
business. A part of each Board meeting is dedicated
to the discussion of specific strategy matters.
In advance of all Board meetings the directors are
supplied with detailed and comprehensive papers
covering the Group’s operating functions. Members of
the management team attend and make presentations
as appropriate at meetings of the Board. The Company
Secretary is responsible to the Board for the timeliness
and quality of information provided to it. The Chair
holds meetings with the non-executive directors during
the year without the executive directors being present.
The attendance of directors at scheduled Board and
committee meetings in the year to 29 January 2023
is set out below. During the year, the Board also
convened two additional Board meetings in relation to
various matters, including certain contract approvals
and a potential acquisition. All of the directors who
could have attended those Board meetings did so, with
the exception of S.V. Barratt who was unavailable for
one of those meetings.
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responsible for overseeing the Company’s equity
investments in Elegantly Spirited Limited and MOMA
Foods Limited and any other future similar equity
investments in investee companies. M. Allen, R.A. White
and S. Lorimer attended the two meetings of the Equity
Investment Committee held during the year in relation
to equity investments in Boost Drinks Holdings Limited
and MOMA Foods Limited.
Nomination Committee
The Nomination Committee comprises M. Allen, W.R.G.
Barr, S.V. Barratt, D.J. Ritchie and N.B.E. Wharton. The
Nomination Committee is chaired by M. Allen. The
Nomination Committee leads the process for making
appointments to the Board and ensures that there is a
formal, rigorous and transparent procedure for the
appointment of new directors to the Board. The remit
of the Nomination Committee also includes reviewing
the composition of the Board through a full evaluation
of the skills, knowledge and experience of directors and
ensuring plans are in place for orderly succession for
appointments to the Board. When identifying potential
new directors for appointment to the Board, the
Nomination Committee retains the services of an
external search consultant. The Nomination Committee
makes recommendations to the Board on its membership
and the membership of its principal committees.
The Nomination Committee is required, in accordance
with its terms of reference, to meet at least once per
year. The Nomination Committee met three times
during the year and, amongst other matters, considered
the structure, size and composition of the Board and its
committees, cognisant of the need to ensure that they
have the right combination of skills, experience and
knowledge, and bearing in mind the length of service
of the Board as a whole and the need to regularly
refresh its membership. The Nomination Committee
considered a corporate succession plan for the Board
and senior management, based on merit and objective
criteria and cognisant of the need to build a diverse
and inclusive culture. The Nomination Committee
also approved the Board’s current mechanism for
workforce engagement and recommended the
workforce engagement terms of reference to the
Board for approval.
Corporate Governance Report continued
Board
Maximum 9
Audit and Risk
Committee
Maximum 4
Remuneration
Committee
Maximum 4
Nomination
Committee
Maximum 3
ESG
Committee
Maximum 2
Executive
R.A. White* 9 – 4 3 2
S. Lorimer** 9 4 – – –
J.D. Kemp 9 – – – –
Non-executive
J.R. Nicolson*** 1 – – – –
M. Allen**** 9 1 1 3 –
W.R.G. Barr 9 – – 3 –
S.V. Barratt 8 4 4 3 2
Z.L. Howorth
†
9 1 4 1 2
D.J. Ritchie 9 4 4 3 –
N.B.E. Wharton 9 4 – 3 –
*
R.A. White attended Board committee meetings during the year by invitation.
**
S. Lorimer attended Audit and Risk Committee meetings during the year by invitation.
***
J.R. Nicolson resigned from the Board on 31 March 2022 and could have attended a maximum of one Board meeting.
****
M. Allen resigned from the Audit and Risk Committee on 31 March 2022 following his appointment as Chair of the Board and could have
attended a maximum of one Audit and Risk Committee meeting. M Allen attended a Remuneration Committee meeting during the year
by invitation.
†
Z.L. Howorth attended Audit and Risk Committee and Nomination Committee meetings during the year by invitation.
Committees of the Board
The terms of reference of the principal committees of
the Board – Audit and Risk, Remuneration, Nomination
and ESG – have been approved by the Board and are
available on the Company’s website, www.agbarr.co.uk.
Those terms of reference have been reviewed in the
current year and are reviewed at least annually. The
work carried out by the Nomination Committee in
discharging its responsibilities is summarised below.
The work carried out by the Audit and Risk Committee
is described within the Audit and Risk Committee’s
Report on pages 85 to 88. The work carried out by
the Remuneration Committee is described within the
Directors’ Remuneration Report on pages 104 to 105.
The work carried out by the ESG Committee is
described within the Responsibility Report on page 45.
The Board has a Market Disclosure Committee which
comprises S.V. Barratt, R.A. White, S. Lorimer and the
Company Secretary. The Market Disclosure Committee
meets only when required and is responsible for
overseeing the disclosure of information by the
Company to meet its obligations under the Market
Abuse Regulation and the Financial Conduct Authority’s
Listing Rules and Disclosure Guidance and
Transparency Rules. S.V. Barratt, R.A. White and S.
Lorimer attended the one meeting of the Market
Disclosure Committee held during the year.
The Board also has an Equity Investment Committee
which comprises M. Allen, R.A. White, S. Lorimer
and the Company Secretary. The Equity Investment
Committee meets only when required and is
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Strategic Report Corporate Governance Accounts
The Board believes that building a diverse and inclusive
culture is integral to the success of the Company.
Diversity includes aspects such as diversity of skills,
perspectives, industry experience, educational and
professional background, gender, ethnicity and age.
The Company’s Board and Executive Committee
Diversity Policy (“Diversity Policy”) provides that these
aspects will be considered in determining the optimum
composition of the Board and Executive Committee,
with the aim of achieving an appropriate balance. All
appointments to the Board and Executive Committee
are made on merit, against objective criteria, and with
due regard for the benefits of diversity and inclusion.
The Company remains committed to the principle of
diversity and aims to achieve at least 40% female
representation on the Board and Executive Committee
and at least one director from an ethnic minority
background on the Board. The Nomination Committee
is responsible for overseeing the implementation of the
Diversity Policy. The Nomination Committee reviews
the Diversity Policy at least annually to ensure its
effectiveness, with any amendments recommended
to the Board for approval. Prior to the resignation of
J.R. Nicolson as a non-executive director on 31 March
2022, 20% of the Board were female. Following the
resignation of J.R. Nicolson, 22% of the Board were
female. As at the date of this report, 33% of the
Executive Committee are female and 44% of the
Executive Committee’s direct reports are female.
The disclosure relating to gender diversity within
the Company is included in the Strategic Report
on page 37.
Treasury and Commodity Committee
The Treasury and Commodity Committee consists
of R.A. White, S. Lorimer and senior members of
the finance, legal and procurement departments.
The Treasury and Commodity Committee’s terms
of reference are reviewed and approved annually
by the Audit and Risk Committee. The Treasury
and Commodity Committee reviews purchase
requirements in foreign currencies and implements
strategies, including the use of foreign exchange
hedges, in order to reduce the risk of foreign exchange
exposure and provide certainty over the value of
non-domestic purchases in the short to medium term.
The Treasury and Commodity Committee’s remit
includes the ability to utilise certain financial
instruments in order to hedge the Group’s exposure to
interest rate fluctuations. The Treasury and Commodity
Committee also monitors the Group’s short and
medium term funding requirements, provides oversight
of hedge accounting and adherence to hedge
accounting standards, monitors the ongoing
requirements of the Company’s various employee
share schemes, monitors cash flow and any capital
restructure programmes, oversees the Group’s dividend
policy and proposals for the payment of dividends
and annually reviews the Company’s Statement of
Delegated Authorities.
Internal control
The Board has overall responsibility for the Group’s
internal control systems and annually reviews their
effectiveness, including a review of financial,
operational, compliance and risk management
controls. The implementation and maintenance of
the risk management and internal control systems are
the responsibility of the executive directors and other
senior management. The systems are designed to
manage rather than eliminate the risk of failure to
achieve business objectives and to provide reasonable,
but not absolute, assurance against material
misstatement or loss.
The Board has reviewed the effectiveness of the
Group’s risk management and internal control systems,
including financial, operational and compliance
controls, in accordance with the Code for the period
from 31 January 2022 to the date of approval of this
annual report. No significant failings or weaknesses
were identified from this review during the year.
Had any failings or weaknesses been identified then
the Board would have taken the action required to
remedy them.
The Board confirms that there is an ongoing process,
embedded in the Group’s integrated internal control
systems, allowing for the identification, evaluation
and management of significant risks, as well as a
reporting process to the Board. This risk management
process has been in place throughout the year ended
29 January 2023 and up to the date of the approval of
this annual report. The Board has carried out a robust,
systematic assessment of the principal and emerging
risks facing the Group during the period, including
those which would threaten its business model, future
performance, solvency or liquidity. Information on the
Group’s risk management framework, including the
operation of the Group’s Risk Committee, is set out in
the Strategic Report on pages 62 to 69.
The three main elements of the Group’s internal control
system are as follows:
The Board
The Board has overall responsibility for the Group’s
internal control systems and exercises this through an
organisational structure with clearly defined levels of
responsibility and authority as well as appropriate
reporting procedures.
The Board has a schedule of matters that are brought
to it, or its duly authorised committees, for decision,
aimed at maintaining effective control over strategic,
financial, operational and compliance issues.
This structure includes the Audit and Risk Committee
which, with the Finance Director, reviews the
effectiveness of the internal financial and operating
control environment.
Financial reporting
There is a comprehensive strategic planning, budgeting
and forecasting system with an annual operating plan
approved by the Board. Monthly financial information,
including trading results, cash flow statement,
statement of financial position and indebtedness,
is reported.
The Board and the Executive Committee review the
business and financial performance against the prior
year and against annual plans approved by the Board.
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Corporate Governance Report continued
Audits and reviews
The key internal risks identified in the Group are subject
to regular audits or reviews by the internal auditors. This
role is fulfilled by an external professional services firm
which is independent from the Board and the Group.
The review of the internal auditor’s work by the Audit
and Risk Committee and monitoring procedures in
place ensure that the findings of the audits are acted
upon and subsequent reviews confirm compliance with
any agreed action plans.
The Board confirms that there has been an independent
internal audit function in place for the year.
Share capital structure
The share capital structure of the Company is set out in
the Directors’ Report.
UK Corporate Governance Code compliance
The Company is committed to the principles of
corporate governance contained in the Code. A copy
of the Code is available on the Financial Reporting
Council’s website, www.frc.org.uk.
Each of the provisions of the Code has been reviewed
and, where necessary, steps have been taken to ensure
that the Company is in compliance with all of those
provisions as at the date of this report. The directors
consider that the Company has complied throughout
the year ended 29 January 2023 with the provisions of
the Code, except as set out below.
Provision 19 of the Code states that the Chair should
not remain in post beyond nine years from the date of
their first appointment to the Board. J.R. Nicolson was
appointed as a non-executive director to the Board on
1 January 2013 and was appointed as Chair of the
Board on 1 January 2015. J.R. Nicolson resigned from
the Board on 31 March 2022. J.R. Nicolson therefore
remained as Chair of the Board for a period of three
months following the expiry of the nine year period
from the date of his first appointment to the Board.
J.R. Nicolson remained in post for this brief three
month period to complete the financial cycle for the
year to 30 January 2022 and to ensure an orderly
handover to his successor as Chair, M. Allen.
Provision 38 of the Code states that pension
contribution rates for executive directors, or payments
in lieu, should be aligned to those available to the
workforce. As disclosed in the Directors’ Remuneration
Report, R.A. White, S. Lorimer and J.D. Kemp receive
a cash allowance equal to their contractual pension
provision of 24% of salary. These provisions will
continue to be honoured as contractual commitments
made to these incumbent executive directors. As
disclosed in the Directors’ Remuneration Policy, the
maximum company pension contribution for any new
executive director appointments will be aligned to that
available to the wider workforce, which is currently
8% of salary.
Provision 39 of the Code states that executive directors’
contracts should contain a maximum notice period of
one year. As disclosed in the Directors’ Remuneration
Report, the service contracts with R.A. White and J.D.
Kemp provide for a notice period of 12 months except
during the six months following either a takeover of or
by the Company or a Company reconstruction. Under
these conditions and certain circumstances the
directors are entitled to a liquidated damages payment
equal to the director’s basic salary at termination plus
the value of all contractual benefits for a two year
period. Given the size of the Company and the sector
dynamics at the time these directors were recruited,
the Remuneration Committee considered this provision
appropriate in order to attract and retain high calibre
executive directors. As disclosed in the Directors’
Remuneration Report, this provision will continue to be
honoured as a contractual commitment made to these
directors; however this provision was not included in
S. Lorimer’s service contract and will not be included
in service contracts with other new executive directors
appointed in future, to ensure that future executive
directors’ service contracts comply with provision 39
of the Code.
A copy of the financial statements has been placed
on the Company’s website, www.agbarr.co.uk.
The maintenance and integrity of this website is the
responsibility of the directors. Legislation in the UK
governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
By order of the Board
J.A. Barr
Company Secretary
28 March 2023
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Strategic Report Corporate Governance Accounts
• Financial reporting:
- monitoring the integrity of the annual and interim
financial statements and formal announcements
relating to the Group’s financial performance and
reviewing any significant financial reporting
judgements and disclosures which they contain;
- if requested by the Board, providing advice on
whether the Annual Report and Accounts are fair,
balanced and understandable; and
- reporting to the Board on the appropriateness of
the Group’s accounting policies and practices.
• Internal control and risk management:
- reviewing and monitoring the effectiveness of
the Group’s internal control and risk management
systems;
- reviewing and monitoring the effectiveness of
the internal audit function, which is resourced
externally, and management’s responsiveness
to any findings and recommendations; and
- reviewing the identification and mitigation
of the Group’s existing corporate risks and
emerging risks.
• Policies and procedures:
- reviewing and approving the terms of reference
for the Company’s Treasury and Commodity
Committee;
- reviewing the Group’s delegated authority limits;
- reviewing and monitoring the Group’s Tax risk
management policy;
- reviewing and monitoring the Group’s Anti-
facilitation of tax evasion policy;
- reviewing and monitoring the appropriateness of
the Group’s Anti-bribery policy and procedures;
- approving the appointment and removal of the
internal auditor;
- making recommendations to the Board in relation
to the appointment and removal of the external
auditor and approving its remuneration and terms
of engagement;
- reviewing and monitoring the external auditor’s
independence and objectivity and the
effectiveness of the audit process;
- reviewing the policy on the engagement of the
external auditor to supply non-audit services; and
- reporting to the Board on how it has discharged
its responsibilities.
Activities of the Audit and Risk Committee
In respect of the year to 29 January 2023 (‘period under
review’), the ARC has:
• Financial reporting:
- reviewed and discussed with the external auditor
the key accounting considerations and
judgements reflected in the Group’s unaudited
results for the six month period ended 31 July 2022;
- reviewed and agreed the external auditor’s audit
strategy memorandum in advance of its audit for
the year ended 29 January 2023;
- discussed and agreed the nature and scope of the
work to be performed by the external auditors;
- received and reviewed reports from management
regarding their approach to key accounting
considerations and judgements in the half year
and full year financial statements;
- reviewed the half year and full year financial
statements;
- discussed the report received from the external
auditor regarding its audit in respect of the
year ended 29 January 2023, which included
comments on its findings on internal control
and key audit risks and a statement on its
independence and objectivity; and
- reviewed the results of this audit work and the
response of management to matters raised.
• Internal control and risk management:
- received reports from internal audit covering
various aspects of the Group’s operations,
controls and processes;
- received reports on the operation of the Group’s
Risk Committee;
- reviewed the Group’s risk register and the Group’s
principal risks in light of the Board’s risk appetite
for key risk areas, together with the systems and
processes for mitigating those risks;
- received reports from management on the
actions taken by the business to mitigate cyber
risks, including the risk of a ransomware attack;
- received reports from management regarding the
operation of the new structure and processes in
relation to the identification and management
of emerging risks for the Group and reviewed the
Group’s emerging risks related to technology;
Audit and Risk Committee Report
On behalf of the Audit and Risk Committee,
I am pleased to present its report for the
year ended 29 January 2023. The report
describes the key activities undertaken by
the Committee during the year and how it
has discharged its role and responsibilities.
Nick Wharton
Chair of the Audit and Risk Committee
Composition
During the year the Audit and Risk Committee (the
“ARC”) comprised four non-executive directors: N.B.E.
Wharton, M. Allen OBE, S.V. Barratt and D.J. Ritchie.
M. Allen resigned from the ARC upon being appointed
Chair of the Board on 31 March 2022. Following
M. Allen’s resignation, the ARC comprised three
non-executive directors. The ARC is chaired by N.B.E.
Wharton. The Board is satisfied that N.B.E. Wharton has
recent and relevant financial experience as required by
provision 24 of the 2018 UK Corporate Governance
Code. Biographical details of the Chair and other
members of the ARC are shown on pages 70 and 71.
The Board has determined that the current composition
of the ARC as a whole has competence relevant to the
sector in which the Company operates, to enable it to
deal effectively with the matters it is required to address
and to challenge management when necessary.
Meetings
The ARC met four times during the year. The meetings
are attended by the ARC members and, by invitation,
the Finance Director, the Group Financial Controller,
the Company Secretary and representatives from the
external and internal auditors. The ARC meets regularly
with executive directors and management, as well as
privately with the external and internal auditors.
Role and responsibilities
The primary role of the ARC is to assist the Board in
fulfilling its oversight responsibilities. This includes:
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A.G. BARR p.l.c. Annual Report and Accounts 2023
- reviewed and recommended the Group’s
enterprise risk management framework, including
the Group’s risk appetite statement, to the Board;
- discussed and agreed the nature and scope of the
work to be performed by the internal auditor;
- reviewed the results of this audit work and the
response of management to matters raised;
- reviewed the effectiveness of the Group’s risk
management and internal control systems
(including financial, operational, compliance
and risk management controls); and
- reviewed and approved the Company’s viability
and going concern statements.
Consideration of the effectiveness of the Group’s risk
management and internal control systems is set out in
the Corporate Governance Report on pages 83 and 84.
• Policies and procedures:
- reviewed and approved the Treasury policy,
Commodities management policy and the terms
of reference for the Group’s Treasury and
Commodity Committee;
- reviewed and recommended the Group’s Tax risk
management policy to the Board;
- reviewed and approved the Group’s Anti-
facilitation of tax evasion policy;
- reviewed the effectiveness of the Group’s
Anti-bribery systems and controls and reviewed
and approved the Group’s Anti-bribery and
Corruption policy;
- reviewed the Group’s delegated authority limits;
- approved the reappointment of the internal auditor;
- made recommendations to the Board on the
appointment and remuneration of the external
auditor and monitored the performance of
the auditor;
- monitored and reviewed the performance of the
incumbent internal auditor and the effectiveness
of the Group’s internal audit activities;
- reviewed its policies on the supply of non-audit
services by the external auditor and on the
employment of former employees of the Group’s
external auditor;
- reviewed the non-audit services provided to the
Group by the external auditor and monitored and
assessed the independence of both the external
and internal auditors; and
- reviewed the performance of the ARC and its
terms of reference.
At the request of the Board, the ARC also considered
whether the Annual Report and Accounts for the year
ended 29 January 2023, taken as a whole, are fair,
balanced and understandable and provide the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy. Following review of management’s
processes in this regard and consideration of the draft
Annual Report and Accounts, the ARC recommended
to the Board that it could make the required disclosure
as set out in the Directors’ Responsibilities Statement on
page 128.
Significant areas
The significant matters and key accounting judgements
independently assessed and considered by the ARC
in respect of the period under review were:
• Revenue recognition – brand support accruals:
judgement is required by management when
determining the level of brand support accruals at
the year end. During the year, the ARC received and
considered reports from management on the
improvements made to the internal processes and
controls in place with regard to brand support
accruals, and the level of accruals at the half year
and at the year end. It also received and considered
reports from the external auditor following their
review of net revenue and brand support accruals
during the period. The ARC considered these
reports and was satisfied that the estimates and
judgements made by management are appropriate.
• Management override of controls: there is a risk of
fraud associated with the potential override of
internal controls by management. During the year,
the ARC assessed this risk, and received and
considered a report from the external auditor which
stated that its procedures, which included the use of
data analytics, did not identify any errors or
significant deficiencies in internal controls. The ARC
was content that there were no issues arising.
Other areas
Other matters independently assessed and considered
by the ARC in respect of the period under review were:
• Impairment of intangible assets: the ARC considered
a report from management in relation to their
impairment reviews of the intangible asset base and
was satisfied with management’s conclusion that,
following impairment assessments carried out as
part of the interim and full year reporting processes,
which concluded that the carrying values of
intangible assets on the balance sheet remained
supportable, no impairment was required. The
external auditor concurred with management’s
assessment.
• Assumptions used in the Company’s defined
benefit pension scheme: the Company operates the
A.G. BARR p.l.c. (2008) Pension and Life Assurance
Scheme, which includes a defined benefit section.
The Company engages a third party, Hymans
Robertson, to assist in the valuation of the defined
benefit pension scheme liability. There is a risk
related to judgements made by management in
valuing the defined benefit pension scheme liability,
including the appropriateness of the discount rate
and inflation rate assumptions. These variables can
have a material impact in calculating the quantum of
the defined benefit liability. During the year the ARC
were satisfied that management had considered and
were comfortable with the assumptions used by
Hymans Robertson (the “Assumptions”), and
received and considered a report from the external
auditor which stated that it had carried out a review
and benchmarking exercise of the Assumptions
and concluded that they were within an acceptable
range. After discussion and challenge the ARC
was satisfied that the Assumptions proposed
were reasonable and these were approved.
• Going concern: the ARC considered and challenged
reports from management regarding the going
concern assumption and the key environmental and
trading sensitivities applied, and was satisfied that
this assumption was appropriate.
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• Viability: the ARC considered and challenged reports
from management regarding the viability statement,
including information on the Group’s financing
facilities, and approved the viability statement.
• The Company’s investment in Boost Drinks Holdings
Limited (“Boost”): the Company acquired a 100%
equity stake in Boost in December 2022.
Management concluded that the Company
obtained control over Boost and has therefore
consolidated Boost as a fully owned subsidiary in the
Company’s accounts for the year ended 29 January
2023. The identification and valuation of intangibles
as well as the valuation of other assets acquired
and related assumptions, including any impairment
considerations, were a key area of focus. The ARC
received and considered reports from management
and the external auditor on these matters. The ARC
was satisfied with these reports and with the
accounting for the investment in Boost.
• The Company’s acquisition of the remaining 38.2%
equity stake in MOMA Foods Limited (“MOMA”):
the Company obtained control of MOMA in the
prior year following its acquisition of an initial c.62%
equity stake in MOMA in December 2021. MOMA
was consolidated as a fully owned subsidiary in
the Company’s prior year accounts and a non-
controlling interest was recognised. Following the
Company’s acquisition of the remaining 38.2%
equity stake in MOMA in December 2022, the
Company holds a 100% equity stake in MOMA.
Management concluded that the non-controlling
interest should be derecognised as a result of this
transaction, with the difference between the put
option liability and the consideration paid released
to the income statement for the year under review.
The external auditor reviewed management’s
treatment of this transaction, including the
recalculation of the amounts released. The ARC
received and considered reports from management
and the external auditor on these matters. The
ARC was satisfied with these reports and with the
accounting for the investment in MOMA.
• The presentation and explanation of the use of
alternative performance measures (“APMs”): the ARC
considered a report from management regarding
the move from reporting exceptional items in the
financial statements to a singular tabular reporting
structure for the income statement and the use of
adjusting items as APMs for the year ended
29 January 2023; this move was made in line with
market and best practice. The ARC also considered
a report from the external auditor on management’s
presentation of APMs in the Annual Report and
Accounts for the year ended 29 January 2023,
including a report on whether the use of APMs and
statutory figures was generally well balanced and
APMs were appropriately labelled and defined, and
was satisfied that APMs were appropriately presented.
• Adjusting items: the ARC considered and challenged
a report from management in relation to the
classification and presentation of certain items as
adjusting items, and was satisfied with the treatment
and presentation of these items which arose during
the period under review as adjusting. Please see
above regarding the change from reporting
exceptional items to reporting adjusting items for
the year ended 29 January 2023.
• Valuation of inventory: inventory was an area of
focus due to the price volatility related to raw
materials. The ARC received a report from
management confirming that the annual average
actual cost per case would be used as the method
of calculation for the purposes of valuing inventory
at the year end; this was supported by the external
auditor and the ARC. The ARC also received and
considered a report from the external auditor
following their review of management’s controls
and processes in relation to the valuation of inventory,
and their assessment of the risk identified. The ARC
was satisfied that the estimates and judgements
made by management were appropriate.
The ARC receives regular presentations from members
of the senior management team. During the year, the
ARC considered presentations from representatives of
the management team on treasury and commodities
management, intellectual property risk, emerging
risks related to technology, brand support accruals,
procedures to prevent bribery and corruption, tax
strategy and the project to transition the Company’s
defined contribution pension schemes to an
outsourced master trust arrangement.
External audit
The Group’s external auditor is Deloitte LLP (“Deloitte”).
The current audit partner is David Mitchell, who
replaced David Sweeney with effect from July 2022
following David Sweeney’s completion of five years as
the Group’s audit partner. The ARC reviews the external
auditor’s performance, independence and objectivity
annually. The ARC ensures that procedures are in place
to safeguard the external auditor’s independence and
objectivity. The external auditor reports regularly to the
ARC on the actions that it has taken to comply with
professional and regulatory requirements and current
best practice in order to maintain its independence
and objectivity.
The Group has a policy in place which ensures that the
provision of non-audit services by the external auditor
does not impair the auditor’s independence or objectivity.
This policy reflects the Financial Reporting Council’s
Ethical Standard 2019, such that the external auditor may
only provide non-audit services which are closely linked
to the audit itself or are required by law or regulation.
The policy was complied with during the year.
Details of the amounts paid to the external auditor
during the year for audit and non-audit services are set
out in Note 3 to the financial statements. The ratio of
fees for non-audit services to those for audit services
for the year was 18%, within the 70% cap in the Financial
Reporting Council’s guidance. The ARC considered the
nature and level of non-audit services provided and was
satisfied that the objectivity and independence of the
external auditor were not affected by the non-audit
work undertaken. The non-audit fees during the year
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A.G. BARR p.l.c. Annual Report and Accounts 2023
related to the performance of the half year review and
work regarding the verification of German sales volumes
to the German packaging authority for the purposes of
the ‘Green Dot’ packaging scheme. The nature of and
level of fees for the non-audit services provided were
considered by Deloitte who concluded that they did not
present a threat to Deloitte’s independence.
Deloitte was appointed as the Group’s external auditor
in May 2017 following a competitive tender process.
There are no contractual obligations which restrict the
ARC’s choice of external auditor. The senior statutory
auditor rotates every five years to ensure independence.
David Mitchell therefore replaced David Sweeney during
the 2022/23 financial year, as noted above. The ARC
acknowledges the requirement to tender the external
audit contract at least every ten years. The Company
confirms that it has complied with the provisions of the
Competition and Markets Authority’s Statutory Audit
Services Order in respect of the financial year.
During the year, the ARC reviewed and monitored the
external auditor’s independence and objectivity and the
effectiveness of the external audit process. The ARC
reviewed and approved the external auditor’s plan for
undertaking the half year review and the year end audit,
including the scope of their work and their proposed
approach to the key risk areas identified. After
discussion and challenge the ARC approved this plan.
The ARC reviewed the detailed reports prepared by the
external auditor setting out their findings from the half
year review and the year end audit, with a particular
focus on the areas of audit risk identified. The ARC also
received comprehensive papers from management in
relation to the half year review and the year end audit.
The ARC held meetings with the external auditor in the
absence of management to discuss the interim review
and the year end audit findings and processes. The
ARC was satisfied with the internal processes run by
management and their response to challenge by the
external auditor.
The ARC carried out a review of the effectiveness
of the external auditor and the external audit process
during the year, led by the Chair of the ARC. This
review included an internally facilitated detailed and
comprehensive evaluation of the Group’s external
auditor and the external audit process using written
survey questionnaires, which were completed by the
executive directors and relevant members of senior
management. Members of the ARC carried out an
externally facilitated review of the Group’s external
auditor and the external audit process during the year
using written survey questionnaires. The results of the
evaluation were shared with the ARC and the external
auditor. A small number of improvement opportunities
were identified and discussed with the external auditor.
Following these reviews and meetings, and after debate
and discussion, the ARC was satisfied with Deloitte’s
performance during the year, that it was objective and
independent, and that the external audit process
remains effective, with no major issues identified. The
ARC has recommended to the Board that a resolution
proposing the appointment of Deloitte be put to
shareholders at the 2023 AGM.
Internal audit
At the beginning of each year, an internal audit plan is
developed by the internal auditor following meetings
with directors and senior managers within the business
and with reference to the significant risks contained
within the Group’s risk register and identified controls.
The ARC approves the internal audit plan for the first
half of the year at the beginning of the year and the
plan for the second half of the year at the June ARC
meeting. The ARC receives updates on progress against
the plan and the recommendations arising from the
internal audits throughout the year, together with
updates on management’s progress against
outstanding actions. The ARC held meetings with the
internal auditor in the absence of management to
discuss the internal audit findings and processes.
The ARC carried out a review of the effectiveness of
the internal audit function and the Company’s risk
management and internal control systems during the
year, led by the Chair of the ARC. This review included
an internally facilitated detailed and comprehensive
evaluation of these matters using written survey
questionnaires, which were completed by the executive
directors and relevant members of senior management.
Members of the ARC carried out an externally facilitated
review of the Group’s internal audit function and the
Company’s risk management and internal control
systems during the year using written survey
questionnaires. The results of the evaluation were
shared with the ARC and the internal auditor.
Following these reviews and meetings, the ARC was
satisfied that the internal audit function was performing
in an effective manner and that the Company’s risk
management and internal control systems were
effective, with no major issues identified.
Audit and Risk Committee evaluation
The ARC carried out a review of the performance and
effectiveness of the ARC during the year, led by the
Chair of the ARC. In line with the 2018 UK Corporate
Governance Code, this year the evaluation was
externally facilitated, having last been externally
facilitated during the year to January 2020. This review
included a detailed and comprehensive evaluation of
the performance and effectiveness of the ARC using
written survey questionnaires, which were completed by
members of the ARC, the Finance Director and the
Company Secretary. The results of the evaluation were
shared with the ARC. Overall, the review found that the
ARC was functioning in an effective manner and
performing satisfactorily, with no major issues identified.
Nick Wharton
Chair of the Audit and Risk Committee
28 March 2023
Audit and Risk Committee Report continued
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Strategic Report Corporate Governance Accounts
facilitated review of its performance and effectiveness
during the year. This review employed written survey
questionnaires, which were completed by members
of the Remuneration Committee and the Company
Secretary. The results of the evaluation were shared
with the Remuneration Committee. Overall, the review
found that the Remuneration Committee was
functioning in an effective manner and performing
satisfactorily, with no major issues identified.
Proposed Remuneration Policy
As required by the 2018 UK Corporate Governance
Code, the Remuneration Committee has completed
an extensive review of the Remuneration Policy at
the third anniversary of the last shareholder approval,
having held the existing Remuneration Policy unaltered
over the last three years. In completing this, the
Remuneration Committee has reviewed the
appropriateness of the existing Remuneration Policy
based on the Company’s strategy and culture, market
conditions and corporate performance since the last
Remuneration Policy review, alongside developments
in market practice. Following this review, the
Remuneration Committee has made changes to the
Remuneration Policy to ensure that it is appropriate for
the next three years, so that it complies with the 2018
UK Corporate Governance Code and effectively
supports the delivery of the business strategy, is aligned
with its culture and values, adequately rewards strong
performance and suitably aligns reward with the
creation of shareholder value.
The details of the proposed new Remuneration
Policy are set out on pages 107 to 121. In summary,
the changes planned for the new Remuneration
Policy as compared to the existing Remuneration
Policy approved at the 2020 AGM are as follows:
Pension provision: new executive directors will
receive pension contributions at levels aligned with the
wider workforce in the Company. The Company will
continue to honour its contractual obligations to
incumbent executive directors which recognises that
there is a legacy position with base salary and pension
contributions at levels which ensure an appropriate and
balanced total level of fixed pay;
Increase in annual bonus deferral: executive
directors will be required to hold 25% of any annual
bonus earned in shares in the Company for a period of
two years, this requirement previously being 20%;
LTIP holding period: all executive directors will be
required to hold any shares vesting from LTIP awards
granted after adoption of the new Remuneration Policy
for a period of two years, previously this requirement
excluded any executive director who already held
shares with a value greater than 300% of base salary;
Increase in shareholding guidelines: all new
executive directors will be required to build and hold
a shareholding in the Company of 200% of base salary,
currently the requirement is 150% of base salary for
existing executive directors other than the Chief
Executive where the requirement is already at 200%;
Increase in post cessation shareholding period: for
new executive directors there will be a requirement to
hold their shares in the Company (up to a maximum of
the shareholding guidelines) for two years after leaving
the employment of the Company; the incumbent
executive director requirement will remain at one year
after leaving employment;
Extension of malus and clawback provisions: the
existing malus and clawback provisions are extended
to align with latest best practice and corporate
governance guidelines.
Remuneration in context
The last year has remained very challenging with the
evolution of global supply chain issues associated with
the Covid-19 pandemic transitioning to a cost of living
crisis with high levels of cost inflation. In this context,
the Remuneration Committee has considered the
experiences of key stakeholders over the year, as well
as overall Group performance, when making executive
remuneration decisions in respect of 2022/23 and the
forthcoming financial year. Below is a summary of the
key drivers of our decisions:
Directors’ Remuneration Report
Remuneration Committee – Chair’s Statement
Introduction
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for the year ended
29 January 2023, which sets out the new
Remuneration Policy intended to take effect from the
close of the 2023 AGM on pages 107 to 121, and the
Annual Report on Remuneration which provides details
of the amounts earned by the directors in respect of
the year ended 29 January 2023 and how we intend
to operate the Remuneration Policy for the year
commencing 30 January 2023 on pages 92 to 106.
The current Remuneration Policy was approved by
a binding vote at the 2020 AGM and became effective
for three years from the close of that meeting. The
proposed new Remuneration Policy will be subject to
a binding vote and the Annual Report on Remuneration
will be subject to an advisory vote at the 2023 AGM.
I am pleased to report a successful period of
consultation with shareholders on the proposed
new Remuneration Policy, which was undertaken in
December 2022 through to February 2023 prior to the
Remuneration Committee finalising the proposed new
Remuneration Policy. Shareholders representing c.70%
of the shares on the register were consulted. There was
good support for the changes being proposed to align
the new Remuneration Policy with evolving governance
guidance. There was also good support for the
confirmed position in respect to new executive director
pension provision being aligned with the wider
workforce and a recognition that it remains challenging
to alter the pre-existing legacy contractual position
of pension provision for existing executive directors.
There was consistent support for the overall levels of
remuneration, recognising the relatively modest levels
of total pay, compared to companies of comparable
size and complexity, combined with the challenging
performance targets set by the Remuneration
Committee each year. Whilst individual stakeholder
views did vary, we take comfort from the broad
consensus of supportive shareholder feedback received
as we finalised the proposed new Remuneration Policy.
There were no changes to the composition of the
Remuneration Committee during the year. The
Remuneration Committee carried out an externally
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Group performance
• Revenue increased by 18.2% to £317.6m.
• Adjusted profit before tax of £43.5m, an increase
of 13.3% on the prior year.
• Net cash at bank* at year end of £52.9m.
Shareholder experience
• An interim dividend of 2.5p per share paid in
October 2022 and a proposed final dividend for the
2022/23 financial year of 10.6p.
• The share price at the end of the financial year of
£5.24 was c.6% higher than at the start of the year.
Employee experience
• The Group paid bonuses for the 2021/22 financial
year to employees based on strong individual
performance.
• The Group increased salaries for the workforce in
April 2022 by an average of 3% and made specific
cost of living payments to the majority of the
workforce in August 2022 and January 2023.
• Flexible working arrangements continued in
2022/23 to support employees, with particular focus
on mental wellbeing.
Customer experience
• Strong support provided to the Group’s customers
notwithstanding the volatile market backdrop and
global supply chain issues.
Pay for performance in 2022/23
The Remuneration Committee remains committed
to a responsible approach to executive pay and
believes that variable pay should only be earned
for achievement against stretching targets.
Achievement against annual bonus targets – bonus
to be paid for strong performance
The executive directors were set a stretching target for
profit before tax (“PBT”), which accounts for 80% of
bonus opportunity for each executive director. The PBT
target range of £40m to £47m reflected the ambitions
for growth of the business set against challenging
external conditions, including the ongoing cost of living
crisis and worldwide supply chain challenges. By
meeting and overcoming these external challenges, the
executive directors delivered strong growth in revenue
and achieved adjusted PBT* of £43.5m. In assessing
bonuses to be awarded, the Remuneration Committee
decided to adjust the profit outturn in the year for
c.£1.5m of adjusting items, primarily two exceptional
and unbudgeted cost of living allowances paid to the
vast majority of employees during the year; this was
wholly consistent with how wider workforce bonuses
were assessed. The Remuneration Committee
concluded that the executive directors will receive 75%
of the PBT portion of the bonus. The executive directors
did not receive either of the cost of living payments.
Each of the executive directors was also set stretching
individual strategic objectives tailored to their role and
responsibilities, which account for 20% of bonus
opportunity for each director. The Remuneration
Committee reviewed each of the directors’ strategic
objectives in turn, to fully understand the extent to
which each strategic objective had been achieved. The
Remuneration Committee was satisfied that strong
progress had been achieved by each of the executive
directors towards their strategic objectives and agreed
to award 75% of the maximum of 20% available for this
part of the bonus to each of the directors, resulting in
total bonus of 93.75% of basic salary for each director.
Further details of bonus awards can be found on pages
94 and 95.
Achievement against LTIP targets – 2020 LTIP
awards vest at 71.1%
The 2020 LTIP used the performance metrics of
cumulative Earnings Per Share (“EPS”) and Total
Shareholder Return (“TSR”) to assess the long-term
performance of the executive directors, with 50% of the
LTIP assessed on EPS and the balancing 50% assessed
on TSR. The cumulative EPS over the three years ended
29 January 2023 was 76.4p, which compared to the
EPS target range set in November 2020 of 65.0p to
75.0p. As a result, subject to the LTIP rules the EPS
element of the LTIP will vest in full in November 2023.
In respect of TSR, the Company delivered a TSR over
the assessed period which was above the median
performance but below the upper quartile performance
of the agreed peer set of companies in the FTSE 250.
As a result, subject to the LTIP rules the TSR element of
the LTIP will vest at 42.2%. Therefore, overall 71.1% of
the LTIP award will vest on the three year anniversary of
the award in November 2023. Further details can be
found on page 96.
The Committee has reviewed the outcomes arising
from the application of the Remuneration Policy during
the year and considers these outcomes to be fair and
appropriate. In particular, the Committee considered
the impact of any windfall gains over the vesting period.
However as the grant was deferred until November
2020 by which time share prices had stabilised
following the initial volatility caused by the start of the
pandemic, the Committee determined that there is no
evidence of any significant gain to account for when
the award vests. The Committee is confident that the
Remuneration Policy has operated as intended during
the year.
Other pay decisions in respect of 2022/23
Set out below are the other decisions made during the
year in respect of remuneration.
Base salary increases – in line with wider workforce
The Remuneration Committee reviewed executive
director salaries during the year and awarded increases
of 3% in line with the increases awarded to the wider
workforce.
Bonus awards – pay out at 125% for 2021/22
The Committee confirmed in March 2022 that the
bonuses payable in respect to the 2021/22 financial
year were a full award at 125% of base salary. As a result,
bonuses totalling £1.3m were paid to the executive
directors in April 2022.
Directors’ Remuneration Report continued
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LTIP awards – awards granted using three
performance metrics of EPS, TSR and ESG
The Committee concluded that it was appropriate to
grant LTIP awards in April 2022 at a value equal to 150%
of base salary, consistent with the normal maximum
opportunity under the Remuneration Policy. These LTIP
awards will be assessed over the three year vesting
period using the performance metrics of EPS, TSR and
ESG with relative proportions of 60%, 30% and 10%.
Employee engagement
The Remuneration Committee recognises the
importance of culture and effective employee
engagement in the creation of a good workplace. The
Board’s role is to ensure that effective processes and
procedures are in place for gathering workforce views
and engaging in meaningful dialogue with employees.
The Board receives regular updates on workforce
engagement throughout the year; the topic regarding
how executive directors’ remuneration aligns with wider
Company pay policy is included as a specific discussion
item at workforce engagement sessions at least once
per annum. Further information on employee
engagement is included in the Corporate Governance
Report on pages 78 and 79.
Looking forward – implementation of
Remuneration Policy for 2023/24
Set out below are the decisions anticipated to be
made during 2023/24 in implementing the
Remuneration Policy.
Base salary – increase set lower than the average
for the wider workforce
Set at a level lower than the average of salary increases
across the workforce, and to reflect the commitment
and effort of our executive directors, an increase of
4.35% will be made to the executive directors’ base
salaries with effect from 1 April 2023. An increase of
4.00% will be made to the Chair’s fee and the other
non-executive directors’ basic fee with effect from
1 April 2023.
Annual bonus – to be operated in line with
Remuneration Policy
The Remuneration Committee intends to operate the
bonus scheme for the year ending 28 January 2024
in line with the Remuneration Policy, with maximum
awards at 125% and continuing to be subject to a
combination of PBT and individual strategic objectives.
Details of bonus award levels and performance
measure weightings are provided on page 95.
Performance targets for these bonus awards will be
disclosed in the Annual Report on Remuneration for
the year ending 28 January 2024.
LTIP – awards at normal level of opportunity with
targets based on cumulative EPS, TSR and ESG
measures
In line with the Remuneration Policy, the Remuneration
Committee intends to grant LTIP awards at the normal
maximum opportunity of 150% of base salary in April
this year. These LTIP awards will be assessed
cumulatively over the following three years based on
stretching targets set across three performance
measures: EPS, TSR and ESG.
EPS is a key performance indicator for the Company
and shareholders, and remains a highly credible
measure of long term performance. Significant
uncertainty for UK focused consumer goods
businesses remains, therefore setting a three-year
forward looking cumulative EPS target is challenging.
However, the Remuneration Committee is confident
that the target range selected is appropriately stretching
and will help the Group drive growth in shareholder
earnings. The EPS targets have been set specifically
not taking into account the future impact of the
introduction of the Deposit Return Scheme (“DRS”)
in Scotland from August 2023. The overall impact
of the DRS is very challenging to assess with acceptable
accuracy at this early stage. The Remuneration
Committee has resolved to monitor the impact of the
DRS post its implementation with the expectation that
the EPS targets set in 2023 will be adjusted during the
vesting period to enable the DRS impact to be included
in the targets prior to the vesting date.
TSR is a relative performance measure which creates
strong alignment between the executive directors and
shareholders. As for the LTIP awards granted in 2022,
the TSR performance of the Company will be
compared over the three years to the TSR of the FTSE
250 index (excluding financial services).
The Remuneration Committee believes that
environmental sustainability is important to the long
term success of the business and the executive directors’
remuneration should be related to their performance in
this area. Consistent with the LTIP awards granted in
2022, the ESG performance of the Company will feature
as a performance metric for the 2023 LTIPs based on
environmental sustainability targets.
Details of the 2023 LTIP awards are provided on page
98. Details of the performance targets set for the 2023
LTIP awards will be disclosed in the Annual Report on
Remuneration for the year ending 28 January 2024.
I look forward to your support at the upcoming AGM.
David J. Ritchie
Chair of the Remuneration Committee
28 March 2023
* Items marked with an asterisk are non-GAAP measures.
Definitions and relevant reconciliations are provided in the Glossary
on pages 199 to 204.
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Annual report on remuneration
The following parts of the Remuneration Report are subject to audit, other than the elements explaining the application of the Remuneration Policy for 2023/24.
Single figure table – audited information
The aggregate remuneration provided to directors who have served as directors in the year ended 29 January 2023 is set out below, along with the aggregate remuneration
provided to such directors for the year ended 30 January 2022.
Director
Jan 23
Salary/
fees
£000
Jan 22
Salary/
fees
£000
Jan 23
Benefits
£000
Jan 22
Benefits
£000
Jan 23
Bonus
£000
Jan 22
Bonus
£000
Jan 23
Long term
incentives
£000
Jan 22
Long term
incentives
£000
Jan 23
Pension
£000
Jan 22
Pension
£000
Jan 23 Total
fixed
remuneration
£000
Jan 22 Total
fixed
remuneration
£000
Jan 23 Total
variable
remuneration
£000
Jan 22 Total
variable
remuneration
£000
Jan 23
Total
remuneration
£000
Jan 22
Total
remuneration
£000
Executive
R.A. White 503 487 41 39 462 599 506 – 269 167 813 693 968 599 1,781 1,292
S. Lorimer 340 335 18 18 318 412 348 – 77 68 435 421 666 412 1,101 833
J.D. Kemp 254 251 19 23 242 314 265 – 57 42 330 316 507 314 837 630
Non-executive
J.R. Nicolson* 25 147 – – – – – – – – 25 147 – – 25 147
M. Allen** 142 29 – – – – – – – – 142 29 – – 142 29
W.R.G. Barr 51 50 – – – – – – – – 51 50 – – 51 50
S.V. Barratt 53 52 – – – – – – – – 53 52 – – 53 52
Z.L. Howorth*** 48 29 – – – – – – – – 48 29 – – 48 29
P. Powell**** – 21 – – – – – – – – – 21 – – – 21
D.J. Ritchie 59 58 – – – – – – – – 59 58 – – 59 58
N.B.E. Wharton 59 58 – – – – – – – – 59 58 – – 59 58
Total 1,534 1,517 78 80 1,022 1,325 1,119 – 403 277 2,015 1,874 2,141 1,325 4,156 3,199
*
J.R. Nicolson resigned from the Board on 31 March 2022. The remuneration above was paid in respect of his services until that date.
**
M. Allen was appointed to the Board on 1 July 2021 and became Chair on 31 March 2022. The remuneration above was paid in respect of his services on the Board for the year to January 2022 and to 31 March
2022, and as Chair from 31 March 2022 to 29 January 2023.
***
Z.L. Howorth was appointed to the Board on 1 July 2021. The remuneration above was paid in respect of her services from that date.
****
P. Powell resigned from the Board on 1 July 2021. The above remuneration was paid in respect of her services until that date.
Directors’ Remuneration Report continued
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The figures in the single figure table on the previous page are derived from the following:
(a) Salary and fees
The amount of salary/fees received in the year. A salary sacrifice arrangement is operated by the Company. Employees who join this arrangement no
longer pay contributions to the pension scheme but receive a lower taxable salary. Directors’ salaries are shown gross of any salary sacrifice pension
contributions.
(b) Benefits
The value of benefits received in the year. These include car allowance, fuel benefit, private medical insurance, healthcare cash plan, flex-cash, the
value of SAYE options vesting in the year, and AESOP free and matching shares awarded in the year.
SAYE: option shares are valued at the market price of the option shares at the date of vesting less the option exercise price.
AESOP: free and matching shares are valued at market value at the date of award.
Details of the executive directors’ interests in the SAYE are set out on page 106.
(c) Bonus
A description of the annual bonus in respect of the year and Group and personal performance against which the bonus pay-out was determined is
provided on pages 94 and 95.
(d) Long term incentives
The value of LTIP awards that vest in respect of the year.
Details of the executive directors’ interests in the LTIP are set out on page 106.
(e) Pension
The pension figure includes:
• pension cash alternatives equal to the executive directors’ contractual pension provision; and
• for individuals in the 2008 Scheme’s defined benefit section, the additional value accrued in the year calculated using the HMRC method (using
a multiplier of 20).
Further details of pension benefits are set out on pages 98 and 99.
Individual elements of remuneration
Base salary and fees
Base salaries for individual executive directors for the year ended 29 January 2023 and for the following year are set out in the table below:
Executive director
Base salary for year ended
29 January 2023
£000
Base salary for year
ending 28 January 2024
£000 Increase %
R.A. White 493 513 4.35%
S. Lorimer 339 353 4.35%
J.D. Kemp 258 269 4.35%
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Details of non-executive directors’ fees for the year ended 29 January 2023 and for the following year are set out in the table below:
Non-executive director fee
Year ended
29 January 2023
£000
Year ending
28 January 2024
£000 Increase %
Chair of the Company* 158 165 4.00%
Basic fee 51 53 4.00%
Additional fee for chairing Audit and Risk Committee 8 8 -%
Additional fee for chairing Remuneration Committee 8 8 -%
Additional fee for chairing ESG committee – 2 -%
Additional fee for Senior Independent Director 2 2 -%
*
A market review of the Chair’s fees took place as part of the recruitment process for a new Chair of the Company, with the result that M. Allen’s fees as Chair were £160k from 31 March 2022 when he
succeeded J.R. Nicolson as Chair.
Benefits – audited information
The benefits figure for each of the executive directors is detailed as follows:
Year ended 29 January 2023
Executive director
Car and fuel benefit
£000
Other*
£000
AESOP awards
£000
Total
£000
R.A. White 39 1 1 41
S. Lorimer 16 1 1 18
J.D. Kemp 17 1 1 19
Total 72 3 3 78
*
Other costs included private medical insurance, healthcare cash plan and flex-cash as they are below £1,000 separately
The value of the AESOP awards is the sum of the AESOP free and matching shares awarded to the directors in the year.
Annual bonus
The maximum annual bonus award opportunity for each executive director in respect of the year ended 29 January 2023 was 125% of salary, with 80% of the bonus assessed
against the achievement of adjusted Group profit before tax, compared against a set of profit targets and 20% based on strategic objectives. In assessing bonuses to be
awarded, the Remuneration Committee decided to adjust the profit outturn in the year for c.£1.5m of adjusting items, primarily two exceptional and unbudgeted cost of
living allowances paid to the vast majority of employees during the year; this was wholly consistent with how wider workforce bonuses were assessed. The executive directors
earned a total of £1.02m as annual bonus for the year, representing 93.75% of R.A. White’s salary, 93.75% of S. Lorimer’s salary and 93.75% of J.D. Kemp’s salary. 20% of the
bonus will be deferred into shares for two years and subject to malus and clawback provisions, as set out in the current Remuneration Policy.
The target for the annual bonus based on profit before tax and performance against that target is set out in the table below. 50% of this element of the bonus could be earned
for on-target performance with zero paid for threshold performance and a broadly linear scale through to full payment of this element of the bonus for performance at or
above the maximum target.
Directors’ Remuneration Report continued
95
Strategic Report Corporate Governance Accounts
Threshold
target On target
Maximum
target
Actual
performance
Weighting as
percentage of total
bonus opportunity
Actual outcome as
percentage of total
bonus opportunity
Adjusted profit before tax £40.0m £43.0m £47.0m £45.0m 80% 60%
Strategic objectives for the year ended 29 January 2023 account for 20% of the bonus and targets were set around the Company’s key areas of strategic focus at the start of
the financial year. Details of the strategic objectives for the year ended 29 January 2023 and the Committee’s determination of performance against them is set out in the
table below.
The Remuneration Committee debated each of the directors’ strategic objectives in turn, having an in-depth discussion on an objective by objective basis to fully understand
the extent to which each strategic objective had been achieved and which elements of any objectives remained outstanding. The Remuneration Committee then attributed
an individual score to each objective. Given the commercial sensitivity surrounding the objectives these individual scores have not been disclosed. The cumulative totals are
set out below with a summary of the objectives set.
Measure Weighting Pay-out
R.A. White 20% 15%
Develop and deliver the DRS readiness plan
Deliver an objective related to the support of key growth drivers across the Group
Deliver an objective related to Group ESG initiatives
Deliver an objective related to enhancing shareholder value
S. Lorimer 20% 15%
Deliver an objective related to the internal performance reporting and management process
Deliver an objective related to the Group structure
Deliver an objective related to the impact of technology on the Group
Deliver a supply chain excellence objective
J.D. Kemp 20% 15%
Deliver a trading plan growth objective
Develop a plan related to the impulse channel
Deliver an objective related to digital strategy
Deliver an objective related to the commercial organisation
Annual bonus for 2023/24
For the 2023/24 financial year 80% of bonus potential will be assessed against growth in adjusted Group profit before tax, which is an important indicator of the success
of the Company’s strategy. Performance targets will be set at challenging levels, with 50% of this element of the annual bonus being earned for on-target performance.
The remainder of the annual bonus (20% of bonus potential) will be assessed against individual strategic objectives to align the reward structure with key strategic priorities
and to encourage behaviours which facilitate profitable growth and the future development of the business. The actual performance targets are not disclosed as they are
considered to be commercially sensitive at this time and should therefore remain confidential to the Company. The Remuneration Committee will continue to disclose how
the bonus earned relates to performance against the targets on a retrospective basis meaning this information will be disclosed in the Annual Report on Remuneration for
the year ending 28 January 2024.
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Long term incentives – audited information
Awards vesting in respect of the financial period
LTIP awards granted in November 2020 were subject to the following EPS and TSR performance measures:
% of maximum
opportunity
Threshold vesting at 20%
of the maximum award
Maximum vesting at 100%
of the maximum award
Actual cumulative
EPS for period
Actual vesting
(as a % of maximum for
each measure)
Cumulative EPS for the period including 2020/21, 2021/22
and 2022/23 50% 65.0p 75.0p 76.43p
50.0%
TSR* for the period including 2020/21, 2021/22 and 2022/23 50% Median Upper quartile –
21.1%
*
Ranked TSR performance measured against the constituents of the FTSE 250 index (excluding investment trusts and financial services companies)
The salary used in the calculation of the award is the individual director’s salary at 1 October 2020.
Details of LTIP awards vesting in respect of the financial period are set out below:
Year ended 29 January 2023
Executive director
Total shares
Number
Vesting (% of maximum
opportunity) %
Shares awarded*
Number
Share price**
£
LTIP value
£000
R.A. White 133,899 71.1% 99,802 5.07 506
S. Lorimer 92,174 71.1% 68,702 5.07 348
J.D. Kemp 70,219 71.1% 52,338 5.07 265
Total 296,292 220,842 1,119
*
Shares vesting under the LTIP for the year ended 29 January 2023 include dividend equivalents from the award date for each director.
**
The long term incentives figure for the year ended 29 January 2023 has been valued using the average closing share price for the three months ended 29 January
2023 as an estimate of the value of the incentive, as the actual value of the award will not be finalised until the closing share price is known when the incentive vests
in November 2023.
An estimate of the amount of LTIP awarded in November 2020 attributable to share price appreciation is set out below:
Executive director
Share price appreciation
£000
R.A. White 157
S. Lorimer 108
J.D. Kemp 82
Total 347
Directors’ Remuneration Report continued
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Strategic Report Corporate Governance Accounts
Awards granted during the financial period
During the year ended 29 January 2023 the following LTIP awards were granted equating to 150% of salary:
Executive director Type of award Number of shares Share price at grant
Market value at grant
£000
% of award
vesting at threshold
%
Performanceperiod
Years
(ends 26 January 2025)
R.A. White LTIP award – nil cost option 138,287 537p 743 20.0 3
S. Lorimer LTIP award – nil cost option 95,187 537p 511 20.0 3
J.D. Kemp LTIP award – nil cost option 72,513 537p 389 20.0 3
The share price at grant is the five-day average of the middle-market closing share prices preceding the date of grant rounded down.
The salary used in the calculation of the award is the individual director’s salary at 1 April 2022.
Vesting of the LTIP awards granted in the year ended 29 January 2023 will be based 60% on a cumulative EPS performance measure, 30% on a relative Total Shareholder
Return (“TSR”) performance measure and 10% on an Environmental Sustainability performance measure, as set out below:
(i) EPS performance measure (60% of LTIP award):
% linked to award
Threshold vesting at 20%
of the maximum award
Maximum vesting at 100%
of the maximum award
Cumulative EPS for the period including 2022/23, 2023/24 and 2024/25 60% 86.6p 95.7p
There is straight-line vesting between these points and no reward below threshold EPS performance.
(ii) Ranked TSR performance measured against the constituents of the FTSE 250 index (excluding investment trusts and financial services companies) (30% of LTIP award):
% linked to award
Threshold vesting at 20%
of the maximum award
Maximum vesting at 100%
of the maximum award
TSR for the period including 2022/23, 2023/24 and 2024/25 30% Median Upper quartile
There is straight-line vesting between these points and no reward below threshold TSR performance.
(iii) Environmental Sustainability performance measure (10% of LTIP award):
% linked to award
Threshold vesting at 20%
of the maximum award
Maximum vesting at 100%
of the maximum award
Science Based Target (carbon tonnes) for the period including 2022/23, 2023/24 and 2024/25 10% 4,715 4,194
There is straight-line vesting between these points and no reward if the threshold Science Based Target is not met.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Long term incentives for 2023/24
LTIP awards granted in 2023 will be granted with a maximum opportunity of 150% of basic salary for the executive directors. These LTIP awards will be based 60% on
a cumulative EPS performance measure, 30% on a relative TSR performance measure and 10% on an Environmental Sustainability performance measure for 2023/24,
2024/25 and 2025/26.
EPS is a key performance indicator for the Company and shareholders, and remains a highly credible measure of long term performance.
TSR is a relative performance measure which creates strong alignment between the executive directors and shareholders. The TSR performance of the Company will be
compared over the three years to the TSR of the FTSE 250 index (excluding financial services). 20% of the maximum award will vest for achieving threshold performance and
100% of the maximum award will vest for achieving maximum performance. There will be straight-line vesting between the points and no vesting below threshold performance.
The Environmental Sustainability performance measure for the LTIP awards granted in 2023 will be based around the Group’s No Time To Waste environmental sustainability
programme.
The EPS targets are considered commercially sensitive at this time on the basis that they give competitors insight into the Company’s longer term forecasts which the Board
considers confidential. The EPS targets will be disclosed in next year’s Annual Report on Remuneration. Significant uncertainty for UK focused consumer group businesses
remains, therefore setting a three year forward looking cumulative EPS target is challenging. However, the Remuneration Committee is confident that the target range
selected is appropriately stretching and will help the Group drive growth in shareholder earnings. The EPS targets have been set specifically not taking into account the future
impact of the introduction of the Deposit Return Scheme (“DRS”) in Scotland from August 2023. The overall impact of the DRS is very challenging to assess with acceptable
accuracy at this early stage. The Remuneration Committee has resolved to monitor the impact of the DRS post its implementation with the expectation that the EPS targets
set in 2023 will be adjusted during the vesting period to enable the DRS impact to be included in the targets prior to the vesting date.
Total pension entitlements – audited information
Executive directors are all members of the A.G. BARR p.l.c. (2008) Pension and Life Assurance Scheme (the “2008 Scheme”) or the A.G. Barr Retirement Plan. The 2008
Scheme has a defined benefit section and a defined contribution section. The defined benefit section was closed to new entrants from 14 August 2003 and to future accrual
from 1 May 2016. All assets held in the defined contribution section of the 2008 Scheme were transferred to the A.G. Barr Retirement Plan in September 2021. R.A. White is a
deferred member of the defined benefit section of the 2008 Scheme and ceased his accrual on 5 April 2011.
The movement in value of executive director pensions (which exclude any pension contributions made in respect of an individual under the Company’s salary sacrifice
arrangement) are detailed in the following table. This movement is made up of Company pension contributions, changes in the value of defined benefit pension scheme
accrual and pension cash equivalents:
Year ended 29 January 2023
Executive director
Defined benefit accrual
£000
Pension cash equivalent
£000
Total
£000
R.A. White 157 112 269
S. Lorimer – 77 77
J.D. Kemp – 57 57
Total 157 246 403
Directors’ Remuneration Report continued
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Strategic Report Corporate Governance Accounts
Details of the entitlement accruing to the director who is a deferred member of the defined benefit section are detailed in the table below:
Accrued pension at
29 January 2023
£000 Normal retirement age
R.A. White 92 63*
*
The normal retirement age specified in the 2008 Scheme rules for R.A. White is age 63, however he is also entitled under the 2008 Scheme rules to retire at age 60 without an actuarial reduction to his
pension benefits and without any consent required.
Early retirement can be taken at age 55 subject to Trustee consent. The accrued pension would be reduced relative to age 60 to take account of its early payment.
R.A. White ceased his accrual under the defined benefit plan on 5 April 2011. Under the terms of his service contract, R.A. White is entitled to revaluation of his deferred
benefits in line with RPI until his normal retirement date. The rules of the 2008 Scheme provide for revaluation increases in deferment in line with CPI. R.A. White elected for
Fixed Protection 2012 to protect his benefits accrued under the 2008 Scheme. To enable R.A. White to continue to benefit from Fixed Protection 2012, his deferred benefits
were re-valued in line with CPI and, to the extent that RPI exceeds CPI in any year, a corresponding additional contribution is paid to R.A. White in cash. In addition, R.A. White
will continue to be entitled to receive life assurance benefits as if he were in pensionable service under the 2008 Scheme until his normal retirement date notwithstanding the
termination of his employment with the Company, but only in circumstances where he is a “good leaver”.
Dependants of the executive directors are eligible for dependants’ pensions and the payment of a lump sum in the event of death in service. Where the 2008 Scheme
provides a pension on a defined benefit basis, final pensionable salary is used to determine the director’s pension entitlement. Where benefits are provided on a defined
contribution basis, the benefits depend on the director’s accumulated fund. Lump sum life assurance cover is provided at five or eight times pensionable salary dependent
upon the date of joining the 2008 Scheme.
No contributions were paid to the defined contribution section of the 2008 Scheme or the A.G. Barr Retirement Plan during the years ended 29 January 2023 or 30 January 2022.
All directors have elected to receive Company pension contributions in the form of a cash allowance. R.A. White, S. Lorimer and J.D. Kemp receive a cash allowance equal to
their contractual pension provision of 24% of salary.
Payments to past directors – audited information
There were no payments made to past directors during the year in respect of services provided to the Company as a director.
Payments for loss of office – audited information
No payments for loss of office were made during the year.
Statement of directors’ shareholding and share interests – audited information
The Remuneration Committee updated its share ownership guidelines applicable from 2020/21 and the CEO and other executive directors are required to build a shareholding
equal to 200% and 150% of gross basic salary respectively. Until this guideline is met, executive directors are required to retain all vested shares from the LTIP and half of any
bonus pay-out after tax to purchase shares in the Company. The full policy is disclosed in the Remuneration Policy approved by shareholders at the 2020 AGM.
For the purposes of assessing the extent to which the share ownership guidelines have been met by the executive directors, the following shares are included: wholly owned
shares (including those owned by a director’s spouse), LTIP shares that are in the holding period, and unvested deferred bonus shares provided there are no further performance
conditions. At the year end, R.A. White and J.D. Kemp met the respective 200% and 150% of gross basic salary requirement applicable for the year ended 29 January 2023,
with shareholdings equal to 411% and 328% of gross basic salary as at 29 January 2023 respectively. S. Lorimer was appointed to the Board on 5 January 2015 and is currently
required to build up a shareholding equal to 150% of his gross basic salary. S. Lorimer’s shareholding was equal to 111% of gross basic salary as at 29 January 2023. In accordance
with the Remuneration Policy, S. Lorimer is required to retain all net shares (after tax) acquired from the exercise of LTIP awards and half of his net bonus pay-out (after tax) to
purchase shares in the Company; the latter requirement will be net of the 20% of S Lorimer’s bonus which will be deferred into shares for two years referred to above.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
The interests of each executive director of the Company as at 29 January 2023 (including those held by their connected persons) were as set out below. There were no
changes to these interests between 29 January 2023 and 27 March 2023 with the exception of the following changes: an increase in R.A. White’s holding of 82 shares,
an increase in S. Lorimer’s holding of 83 shares and an increase in J.D. Kemp’s holding of 82 shares.
Director Type Owned outright
Exercised
during the year
Lapsed during
the year
Unvested
Total as at
29 January 2023
Subject to
performance
conditions
Not subject to
performance
conditions
Executive
R.A. White Shares 376,426 – – – – 376,426
LTIP share options – – (72,686) 415,523 – 415,523
SAYE options – – – – 3,925 3,925
AESOP matching shares – (97) – – 786 786
S. Lorimer Shares 63,828 – – – – 63,828
LTIP share options – – (42,946) 286,024 – 286,024
ESOS share options – – (2,222) – – –
SAYE options – – – – 3,925 3,925
AESOP matching shares – (97) – – 785 785
Shares – connected persons’ holding* – – – – – 749,326
J.D. Kemp Shares 156,523 – – – – 156,523
LTIP share options – – (38,114) 217,893 – 217,893
SAYE options – – – – 3,925 3,925
AESOP matching shares – (98) – – 785 785
Non-executive
W.R.G. Barr Shares 7,516,326 – – – – 7,516,326
Shares – connected persons’ holding** – – – – – 9,460,507
D.J. Ritchie Shares 1,000 – – – – 1,000
N.B.E. Wharton Shares 1,597 – – – – 1,597
Z.L. Howorth Shares 5,631 – – – – 5,631
M. Allen Shares 10,000 – – – – 10,000
*
S. Lorimer’s connected persons’ shareholding includes shares related to his position as director of Robert Barr Ltd, the trustee of various employee benefit trusts.
**
W.R.G. Barr’s connected persons’ shareholding includes shares related to his position as trustee of various family and charitable trusts.
Directors’ Remuneration Report continued
101
Strategic Report Corporate Governance Accounts
The “Owned outright” shares set out in the table above are the shares owned outright by the directors. These include any AESOP free shares awarded during the year and any
shares retained during the year following the exercise of LTIP awards and SAYE options.
The number of AESOP free shares awarded and share options exercised under the LTIP and SAYE in the year are included in the “Exercised during the year” column.
The table below shows the directors’ total shareholdings split between those with and without performance conditions. The non-executive directors’ shareholdings above are
all shares with no performance conditions.
Executive director
Shares – no performance
conditions
Share options –
performance conditions
Share options – no
performance conditions
Total shares/ share
options
R.A. White 37 7, 212 415,523 3,925 796,660
S. Lorimer 64,613 286,024 3,925 354,562
J.D. Kemp 157,308 217,893 3,925 379,126
There were no shares vested and unexercised as at 29 January 2023.
The following sections of the Remuneration Report are not subject to audit.
Performance graph and table
The graph below shows the Company’s Total Shareholder Return (“TSR”) performance against the FTSE 250 excluding investment trusts over the past ten years. In the opinion
of the Board, the FTSE 250 excluding investment trusts is the most appropriate index against which the TSR of the Company should be measured because it represents a broad
equity market index of which the Company is a constituent member and reflects the Company’s scale and complexity of operations.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
50
100
150
200
250
A.G. BARR FTSE 250 Ex.Investment Trusts
Total Shareholder Return
102
A.G. BARR p.l.c. Annual Report and Accounts 2023
CEO remuneration for previous ten years
The table below shows details of the total remuneration, annual bonus and LTIP paid out for R.A. White over the last ten financial years:
Total remuneration*
£000
Annual bonus as a % of
maximum opportunity
LTIP as a % of maximum
opportunity
Year ended 29 January 2023 1,781 75.0% 71.1%
Year ended 30 January 2022 1,292 100.0% 0.0%
Year ended 24 January 2021 710 0.0% 0.0%
Year ended 25 January 2020 739 0.0% 0.0%
Year ended 26 January 2019 1,434 91.0% 39.9%
Year ended 27 January 2018 1,279 78.0% 22.8%
Year ended 28 January 2017 915 23.0% 40.0%
Year ended 30 January 2016 839 0.0% 37.9%
Year ended 25 January 2015 1,075 75.5% 31.9%
Year ended 26 January 2014 989 57.8% 38.2%
Percentage change in director remuneration
The table below sets out, in relation to salary, taxable benefits (car allowance, fuel benefit) and annual bonus, the increase between the pay for the years ended 25 January
2020 through to the pay for the year ended 29 January 2023 for the executive and non-executive directors compared to the wider workforce. For these purposes, the wider
workforce includes all Group employees who were continuously employed by the Group during the four years ended 29 January 2023 but excludes executive and non-
executive directors.
Year ended 29 January 2023
Salary
Jan23*
£000
Benefits
Jan 23
£000
Annual bonus
Jan 23
£000
Salary
Jan 22
£000
Benefits
Jan 22
£000
Annual bonus
Jan22
£000
Salary
Jan 21
£000
Benefits
Jan 21
£000
Annual bonus
Jan 21
£000
Salary
Jan 20
£000
Benefits
Jan 20
£000
Annual bonus
Jan 20 £000
R.A. White 3.3% 5.1% (22.9%) 8.0% 21.2% 100.0% (4.3%) (8.5%) -% 1.8% -% (100.0%)
S. Lorimer 1.5% -% (22.8%) 19.5% (30.8%) 100.0% 0.8% 4.4% -% 1.8% (67.9%) (100.0%)
J.D. Kemp 1.2% (17.4%) (22.9%) 6.5% (4.2%) 100.0% (4.4%) -% -% 2.1% -% (100.0%)
M. Allen 389.7% -% -% 100.0% -% -% -% -% -% -% -% -%
W.R.G. Barr 2.0% -% -% 6.8% -% -% (5.0%) -% -% 2.1% -% -%
S.V. Barratt 1.9% -% -% 7.4% -% -% (1.7%) -% -% 2.1% -% -%
Z.L. Howorth 65.5% -% -% 100.0% -% -% -% -% -% -% -% -%
D.J. Ritchie 1.7% -% -% 6.6% -% -% (5.0%) -% -% 1.8% -% -%
N.B.E. Wharton 1.7% -% -% 10.4% -% -% 6.7% -% -% 38.3% -% -%
Wider workforce** 3.0% -% (32.8%) 1.8% -% 199% -% -% 100.0% 2.0% -% (100.0%)
*
The annual percentage change in salary is calculated by reference to actual salary paid for the financial year ended 29 January 2023 compared to financial year ended 30 January 2022.
**
Wider workforce salary changes are based on average % increase across the year. Bonuses are based on movement in annual bonuses accrued.
Directors’ Remuneration Report continued
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Strategic Report Corporate Governance Accounts
CEO Pay Ratio
The table below sets out the ratio of the A.G. BARR p.l.c. CEO single total figure of remuneration for 2022 (as detailed on page 92) as a ratio of the equivalent single figure for
the lower quartile, median and upper quartile UK employee (calculated on a full-time equivalent basis).
Total pay ratio Method 25th Percentile Median Percentile 75th Percentile
Year ended 29 January 2023 B 56:1 45:1 32:1
Year ended 30 January 2022 B 42:1 34:1 23:1
Year ended 24 January 2021 B 25:1 21:1 16:1
Year ended 25 January 2020 B 27:1 22:1 16:1
As is permitted by the legislation, and consistent with last year, we have calculated the ratio using Option B whereby representative employees are identified using the latest
A.G. BARR p.l.c. gender pay gap statistics as this was the most pragmatic approach and believed to produce representative results. A number of employees around the 25th,
50th and 75th percentile were identified and their total pay and benefits calculated to ensure that the most representative employees were selected. Employee pay for the
representative employees was calculated on the same basis as the CEO and so includes items such as short-term and long-term incentive payments relating to the financial
year ending 29 January 2023. The calculations have assumed that a full-time equivalent week consists of 37.5 working hours.
The regulations require the total pay and benefits and the salary component of total pay and benefits to be set out as follows:
Base salary Total pay and benefits
CEO remuneration £503,000 £1,781,000
25th percentile employee £21,349 £31,748
Median percentile employee £32,008 £39,785
75th percentile employee £46,423 £56,521
A.G. BARR p.l.c.’s principles for pay setting and progression in our wider workforce are the same as for our executives – total reward being sufficiently competitive to attract
and retain high calibre individuals without over-paying and providing the opportunity for individual development and career progression. The pay ratios reflect how remuneration
arrangements differ as accountability increases for more senior roles within the organisation and in particular the ratios reflect the weighting towards long-term value creation
and alignment with shareholder interests for the CEO. We are satisfied that the median pay ratio voluntarily reported this year is consistent with our wider pay, reward and
progression policies for employees. The median reference employee has the opportunity for annual pay increases, annual performance payments and career progression
and development opportunities.
Relative importance of spend on pay
The following table sets out the percentage change in dividends and the overall expenditure on pay (as a whole across the organisation).
Percentage change
Year ended 30 January
2022 £000
Year ended 29 January
2023 £000 % change
Dividends 13,365 13,922 4.2%
Overall expenditure on pay 45,400 50,200 10.6%
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The Remuneration Committee
The following directors were members of the Remuneration Committee during the year: D.J. Ritchie (Chair), S.V. Barratt and Z.L. Howorth.
M. Allen, in his role as Chair, is invited to attend the Remuneration Committee meetings on some occasions and to provide guidance on behalf of the Board as required.
During the year, the Remuneration Committee received advice from R.A. White (CEO) in respect of the remuneration of the other executive directors, who was not in
attendance when his own remuneration was being discussed. The Remuneration Committee received assistance from J.A. Barr (Company Secretary), who acts as secretary
to the Remuneration Committee, and from other members of management, who may attend meetings by invitation, except when matters relating to their own remuneration
are being discussed.
The Remuneration Committee meets at least twice a year and is responsible for determining, within agreed terms of reference, all aspects of the remuneration of the
executive directors, the Executive Committee and such other members of senior management as it is designated to consider. The Remuneration Committee reviews the
remuneration trends, pay levels and employment conditions across the Group. The Remuneration Committee is also responsible for determining the remuneration of the
Chair of the Company.
The Remuneration Committee recognises the importance of culture and effective employee engagement in the creation of a good workplace. Workforce engagement
sessions are held during the year, led by the Board’s designated workforce engagement director. The topic regarding how executive directors’ remuneration aligns with wider
Company pay policy – in terms of governance, structure and quantum – is included as a specific discussion item at workforce engagement sessions at least once per annum;
during the year this topic was discussed at the workforce engagement session held in November 2022. The Board receives regular updates on workforce engagement
throughout the year. Further information on employee engagement is included in the Corporate Governance Report on pages 78 and 79.
The Remuneration Committee carried out an externally facilitated review of its performance and effectiveness during the year. This review included a detailed and
comprehensive evaluation of the performance and effectiveness of the Remuneration Committee using written survey questionnaires, which were completed by members
of the Remuneration Committee and the Company Secretary. The results of the evaluation were shared with the Remuneration Committee. Overall, the review found that the
Remuneration Committee was functioning in an effective manner and performing satisfactorily, with no major issues identified.
Key activities in the year
The Remuneration Committee met four times during the financial year. Key activities are shown below:
• Undertook a review of the existing Remuneration Policy at the required three-year point, assessed the appropriateness of the Policy and agreed to recommend proposed
changes to the Policy to shareholders for approval at the 2023 AGM;
• Consulted with major shareholders in relation to the proposed changes to the Remuneration Policy and considered feedback received in response thereto;
• Undertook a review of the existing LTIP rules, assessed the appropriateness of the rules and agreed to recommend updated LTIP rules to shareholders for approval at the
2023 AGM;
• Consulted and engaged with relevant shareholders who were unable to support the resolution to approve the Directors’ Remuneration Report put to shareholders at the
2022 AGM to understand their views;
• Reviewed remuneration trends, pay levels and employment conditions across the Company;
• Reviewed and set annual salaries for the executive directors, divisional directors and Executive Committee consistent with the wider workforce;
• Set targets for the annual bonus for the executive directors, divisional directors and the Executive Committee;
• Reviewed and approved the grant of LTIP awards to the executive directors and the divisional directors;
• Set targets for the LTIP for the executive directors and a divisional director;
• Considered performance measures for the LTIP awards to be granted in the following year;
• Reviewed and approved a proposal in principle to introduce LTIP awards for level 1 employees with effect from 2023;
• Reviewed and set annual fees for the Chair of the Company;
• Reviewed achievement against targets set and determined the appropriate level of pay-out for the annual bonus for the executive directors, divisional directors and the
Executive Committee in the context of wider business performance;
• Reviewed achievement against targets set and determined the appropriate level of pay-out for the LTIP for the executive directors in the context of wider business
performance;
Directors’ Remuneration Report continued
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Strategic Report Corporate Governance Accounts
• Received status updates on in-flight LTIP awards;
• Reviewed and recommended the Directors’ Remuneration Report for the year ended 30 January 2022 to the Board for approval;
• Reviewed the executive directors’ shareholdings against shareholding guidelines;
• Reviewed market and corporate governance updates to ensure the Remuneration Committee remained up to date on the quickly evolving governance landscape and
best practice;
• Reviewed the Remuneration Committee’s terms of reference; and
• Review the Remuneration Committee’s performance and effectiveness during the year.
The terms of reference of the Remuneration Committee are available on the Company’s website, www.agbarr.co.uk.
External adviser
During the year, the Remuneration Committee was assisted in its work by the following external consultants:
Adviser Details of appointment Services provided by the Adviser
Fees paid by the Company for
advice to the Remuneration
Committee and basis of charge
Other services provided to the
Company in the year ended
29 January 2023
PricewaterhouseCoopers
LLP (‘PwC’)
Appointed by the
Remuneration
Committee in January
2022 following a
competitive tender
process.
Assistance with the review of the Directors’ Remuneration Policy
Assistance with the review of the LTIP rules.
Assistance with the preparation of the Directors’ Remuneration
Report.
Attendance at Remuneration Committee meetings.
Advice on market practice developments in executive pay.
£57,000
Charged on a retainer
and time/cost basis.
Consulting services to
management
The Remuneration Committee is satisfied that all advice received was objective and independent. PwC is a member of the Remuneration Consultants Group and, as such,
voluntarily operate under the Code of Conduct in relation to executive remuneration consulting in the UK.
Statement of voting at last AGM
The following table sets out actual voting in respect of the resolutions to approve the 2022/22 Annual Report on Remuneration at the Company’s AGM on 27 May 2022
(‘2022 AGM’) and the Remuneration Policy at the Company’s AGM on 25 June 2020.
Resolution Votes for % of vote Votes against % of vote Votes withheld
Approve Annual Report on Remuneration 57,671,927 73.29% 21,017,122 26.71% 1,956
Approve Remuneration Policy 64,446,604 91.20% 6,216,945 8.80% 2,039,440
As noted above, at the 2022 AGM the resolution to approve the Directors’ Remuneration Report was passed with 73.29% votes in favour. As stated in the announcement
published on the date of the 2022 AGM, the Board subsequently consulted and engaged with its largest shareholders who were unable to support the resolution to
understand their views. An update statement was published on 27 September 2022, which noted that the primary concern raised by shareholders related to the structure
and performance targets in relation to the 2021 long-term incentive arrangements – these were specific to the exceptional circumstances caused by the Covid pandemic
and will not be repeated under normal circumstances. The Board is grateful to those shareholders who took part in the engagement process and values the feedback
provided. The Committee will continue to engage with its largest shareholders on executive directors’ remuneration going forward. This statement is provided in accordance
with Provision 4 of the Code.
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Additional information
Executive directors’ interests in the LTIP
The individual interests of the executive directors under the LTIP are as follows:
LTIP director Date of award
At 30 January 2022
Number Awarded Number Vested Number Lapsed Number
At 29 January 2023
Number Exercisable from
R.A. White
04 April 2019 72,686 – – (72,686 ) – 04 April 2022
02 November 2020 133,899 – – – 133,899 02 November 2023
12 April 2021 143,337 – – – 143,337 12 April 2024
11 April 2022 – 138,287 – – 138,287 11 April 2025
S. Lorimer
04 April 2019 42,946 – – (42,946) – 04 April 2022
02 November 2020 92,174 – – – 92,174 02 November 2023
12 April 2021 98,663 – – – 98,663 12 April 2024
11 April 2022 – 95,187 – – 95,187 11 April 2025
J.D. Kemp
04 April 2019 38,114 – – (38,114) – 04 April 2022
02 November 2020 70,219 – – – 70,219 02 November 2023
12 April 2021 75,161 – – – 75,161 12 April 2024
11 April 2022 – 72,513 – – 72,513 11 April 2025
Executive directors’ interests in the Executive Share Option Scheme (‘ESOS’)
The individual interests of the executive directors under the ESOS are as follows:
ESOS director Date of award
At 30 January 2022
Number Awarded Number Vested Number Lapsed Number
At 29 January 2023
Number Exercisable from
S. Lorimer 04 April 2019 2,222 – – (2,222) – 04 April 2022
Executive directors’ interests in the SAYE
The individual interests of the executive directors under the SAYE scheme are as follows:
SAYE director
At 30 January 2022
Number Granted Number Exercised Number Lapsed Number
At 29 January 2023
Number
Option price
Pence Exercisable from
R.A. White 3,925 – – – 3,925 469 01 July 2024
S. Lorimer 3,925 – – – 3,925 469 01 July 2024
J.D. Kemp 3,925 – – – 3,925 469 01 July 2024
Approval
This report was approved by the Board and signed on its behalf by
David J. Ritchie
Chair of the Remuneration Committee
28 March 2023
Directors’ Remuneration Report continued
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Directors’ Remuneration Policy
This part of the report sets out the Company’s Directors’ Remuneration Policy (the “Policy”) which will be put to a shareholder vote at the 2023 AGM and, subject to shareholder
approval, will become effective for three years from the close of that meeting. The Policy for the executive directors has been determined by the Remuneration Committee.
Certain minor changes have been made to the Policy to create better alignment with UK corporate governance best practice. This includes changes to the pension provision
for new executive directors in order to align contribution levels with the wider workforce. Otherwise, the Policy remains broadly the same as that approved by shareholders
at the 2020 AGM.
Key changes to existing Policy
The table below highlights the key changes between the previously approved Remuneration Policy and the Policy being presented at the 2023 AGM.
Element Proposed changes to current Policy
Pension New executive directors joining the Company from 1 January 2023 will receive pension allowances in line with the contribution levels
available to the wider workforce.
Annual bonus Increase in existing two-year deferral applied to any bonus paid from 20% to 25%. This change in deferral will apply to bonuses paid in
respect of the 2023/24 financial year and beyond.
Extension of malus and clawback triggers (see below).
Long-term incentive Plan (“LTIP”) All LTIP awards granted after the 2023 AGM will be subject to a holding period of two years post vesting. Under the current Policy the post
vesting holding period of two years only applies where an individual’s shareholding is below 300% of salary.
Extension of malus and clawback triggers (see below).
In-position shareholding
requirement
For all new executive director appointments, the shareholding requirement will be set at 200% of salary (currently 150% of salary for
executive directors, excluding the CEO where the requirement is already 200%).
Post-employment
shareholding requirement
For all new executive director appointments, the post-employment shareholding requirement will be set at the lower of their shareholding
at their point of departure and their in-position shareholding requirement for a period of two years. Under the current Policy, the
requirement applies for a period of one year.
Malus and clawback Malus and clawback triggers extended beyond the current misstatement and misconduct triggers to align with latest governance guidelines.
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Executive directors
The table below describes each of the elements of the remuneration package for the executive directors:
Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Base salary
Core element of fixed remuneration,
reflecting the size and scope of the
role.
Purpose is to recruit and retain
directors of the calibre required for
the Company.
Usually reviewed annually.
Salary levels are determined by the
Remuneration Committee taking into
account a range of factors including:
• role, experience and individual
performance;
• pay for other employees in the Group;
• prevailing market conditions; and
• external benchmarks for similar roles
at comparable companies.
Although there is no overall maximum,
salary increases are normally reviewed
in the context of the salary increases
across the wider Group.
The Remuneration Committee may
award salary increases above this level
to take account of individual
circumstances such as:
• increase in scope and responsibility;
• increase to reflect the executive
director’s development and
performance in the role; or
• alignment to market level.
Not applicable.
Benefits
Ensures the overall package is
competitive.
Purpose is to recruit and retain
directors of the calibre required
for the Company.
Executive directors receive benefits in line
with market practice, which may include, for
example, a car allowance or provision of a
company car, a biennial health check, private
medical insurance, life assurance and the
ability to “buy” or “sell” holidays under the
Company’s flexible benefits plan.
Other benefits may be provided based on
individual circumstances. These may include,
for example, relocation and travel allowances.
Whilst the Remuneration Committee
has not set an absolute maximum on
the levels of benefits executive
directors receive, the value of the
benefit is at a level which the
Remuneration Committee considers
appropriate against the market and
provides a sufficient level of benefit
based on individual circumstances.
Not applicable.
Annual bonus
Rewards performance against annual
targets which support the strategic
direction of the Group.
Awards based on performance against key
financial and/or strategic targets and/or the
delivery of personal objectives.
Pay-out levels are determined by the
Remuneration Committee after the year end
based on performance against those targets.
The Remuneration Committee has discretion
to amend the bonus pay-out if, in its
judgement, any formulaic output does not
produce a fair result for either the executive
director or the Company, taking into account
overall business performance.
Maximum bonus opportunity is 125%
of base salary.
Targets are set annually
reflecting the Company’s
strategy and aligned with
key financial, strategic and/
or individual objectives.
Targets, whilst stretching,
do not encourage
inappropriate business
risks to be taken.
Directors’ Remuneration Report continued
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Strategic Report Corporate Governance Accounts
Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Annual bonus
continued
25% of any bonus earned will be deferred into
shares for two years.
At any time before the deferred bonus shares
are released, the Remuneration Committee
has the right to cancel the award if it has not
been exercised, or require repayment of
some or all of the award in the following
circumstances:
• discovery of a material misstatement;
• error, or inaccurate or misleading
information;
• action or conduct of a participant which
amounts to fraud or gross misconduct;
• regulatory censure or reputational
damage;
• material failure of risk management; and
• corporate failure.
For up to two years following the
determination of a bonus pay-out, the
Remuneration Committee has the right to
recover some or all of the bonus pay-out
in the circumstances set out above. The
Remuneration Committee may make a
dividend equivalent payment (“Dividend
Equivalents”) to reflect dividends that would
have been paid over the period from grant
to vesting on shares that vest. This payment
may be in the form of additional shares
or a cash payment equal to the value of
those additional shares.
At least 80% of the bonus
is assessed against key
financial performance
metrics of the business and
the balance may be based
on non-financial strategic
measures and/or individual
performance.
Financial metrics
There is no minimum
payment at threshold
performance, up to 50%
of the maximum potential
for this element of the
bonus will be paid out for
on-target performance
and all of the maximum
potential will be paid out for
maximum performance.
Non-financial or
individual metrics
Payment of the non-
financial or individual
metrics will apply on a
scale between 0% and
100% based on the
Remuneration Committee’s
assessment of the extent
to which a non-financial
or individual performance
metric has been met.
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Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Long Term
Incentive
Plan (“LTIP”)
Incentivises executive directors over
the longer term and aligns their
interests with those of shareholders.
Under the LTIP, awards of conditional shares
or nil cost share options may be made with
vesting dependent on the achievement
of performance conditions set by the
Remuneration Committee, normally over
a three year performance period. Awards
granted over shares may be settled in cash at
the election of the Remuneration Committee.
As described on page 120, awards may
also vest in “good leaver” circumstances
or on the death of a participant or on a
change of control.
All awards made under the LTIP will
be subject to a two year post-vesting
holding period.
For up to two years following the vesting date
of an award, the Remuneration Committee
has the right to cancel the award if it has not
been exercised, or require repayment of
some or all of the award, in the following
circumstances:
• discovery of a material misstatement;
• error, or inaccurate or misleading
information;
• action or conduct of a participant which
amounts to fraud or gross misconduct;
• regulatory censure or reputational
damage;
• material failure of risk management; and
• corporate failure.
The Remuneration Committee has the right
to reduce or cancel unvested awards and/or
delay their vesting in the circumstances set
out above.
The normal maximum award is 150% of
annual base salary in respect of a
financial year. Under the LTIP rules the
overall maximum opportunity that may
be granted in respect of a financial year
will be 200% of annual base salary. The
normal maximum award limit will only
be exceeded in exceptional
circumstances such as the recruitment
or retention of a senior employee.
The vesting of awards is
subject to the satisfaction
of performance targets set
by the Remuneration
Committee.
The performance measures
are reviewed regularly to
ensure they remain relevant
but will be based on key
financial and/or strategic
and/or total shareholder
return related measures.
The relevant metrics and
the respective weightings
may vary each year based
upon Company strategic
priorities.
Performance measures
and weightings will be set
out in the Annual Report
on Remuneration for the
relevant financial year,
typically including a split
of key financial and/or
strategic and/or total
shareholder return related
measures.
For achievement of
threshold performance
20% of the maximum
opportunity will vest.
There will usually be
straight line vesting
between threshold and
maximum performance.
Directors’ Remuneration Report continued
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Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Long Term
Incentive
Plan (“LTIP”)
continued
The Remuneration Committee has discretion
to amend the level of LTIP vesting if, in its
judgement, any formulaic output does not
produce a fair result for either the executive
director or the Company, taking into account
overall business performance.
The Remuneration Committee may make
a dividend equivalent payment (“Dividend
Equivalents”) to reflect dividends that would
have been paid over the period from grant
to vesting on shares that vest. This payment
may be in the form of additional shares
or a cash payment equal to the value of those
additional shares.
All employee
share
schemes
To encourage all employees
to make a long-term investment
in the Company’s shares in a tax
efficient way.
Executive directors are eligible to participate
in a HMRC tax-advantaged All-Employee
Savings Related Share Option Scheme
(“SAYE”) under which they make monthly
savings over a period of three or five years
linked to the grant of an option over the
Company’s shares with an option price which
can be at a discount to the market value of
shares on grant.
Executive directors are also eligible to
participate in a HMRC tax-advantaged
All-Employee Share Ownership Plan
(“AESOP”). The executive directors may
participate in all sections of the AESOP,
being the partnership and matching
shares section, the free share section
and the dividend share section.
Participation limits are those set by the
UK tax authorities from time to time.
Not applicable.
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Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Retirement
benefits
Purpose is to recruit and retain
directors of the calibre required for
the Company. Provides market
competitive post-employment
benefits (or cash allowance
equivalent).
Executive directors are eligible to participate
in the A.G. Barr Retirement Plan. There is also
a closed A.G. BARR p.l.c. (2008) Pension and
Life Assurance Scheme (the “Scheme”), which
comprises a defined contribution section and
a defined benefit section. The defined benefit
section was closed to new entrants from
14 August 2003 and to future accrual from
1 May 2016. The defined contribution section
was closed to new entrants and new
contributions from 30 June 2021 and all
assets held in the defined contribution
section were transferred to the A.G. Barr
Retirement Plan in September 2021.
Details of the entitlement accruing to the
executive director who is a deferred member
of the defined benefit section are set out in
the table on page 98. The contributions paid
to the A.G. Barr Retirement Plan in respect
of the executive directors are disclosed on
page 98.
Executive directors may elect to take a
cash allowance instead of contributions
into a pension plan.
For newly appointed executive
directors joining after 1 January 2023,
pension contribution levels will be
aligned to the level available to the
wider workforce (currently 8% of
salary).
Incumbent executive directors will
receive their current pension
contribution of 24% of salary.
The Remuneration Committee has
discretion to vary the delivery
mechanism for retirement benefits,
however the exercise of this discretion
will not exceed the relevant limits
above for the provision of executive
directors’ retirement benefits.
Incumbent executive director R.A.
White ceased his accrual under the
defined benefit section on 5 April 2011.
For R.A. White, the Company’s
maximum contribution is 24% of salary
plus any contractual entitlement in
respect of a shortfall in his deferred
pension revaluation as a consequence
of Fixed Protection 2012.
The Company has closed the defined
benefit section of the Scheme to new
members and future accrual. The only
executive director who is a deferred
member will continue to receive
benefits in accordance with the terms
of the Scheme, subject to separately
agreed contractual arrangements,
including the arrangement summarised
below:
Not applicable.
Directors’ Remuneration Report continued
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Strategic Report Corporate Governance Accounts
Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Retirement
benefits
continued
R.A. White will continue to be entitled
to receive life assurance benefits as if
he were in pensionable service under
the Scheme until his normal retirement
date notwithstanding the termination
of his employment with the Company,
but only in circumstances where he
is a “good leaver”, as set out in his
service contract.
The maximum Company contribution
under the A.G. Barr Retirement Plan
in respect of the remaining executive
directors is 24% of salary. All executive
directors have now elected to receive
Company pension contributions in the
form of a cash allowance.
Shareholding
guidelines
Purpose is to further align the
executive directors’ long term
interests with those of shareholders.
During employment
The CEO and new executive directors must
retain all shares acquired under LTIP awards
and deferred bonus shares and retain half of
any bonus pay-out after tax (net of the
relevant deferred bonus shares) to purchase
shares in the Company until the value of their
shareholding is equal to 200% of gross basic
salary. Incumbent executive directors (other
than the CEO) must retain all shares acquired
under LTIP awards and deferred bonus shares
and retain half of any bonus pay-out after tax
(net of the relevant deferred bonus shares)
to purchase shares in the Company until the
value of their shareholding is equal to 150%
of gross basic salary.
Until the relevant shareholding is acquired,
the executive director may not, without
Remuneration Committee approval, sell
shares other than to finance any tax liabilities
arising from the vesting or release of awards.
Not applicable. Not applicable.
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Element Purpose and link to strategy Operation Maximum opportunity Performance measures
Shareholding
guidelines
continued
Post-employment
Newly appointed executive directors must
retain for two years post-employment any
shareholding arising from shares awarded/
vesting from both the deferred bonus and
LTIP, up to the above shareholding guidelines.
Incumbent executive directors must retain
for one year post-employment any
shareholding arising from shares awarded/
vesting from both the deferred bonus and
LTIP after 26 January 2020, up to the above
shareholding guidelines.
Chair and non-executive directors
The table below sets out an overview of the remuneration of non-executive directors:
Purpose and link to strategy Approach of the Company
Fees are the sole element of remuneration provided
to non-executive directors in relation to the fulfilment
of this role. Fees are set at a level that reflects market
conditions and is sufficient to attract individuals with
appropriate knowledge and expertise.
Fees are normally reviewed annually.
The remuneration of the Chair is determined by the Remuneration Committee. Fees are set at a level which reflects
the skill, knowledge and experience of the individual, whilst taking into account appropriate market positioning.
The Board is responsible for setting the fees of the other non-executive directors. Fees may include a basic fee and
additional fees for further responsibilities (for example, chairing of Board committees and senior independent
directorship). Fees are set taking into account several factors, including the size and complexity of the business,
appropriate market data and the expected time commitment and contribution for the role.
Non-executive directors, in their capacity as non-executive, do not participate in any of the Company’s share
schemes or bonus schemes nor do they receive any pension contributions. Non-executive directors may be eligible
to receive benefits such as the use of secretarial support, travel costs (including any tax incurred on these costs) or
other benefits that may be appropriate.
Actual fee levels are disclosed in the Directors’ Annual Remuneration report for the relevant financial year.
Where an employee (other than an executive director) of the Company sits on the Board in an individual capacity,
the fee they receive as a director shall be governed by this Remuneration Policy for non-executive director fees,
but the Remuneration Policy does not apply to the pay and benefits they receive as a result of their employment.
Directors’ Remuneration Report continued
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Remuneration principles
The Remuneration Committees approach to executive director Policy and practices is aligned to the Company’s strategic objectives, shareholders’ interests and the factors
set out in Provision 40 of the 2018 UK Corporate Governance Code (the “Code”), with the aim of supporting the Company’s strategy and promoting the long term sustainable
success of the business.
The table below describes how the Remuneration Committee has addressed each of the factors set out in Provision 40 of the Code.
Factor How this has been addressed
Clarity and simplicity
The reward framework aims to embed transparency and simplicity in the Policy and remuneration practices. The
Remuneration Committee consults with major shareholders in advance of key proposed changes to executive
remuneration, for example when reviewing the Policy ahead of the 2023 AGM. Feedback from internal stakeholders
and comments from the proxy voting agencies were also sought. The Remuneration Committee also engaged
with independent external advisers to minimise the risk of any conflicts of interest. The Remuneration Committee
strived to create a refreshed Policy which is clear and simple, aligned to Company culture, values and strategy and
demonstrates strong corporate governance. It wants participants to be able to understand the Policy and have
a clear line of sight between their decisions and behaviours and the effect that these decisions will have on the
variable reward outcomes. Equally, it wants to ensure that reward for executive directors is straightforward for both
shareholders and the wider workforce to understand.
The Company engages directly with the wider workforce on their remuneration through a variety of methods,
including workforce engagement sessions, regular briefing sessions and the annual employee engagement survey.
Risk
The Remuneration Committee aims to ensure that there is an appropriate balance between risk and reward. The
remuneration framework includes various features designed to mitigate reputational, behavioural and other risks,
including:
– The Policy encourages directors to continue to take a long-term view when making decisions by increasing the
level of share deferral for the annual bonus and applying a default holding period for vesting LTIP awards, increasing
the shareholding guideline for new executive directors, and extending the post-employment shareholding
requirement for new executive directors to ensure that their interests continue to be aligned to shareholders after
they have left the business for longer.
– The Policy contains extended malus and clawback provisions which the Remuneration Committee can use in
certain prescribed circumstances to recover amounts paid to directors or to cancel any unreleased share awards.
– The Remuneration Committee has broad discretion to override the formulaic outcomes of the variable rewards
to ensure that payments to directors reflect the Company’s performance in the round.
Predictability
The Policy sets out the potential award levels and vesting outcomes applicable to the annual bonus and long term
incentive arrangements. Incentive awards are capped as a percentage of salary, which reduces the risk of any
unanticipated pay outcomes. As set out above, the Remuneration Committee may apply malus, clawback and
reasonableness discretion where appropriate.
Proportionality
The Policy was benchmarked against market practice by independent external advisers. Performance conditions for
the annual bonus and long-term incentive arrangements require a threshold level of performance to be achieved
before any pay-out is made. These performance conditions are set with the aim of ensuring that there is a clear link
between individual awards and the delivery of the Company’s long-term strategy and success of the business.
Alignment to culture
The Remuneration Committee is satisfied that the Company’s incentive schemes are fit for purpose and continue
to be aligned with Company strategy, through choosing performance metrics which reflect the Company’s most
important KPIs and are aligned with Company purpose, culture and values.
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Explanation of performance metrics chosen and the target setting process
Performance measures are selected that are aligned to the Company’s strategy. Stretching performance targets are set each year for the annual bonus and LTIP awards. When
setting these performance targets, the Remuneration Committee will take into account a number of different reference points, which may include the Company’s business
plans and strategy and the market environment. Full payment or vesting will only occur for what the Remuneration Committee considers to be stretching performance.
Additionally, the Remuneration Committee has discretion to change formulaic outcomes to ensure that payments made through variable incentive plans are proportionate
to the Company’s overall performance.
The annual bonus performance targets have been selected to provide an appropriate balance between incentivising directors to meet financial targets for the year and
achieving strategic and/or personal objectives. The Remuneration Committee also aims to make sure that targets are set in line with the Company’s risk appetite so as to
ensure that executive directors are not incentivised to take inappropriate risks.
The LTIP performance targets reflect the Company’s strategic objectives and therefore the financial and strategic decisions which ultimately determine the success of the
Company. The LTIP performance measures may be based on key financial and/or strategic and/or total shareholder return related measures. LTIP performance will normally
be based on Earnings Per Share, which is a key measure of the Company’s profitability, relative Total Shareholder Return to further strengthen the link between the interests
of the executive directors and the shareholders and a performance measure aligned with Environmental Sustainability.
The Remuneration Committee retains the ability to adjust or set different performance measures if events occur (such as a change in strategy, a material acquisition and/or
a divestment of a Group business or a change in prevailing market conditions) which cause the Remuneration Committee to determine that the alternative measures are
more suitable either for a defined period or for the foreseeable future so that they achieve their original purpose.
Awards and options may be adjusted in the event of a variation of share capital in accordance with the Scheme rules.
Policy for the remuneration of employees generally
Remuneration arrangements are determined throughout the Group based on the same principle that reward should be achieved for delivery of the business strategy and
should be sufficient to attract and retain high calibre talent.
All employees are eligible to receive base salary, retirement benefits and other benefits based on role, seniority and location. The majority of employees are currently eligible
to receive awards under an annual bonus plan, with only the most senior employees currently eligible to participate in the LTIP as set out below.
The annual bonus arrangements for the senior management team are similar to those for the executive directors in that targets are set annually dependent on financial and/or
non-financial performance metrics. The key principles of the remuneration philosophy are applied consistently across the Group below this level, taking account of the
seniority of employees.
Approach to recruitment remuneration
The Policy aims to facilitate the appointment of individuals of sufficient calibre to lead the business and execute the strategy effectively for the benefit of shareholders. When
appointing a new director, the Remuneration Committee seeks to ensure that arrangements are in the best interests of the Company and in line with market practice.
When agreeing the level of remuneration appropriate for the individual, the Remuneration Committee will take into consideration a number of relevant factors, which may
include the calibre of the individual, the candidate’s existing remuneration package, and the specific circumstances of the individual including the jurisdiction from which the
candidate was recruited.
The Remuneration Committee will typically seek to align the remuneration package, including salary, benefits and pension, with the Policy (as set out in the Policy table).
The maximum level of variable remuneration which may be granted (excluding buy-out awards referred to below) is 325% of salary (in line with this Policy). Subject to this
overall maximum variable remuneration, incentive awards will only be granted above the normal maximum annual award opportunities where the Remuneration Committee
considers there to be a commercial rationale, which may include but is not limited to circumstances where an executive director is recruited at a time in the year when it
would be inappropriate to provide a bonus and/or LTIP award for that year as there would not be sufficient time to assess performance. The quantum in respect of the
Directors’ Remuneration Report continued
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months employed during the year may be transferred to the subsequent year so that reward is provided on a fair and appropriate basis. The Remuneration Committee will
ensure that any such awards are linked to the achievement of appropriate and challenging performance targets and will be forfeited if performance or continued employment
conditions are not achieved. The Remuneration Committee may also alter the performance measures, performance period and vesting period of the bonus and/or LTIP
award, if the Remuneration Committee determines that the circumstances of the recruitment merit such alteration. The rationale would be clearly explained in the Directors’
Remuneration Report following grant. The individual will move over time onto a remuneration package that is consistent with the normal maximum annual bonus and LTIP
award opportunities set out in the Policy table.
The Remuneration Committee retains discretion to include other remuneration components or awards which are outside the specific terms of the Policy (but subject to the
limit on variable remuneration) to facilitate the hiring of candidates of an appropriate calibre, where the Remuneration Committee believes there is a need to do so in the best
interests of the Company. The Remuneration Committee would ensure that awards within the 325% of salary variable remuneration limit are linked to the achievement of
appropriate and challenging performance measures. The Remuneration Committee will not use this discretion to make a non-performance related incentive payment (for
example a “golden hello”).
In some circumstances, the Remuneration Committee may make payments or awards to recognise or “buy-out” remuneration arrangements forfeited on leaving a previous
employer. The Remuneration Committee will normally aim to do so broadly on a like-for-like basis, taking into account a number of relevant factors regarding the forfeited
arrangements, which may include the form of award, any performance conditions attached to the awards and the time at which they would have vested. These payments or
awards are excluded from the maximum level of variable remuneration referred to above, however the Remuneration Committee’s intention is that the value awarded would
be no higher than the expected value of the forfeited arrangements. Where considered appropriate, such payments or awards will be liable to “malus” and/or “clawback” on
early departure.
Any share awards referred to in this section will be granted as far as possible under the Company’s existing share plans. If necessary, and subject to the limits referred to above,
recruitment awards may be granted outside of these plans as currently permitted under the Listing Rules which allow for the grant of awards to facilitate, in exceptional
circumstances, the recruitment of an executive director.
Where a position is fulfilled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be allowed to continue according to the original
terms.
Where necessary, the Company will pay appropriate relocation, travel and subsistence costs. The Remuneration Committee will seek to ensure that no more is paid than
is necessary.
Fees payable to a newly appointed Chair or non-executive director will be in line with the fee policy in place at the time of appointment.
Illustrations of application of Remuneration Policy
The charts below set out an illustration of the Policy for 2023/24 in line with the Policy above and include base salary, pension, benefits and incentives. The charts provide an
illustration of the proportion of total remuneration made up of each component of the Policy and the value of each component.
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R.A. White – total remuneration S. Lorimer – total remuneration
23%
45%100%
£456k
£994k
£1,691k
£1,426k
32%
38%
31%
31% 26%
32%
26%
16%
Minimum Target Maximum Maximum
(with 50% share
price appreciation)
Minimum Target Maximum Maximum
(with 50% share
price appreciation)
22%
46%100%
£677k
£1,459k
£2,473k
£2,088k
32%
31%
32%
37%
26%
27%
31%
16%
J.D. Kemp – total remuneration
Minimum Target Maximum Maximum
(with 50% share
price appreciation)
22%
46%
100%
£353k
£763k
£1,294 k
£1,092k
32%
37%
31%
32% 27%
31%
26%
16%
15%
Base salary, benefits and pension Annual bonus LTIP LTIP – share price appreciation
Directors’ Remuneration Report continued
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Four scenarios have been illustrated for each executive director:
Fixed pay Annual Bonus LTIP
Minimum performance
Fixed elements of remuneration – base
salary, benefits and pension only.
Base salary is the forward looking salary
(i.e. the salary effective from 1 April
2023) and the value for benefits has
been calculated as per the single figure
table on page 92 (i.e. the benefits for
the year ended 29 January 2023).
No bonus. No LTIP vesting.
Performance in line with expectations
50% of maximum awarded for achieving
target performance (i.e. 62.5% of salary).
60% of maximum award vesting for target
performance (i.e. 90% of salary).
Maximum performance
100% of maximum awarded for achieving
maximum performance (i.e. 125% of
salary).
100% of maximum award vesting for
maximum performance (i.e. 150% of salary).
Maximum performance plus 50%
growth in share price
100% of maximum award vesting for
maximum performance plus 50% growth
in share price (i.e. 225% of salary).
LTIP awards are included in the scenarios above at face value with no share price movement included (except in the “maximum plus 50%” scenario).
Service contracts
Executive directors’ contracts are on a rolling basis and may be terminated on 12 months’ notice by the Company or on 6 months’ notice by the executive director. Service
contracts for new executive directors will generally be limited to 12 months’ notice by the Company.
In line with the Policy approved at the 2014 AGM, service contracts entered into prior to this date provide for a notice period of 12 months except during the six months
following either a takeover of or by the Company or a Company reconstruction. Under these conditions and certain circumstances the executive directors are entitled to
a liquidated damages payment equal to the executive director’s basic salary at termination plus the value of all contractual benefits for a two year period. In the event this
liquidated damages payment is triggered, the executive director will also be deemed to be a “good leaver” for the purposes of the Company’s share schemes. Given the size
of the Company and the sector dynamics at the time the directors were recruited, the Remuneration Committee considered this provision appropriate in order to attract
and retain high calibre executive directors. The Remuneration Committee is cognisant of the fact that these provisions do not reflect best practice. It has therefore previously
considered the alternatives available to exit these contractual arrangements, including contractual buy-out. However, the Remuneration Committee concluded that it was
not feasible to place a value on these rights, in order to remove them from the contracts, which would be acceptable to both parties. It therefore determined that the most
appropriate approach would be to maintain the legacy provisions, however for all future appointments after the approval of the 2014 Policy these provisions have not and will
not apply. S. Lorimer’s service contract does not therefore include the legacy provisions.
Non-executive directors are appointed for an initial period of three years, subject to annual re-election by shareholders in accordance with the Code. Their appointments
are terminable by either the Company or the directors themselves upon three months’ notice without compensation.
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Payments for loss of office
The principles on which the determination of payments for loss of office will be approached are set out below:
Policy
Payment in lieu
of notice
Payments to executive directors upon termination of their service contracts will be equal to 12 months’ base salary or the highest annual salary
earned by the executive during the preceding three years, whichever is higher (plus benefits in kind and pension contributions at the discretion
of the Remuneration Committee).
Annual Bonus
This will be at the discretion of the Remuneration Committee on an individual basis and the decision as to whether or not to award a bonus in
full or in part will be dependent upon a number of factors, including the circumstances of the individual’s departure and their contribution to the
business during the bonus period in question. Any bonus amounts paid will typically be pro-rated for time in service to termination and will,
subject to performance, be paid at the usual time.
Deferred portion of
Annual Bonus
Deferred bonus share awards will normally vest in full at the end of the original deferral period.
LTIP
The extent to which any award under the LTIP will vest would be determined based on the leaver provisions contained within the LTIP rules.
The Remuneration Committee shall determine when awards vest in accordance with those provisions.
Awards will normally lapse if the participant leaves employment before vesting. However, awards may vest in “good leaver” circumstances,
including death, disability, ill-health, injury, sale of the participant’s employer, or any other reason determined by the Remuneration Committee.
Any “good leaver” awards will vest at the date of cessation of employment unless the Remuneration Committee decides they should vest at the
normal vesting date. In either case, the extent to which an award vests will be determined by the Remuneration Committee taking into account
the extent to which the performance conditions have been satisfied and, unless the Remuneration Committee determines otherwise, the
proportion of the performance period that has elapsed to the date of cessation of employment. The Remuneration Committee may vest the
award on any other basis if it believes there are exceptional circumstances which warrant that.
Options are exercisable for six months (12 months in the event of death) from leaving employment or six months (12 months in the event of death)
from the normal vesting date as appropriate.
Change of control
Deferred bonus share awards and awards under the LTIP will generally vest early on a takeover, merger or other corporate reorganisation. The
Remuneration Committee will determine the level of vesting taking account of performance conditions and, unless the Remuneration Committee
determines otherwise, pro-rating for time, where applicable. Alternatively, participants may be allowed or required to exchange their awards for
awards over shares in the acquiring company.
Awards under all-employee share schemes will be expected to vest on a change of control and those which have to meet specific requirements
to benefit from permitted tax benefits will vest in accordance with those requirements.
Mitigation
The executive directors’ service contracts do not provide for any reduction in payments for mitigation or for early payment.
Other payments
Payments may be made under the Company’s all-employee share plans which are governed by HMRC tax-advantaged plan rules and which cover
certain leaver provisions. There is no discretionary treatment of leavers under these plans. In appropriate circumstances, payments may also be
made in respect of accrued holiday, outplacement and legal fees.
Where a buy-out award is made under the Listing Rules then the leaver provisions would be determined at the time of the award.
Directors’ Remuneration Report continued
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The Remuneration Committee reserves the right to make additional exit payments where such payments are made in good faith in discharge of an existing legal obligation
(or by way of damages for breach of such an obligation) or by way of settlement or compromise of any claim arising in connection with the termination of a director’s office
or employment. In doing so, the Remuneration Committee will recognise and balance the interests of shareholders and the departing executive director, as well as the
interests of the remaining directors.
Where the Remuneration Committee retains discretion it will be used to provide flexibility in certain situations, taking into account the particular circumstances of the
director’s departure and performance.
Statement of consideration of employment conditions elsewhere in the Company
The Remuneration Committee generally considers pay and employment conditions elsewhere in the Company when considering the executive directors’ remuneration.
When considering base salary increases, the Remuneration Committee reviews overall levels of base pay increases offered to other employees. Employees are not actively
consulted on directors’ remuneration. The Company has regular contact with union bodies on matters of pay and remuneration for employees covered by collective
bargaining or consultation arrangements.
Existing contractual arrangements
The Remuneration Committee retains discretion to make any remuneration payments and payments for loss of office outside the Policy in this report:
• where the terms of the payment were agreed before the Policy came into effect;
• where the terms of the payment were agreed at a time when the relevant individual was not a director of the Company and, in the opinion of the Remuneration
Committee, the payment was not in consideration of the individual becoming a director of the Company; or
• to satisfy contractual commitments under legacy remuneration arrangements.
For these purposes, the term “payments” includes the satisfaction of awards of variable remuneration and, in relation to an award over shares, the terms of the payment are
agreed at the time the award is granted.
The Remuneration Committee may make minor changes to this Policy which do not have a material advantage to directors, to aid in its operation or implementation, taking
into account the interests of shareholders but without the need to seek shareholder approval.
Statement of consideration of shareholder views
During the year, the Remuneration Committee engaged with shareholders, seeking their comments and feedback on the proposed minor changes to the Remuneration
Policy. The Committee is committed to an ongoing dialogue with shareholders and welcomes feedback on executive and non-executive directors’ remuneration.
Payments in relation to existing remuneration arrangements
The Remuneration Committee reserves the right to make any remuneration payments and/or payments for loss of office (including exercising any discretions available
to it in connection with such payments) notwithstanding that they are not in line with the Remuneration Policy set out above where the terms of the payment were agreed:
i. before the date of the 2014 AGM (the date the Company’s first shareholder-approved Remuneration Policy came into effect);
ii. after the date of the 2014 AGM and before the Remuneration Policy set out above came into effect, provided that the terms of the payment were consistent with the
shareholder-approved Remuneration Policy in force at the time they were agreed; or
iii. at a time when the relevant individual was not a director of the Company and, in the opinion of the Remuneration Committee, the payment was not in consideration for
the individual becoming a director of the Company.
For these purposes “payments” includes the Remuneration Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the
payment are “agreed” at the time the award is granted.
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Directors’ Report
The directors present their report and the audited consolidated financial statements of the Group for the 52 weeks (2022: 53 weeks) ended 29 January 2023.
Strategic Report
The Companies Act 2006 requires the directors to present a review of the business during the year to 29 January 2023 and of the position of the Group at the end of the
financial year, together with a description of the principal risks and uncertainties faced. The Strategic Report can be found on pages 1 to 69 and is incorporated by reference
into this Directors’ Report.
Corporate Governance Statement
The Disclosure Guidance and Transparency Rules require certain information to be included in a corporate governance statement in the Directors’ Report. Information that
fulfils the requirements of the corporate governance statement can be found in the Corporate Governance Report on pages 72 to 84 and is incorporated by reference into
this Directors’ Report.
Results and dividends
The Group’s profit after tax for the financial year ended 29 January 2023 attributable to equity shareholders amounted to £33.9m (2022: £27.8m).
An interim dividend for the current year of 2.50p (2022: 2.00p) per ordinary share was paid on 28 October 2022. As reported in the Annual Report and Accounts for the year
ended 30 January 2022, the Board recommenced dividend payments during the course of that year, with the payment of an interim dividend of 2.00p per ordinary share
and a special dividend of 10.00p per ordinary share, both of which were paid on 29 October 2021. In line with its progressive dividend policy, the Board has proposed a final
dividend of 10.60p (2022 final dividend: 10.00p) per ordinary share, which will be paid on 9 June 2023 if approved at the Company’s annual general meeting on 26 May 2023
(“AGM”). The directors have taken advantage of the exemption available under s408 of the Companies Act 2006 and have not presented an income statement for the Company.
The Company’s profit for the year was £45.0m (2022: £21.4m).
Directors
The following were directors of the Company during the financial year ended 29 January 2023 and to the date of this report:
• J.R. Nicolson (resigned 31 March 2022)
• M. Allen OBE
• R.A. White
• S. Lorimer
• J.D. Kemp
• W.R.G. Barr
• S.V. Barratt
• Z.L. Howorth
• D.J. Ritchie
• N.B.E. Wharton
Subject to the Company’s Articles of Association (the “Articles”) and any relevant legislation, the directors may exercise all of the powers of the Company and may delegate
their power and discretion to committees. The powers of the directors to issue or repurchase ordinary shares are set by resolution at a general meeting of shareholders.
The Company’s Articles provide that the Company may by ordinary resolution appoint any person who is willing to act to be a director, either to fill a vacancy or as an addition
to the existing Board. Mr William Robin Graham Barr will retire from the Board at the AGM and Ms Julie Anne Barr will offer herself for election at the AGM. The Articles also
give the directors power to appoint and remove directors. Under the terms of reference of the Nomination Committee, any appointment must be recommended by the
Nomination Committee for approval by the Board. The Articles require directors to retire and submit themselves for election at the first Annual General Meeting following
appointment and to retire no later than the third Annual General Meeting after the Annual General Meeting at which they were last elected or re-elected. However, in order to
comply with the UK Corporate Governance Code, all directors other than W.R.G. Barr will submit themselves for re-election at the AGM. J.A. Barr will offer herself for election
at the AGM. Biographical details of the Board and J.A. Barr as a proposed director are set out on pages 70 and 71 of this report.
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Strategic Report Corporate Governance Accounts
Directors’ interests
Information regarding the directors’ interests in ordinary shares of the Company is provided in the Directors’ Remuneration Report on page 100. No director has any other
interest in any shares or loan stock of any Group company.
Other than service contracts, no director had a material interest in any contract to which any Group company was a party during the year.
There have been the following changes notified in the directors’ shareholdings between 29 January 2023 and 27 March 2023: an increase in R.A. White’s holding of 82 shares,
an increase in S. Lorimer’s holding of 83 shares and an increase in J.D. Kemp’s holding of 82 shares.
Directors’ indemnity provisions
As at the date of this report, indemnities are in force between the Company and each of its directors under which the Company has agreed to indemnify each director, to the
extent permitted by law, in respect of certain liabilities incurred as a result of carrying out their role as a director of the Company. The directors are also indemnified against
the costs of defending any criminal or civil proceedings or any claim in relation to the Company or brought by a regulator as they are incurred, provided that where the
defence is unsuccessful the director must repay those defence costs to the Company. The Company’s total liability under each indemnity is limited to £5.0m for each event
giving rise to a claim under that indemnity. The indemnities are qualifying third party indemnity provisions for the purposes of the Companies Act 2006. In addition, the
Company maintained a Directors’ and Officers’ liability insurance policy throughout the financial year and has renewed that policy.
As at the date of this report, indemnities are in force between the Company and each of the directors of the corporate trustee of the A.G. BARR p.l.c. (2008) Pension and Life
Assurance Scheme under which the Company has agreed to indemnify each director, to the extent permitted by law, in respect of certain liabilities incurred in connection
with the corporate trustee’s activities as a trustee of such scheme.
Research and development
The Group undertakes research and development activities in order to develop its range of new and existing products. Expenditure during the year on research and
development amounted to £1.4m (2022: £1.3m).
Political donations and political expenditure
No Group company made any political donations or incurred any political expenditure in the year (2022: £nil).
Post balance sheet events
Relevant post balance sheet events requiring disclosure are included in Note 32 to the accounts.
Employee engagement
Information on employee engagement is included in the Corporate Governance Report on pages 78 and 79 and the Strategic Report on page 35.
All qualifying employees are entitled to join the Savings Related Share Option Scheme (“SAYE”) and the All-Employee Share Ownership Plan (“AESOP”). Details of these share
schemes are provided below.
AESOP
The AESOP is HMRC approved and the executive directors participate in both sections of the scheme, which is open to all qualifying employees.
The partnership share element provides that for every two shares a participant purchases in the Company, up to a current maximum contribution of £150 per month, the Company
will purchase one matching share. The matching shares purchased are held in trust in the name of the individual.
There are various rules as to the period of time that the shares must be held in trust but after five years the shares can be released tax free to the participant.
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The free share element allows participants to receive shares to the value of a common percentage of their earnings, related to the performance of the Group. The maximum
value of any annual award is currently £3,600 and the shares awarded are held in trust for five years. Under the terms of the AESOP rules, any award of free shares to
employees is made by the Trustee of the AESOP subject to the Company’s consent.
Under the terms of this scheme, unless they are a “good leaver” the matching shares will be forfeited if the participant leaves the employment of the Company within three
years of the award. All partnership, matching and free shares must be removed from the trust if employment with the Company ceases.
SAYE
The SAYE is HMRC approved and is available to all qualifying employees, including executive directors. It is based on a three year savings contract which provides the
participant with an option to purchase shares after three years at a discounted price fixed at the time the contract is taken out, or earlier as provided by the scheme rules.
No performance conditions require to be met by any participant in order to exercise their option under the SAYE.
Employment of disabled persons
The Company strives to build an inclusive and diverse culture where all employees have the opportunity to succeed. Applications for employment by disabled persons
are always fully and fairly considered. In the event of employees becoming disabled every effort is made to ensure that their employment will continue. The Company is
committed to the fair treatment of people with disabilities regarding recruitment, training, promotion and career development.
Stakeholder engagement – section 172(1) statement
A statement on how the Company has engaged with key stakeholders, including employees, and the impact of that engagement on the Company’s strategy and the principal
decisions taken during the year is set out in the Corporate Governance Report on pages 74 to 80. This statement also summarises how the directors have had regard to the
need to foster the Company’s business relationships with suppliers, customers and others, and the effect of that regard, including on the principal decisions taken during the
year. This statement is incorporated by reference into this Directors’ Report.
Substantial shareholdings
As at 29 January 2023, the Company had been notified under Rule 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules of the following interests in the
Company’s ordinary share capital:
Number of shares % of voting rights Type of holding
Lindsell Train Limited (discretionary clients) 12,287,893 10.96 Indirect
Sanford DeLand Asset Management 5,200,000 4.64 Direct
Caledonia Investments plc 3,279,347 2.92 Direct
The position remains the same as at 27 March 2023 as it did at 29 January 2023.
Directors’ Report continued
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Share capital
As at 29 January 2023 the Company’s issued share capital comprised a single class of ordinary shares of 4 1/6 pence each. All of the Company’s issued ordinary shares are
fully paid up and rank equally in all respects. The rights attaching to the shares are set out in the Articles. Note 28 to the financial statements contains details of the ordinary
share capital.
On a show of hands at a general meeting of the Company every holder of ordinary shares present in person or by proxy and entitled to vote shall have one vote and, on a
poll, every member present in person or by proxy and entitled to vote shall have one vote for every ordinary share held. The Notice of AGM gives full details of deadlines for
exercising voting rights in relation to resolutions to be passed at the AGM. All proxy votes are counted and the numbers for, against or withheld in relation to each resolution
are announced at the AGM and published on the Company’s website after the meeting. Subject to the relevant statutory provisions and the Articles, shareholders are entitled
to a dividend where declared and paid out of profits available for such purposes.
There are no restrictions on the transfer of ordinary shares in the Company other than:
• those which may from time to time be applicable under existing laws and regulations (for example, insider trading laws); and
• pursuant to the Company’s Share Dealing Codes and applicable regulations, whereby directors and certain employees of the Company require approval to deal in the
Company’s ordinary shares and are prohibited from dealing during closed periods.
At 29 January 2023 the Company had authority, pursuant to the shareholders’ resolution of 27 May 2022, to purchase up to 10% of its issued ordinary share capital. This
authority will expire at the conclusion of the 2023 AGM. It is proposed that this authority be renewed at the 2023 AGM, as detailed in the Notice of AGM.
At 29 January 2023 Robert Barr Limited, as trustee of the Savings Related Benefit Trust and the All-Employee Share Ownership Plan Trust (the “RBL Trustee”), held 0.67% of the
issued share capital of the Company in trust for the benefit of the executive directors and employees of the Group. As at 29 January 2023, Equiniti Share Plan Trustees Limited
(the “AESOP Trustee”) held 0.68% of the issued share capital of the Company in trust for participants in the AESOP.
A dividend waiver is in place in respect of the RBL Trustee’s holdings under the Savings Related Benefit Trust. A dividend waiver is in place in respect of shares held by the
AESOP Trustee and the RBL Trustee under the AESOP which have not been appropriated to participants.
The voting rights in relation to the RBL Trustee’s shareholdings are exercised by the RBL Trustee, who may vote or abstain from voting the shares as it sees fit in respect of
shares which are unvested or have not been appropriated to employees.
Under the rules of the AESOP, eligible employees are entitled to acquire shares in the Company. Details of the AESOP are set out above. AESOP shares which have been
appropriated to participants are held in trust for those participants by the AESOP Trustee. Voting rights in respect of shares which have been appropriated to participants are
exercised by the AESOP Trustee on receipt of participants’ instructions. If a participant does not submit an instruction to the AESOP Trustee, no vote is registered in respect
of those shares. In addition, the AESOP Trustee does not vote any unappropriated shares held under the AESOP as surplus assets.
The Executive Share Option Scheme (“ESOS”) was approved by shareholders at the 2010 AGM. Approved Long Term Incentive Plan (“ALTIP”) awards comprising both a
tax-approved option granted under the ESOS and a Long Term Incentive Plan award have been granted to executive directors. ALTIP awards enable the participant and the
Company to benefit from HMRC tax-approved option tax treatment in respect of part of the award, without increasing the pre-tax value delivered to participants. Other than
to enable the grant of ALTIP awards, the Company has not granted awards to executive directors under the ESOS. Details of the ALTIP awards granted to executive directors
are set out on page 106.
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities or on voting rights.
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Change of control
As disclosed in the Directors’ Remuneration Report, under certain conditions the notice period for R.A. White and J.D. Kemp may increase from one year to two years in the
event of a takeover of or by the Company or a Company reconstruction.
All of the Company’s share incentive plans contain provisions relating to a change of control of the Company. The Company’s banking facilities may, at the discretion of the
lender, be repayable upon a change of control.
Articles of association
The Company’s Articles may only be amended by a special resolution at a general meeting of shareholders. No amendments are proposed to be made to the existing Articles
at the 2023 AGM.
Greenhouse gas emissions
Disclosures regarding greenhouse gas emissions required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 are included in the Strategic
Report on pages 51 to 53. This information is incorporated by reference into this Directors’ Report.
Task Force on Climate-Related Financial Disclosures (“TCFD”)
Disclosures consistent with the TCFD’s recommendations are included in the Strategic Report on pages 44 to 53.
Financial risk management
Information on the exposure of the Group to certain financial risks and on the Group’s objectives and policies for managing each of the Group’s main financial risk areas is
detailed in the financial risk management disclosure in Note 26.
Contracts of significance
There were no contracts of significance as defined by Listing Rule 9.8 in existence during the financial year.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 1 to 69.
The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial review on pages 56 to 61.
After making the appropriate enquiries, the directors have concluded that the Group will be able to meet its financial obligations for the foreseeable future and therefore have
a reasonable expectation that the Company and the Group overall have adequate resources to continue in operational existence for the foreseeable future (being at least one
year following the date of approval of this annual report) and, accordingly, consider it appropriate to adopt the going concern basis in preparing the financial statements.
The Company’s viability statement is set out on page 69 of the Strategic Report.
Directors’ statement as to disclosure of information to auditor
So far as each director is aware, there is no relevant audit information (as defined by the Companies Act 2006) of which the Company’s auditor is unaware. Each director has
taken all steps that ought to be taken by a director to make themselves aware of and to establish that the auditor is aware of any relevant audit information.
Directors’ Report continued
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Strategic Report Corporate Governance Accounts
Auditor
The Audit and Risk Committee has responsibility delegated from the Board for making recommendations on the appointment, reappointment, removal and remuneration
of the external auditor.
The auditor, Deloitte LLP, has indicated its willingness to continue in office and a resolution to appoint Deloitte LLP as auditor of the Company and its subsidiaries, and to
authorise the Audit and Risk Committee to fix their remuneration, will be proposed at the 2023 AGM.
Cautionary statement
This report is addressed to the shareholders of A.G. BARR p.l.c. and has been provided solely to provide information to them.
This report is intended to inform the shareholders of the Group’s performance during the yearended 29 January 2023. This report contains forward-looking statements
based on knowledge and information availableto the directors as at the date the report was prepared. These statementsshould be treated with caution due to the inherent
uncertainties underlying any forward-looking information and any statements aboutthe futureoutlook may be influenced by factors that could cause actualoutcomes and
results to be materially different.
Annual General Meeting
The Company’s AGM will be held at 12.00 p.m. on 26 May 2023 at the offices of Ernst & Young LLP, G1 Building, 5 George Square, Glasgow, G2 1DY. The Notice of the AGM
is set out on pages 205 to 218 of this report. A description and explanation of the resolutions to be considered at the 2023 AGM is set out on pages 208 to 210 of this report.
Recommendation to shareholders
The Board considers that all the resolutions to be considered at the AGM are in the best interests of the Company and its shareholders as a whole and unanimously
recommends that you vote in favour of them.
By order of the Board
Julie A. Barr
Company Secretary
28 March 2023
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The directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group financial statements
in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The directors have also chosen to prepare the parent
company financial statements under United Kingdom adopted international accounting standards.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and
parent Company and of the consolidated profit or loss for that period. In preparing each of the Group and parent Company financial statements, International Accounting
Standard 1 requires that directors:
• Properly select and apply accounting policies.
• Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information.
• Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions,
other events and conditions on the Group and parent Company’s financial position and financial performance.
• Make an assessment of the Company’s ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
A copy of the Group and parent Company financial statements has been placed on the Company’s website, www.agbarr.co.uk. The directors are responsible for the
maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Directors’ statement pursuant to the disclosure and transparency rules
Each of the directors, whose names and functions are set out on pages 70 and 71 of this report, confirm that, to the best of their knowledge:
• The financial statements, prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, give a true and
fair view of the assets, liabilities, financial position of the Group and parent Company and of the consolidated profit.
• The Annual Report and Accounts includes a fair review of the development and performance of the business and the position of the Group and the undertakings included
in the consolidation taken as a whole, together with a description of the principal risks and uncertainties faced by the Group.
• They consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess
the Company’s performance, business model and strategy.
By order of the Board
R.A. White
Chief Executive
28 March 2023
S. Lorimer
Finance Director
28 March 2023
Statement of Directors’ Responsibilities
In Respect of the Annual Report and the Financial Statements
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Independent Auditor’s Report to the members of A.G. BARR p.l.c.
Report on the audit of the financial statements
1. Opinion
In our opinion:
• the financial statements of A.G. Barr p.l.c. (the ‘parent company’) and its subsidiaries (the ‘group’) give a true and fair view of the state of the group’s and of the
parent company’s affairs as at 29 January 2023 and of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the consolidated income statement;
• the consolidated statement of comprehensive income;
• the consolidated and parent company statements of financial position;
• the consolidated and parent company statements of changes in equity;
• the consolidated and parent company cash flow statements; and
• the related notes 1 to 32.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted international accounting standards and, as regards
the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. The non-audit services provided to the group and parent company for the year are disclosed in note 3 to the financial statements.
We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the group or the parent company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters The key audit matter that we identified in the current year was:
• Completeness and valuation of brand support discounts and cost accruals.
Materiality The materiality that we used for the group financial statements was £2,175,000 (2022:£2,070,000) which was determined
on the basis of 5% (2022: 5%) of adjusted profit before tax.
Scoping Our full scope and specified audit procedures covered 95% of the Group’s revenue, 98% of the Group’s net assets, and 97%
of the Group’s profit before tax.
Significant changes in our approach Our audit approach is consistent with the prior year with the exception of Funkin Limited, a component which has increased
in scope to full scope in light of its overall contribution to the group.
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Independent Auditor’s Report to the members of A.G. BARR p.l.c. continued
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is appropriate.
Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included:
• Challenging underlying data and considering the impact of economic uncertainty on the assumptions;
• Assessing the integrity of the model used to prepare the forecasts, testing the clerical accuracy of those forecasts, and considering the historical accuracy of the forecasts
prepared by management;
• Assessing headroom in the forecasts (liquidity and covenants);
• Evaluating the financing facilities that are in place during the forecast period including the repayment terms and covenants, and assessing whether these have been
appropriately reflected in the model;
• Assessing the reasonableness of the downside scenarios and sensitivities performed by management; and
• Assessing the appropriateness of the going concern disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant
doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised
for issue.
In relation to the reporting on how the group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
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5.1. Completeness and valuation of brand support discounts and cost accruals
Key audit matter description Brand support discounts and cost accruals within trade and other payables of £12.3m (2022: £18.1m)
The Group incurs significant costs in agreeing sales discounts to support and develop its brands. Estimation is required
in determining the level of variable consideration recognised and the accrual for such sales discounts and costs where
promotions and brand support campaigns span the year-end and where settlement has not been fully agreed at year-end,
or where prior year claims arise, as the year-end accrual can depend on information not yet made available by the customer.
Further details are included within “Key Sources of Estimation Uncertainty” as disclosed in the accounting policies within note
1 to the financial statements.
Due to the high level of estimation involved, we have determined there is a potential for fraud through possible manipulation
of this balance.
Brand support discounts and cost accruals are included within note 22 to the financial statements.
The Audit and Risk Committee’s consideration in respect of the risk is included on page 86.
How the scope of our audit responded to
the key audit matter
The audit procedures we performed in respect of this matter included:
• Obtaining an understanding of and testing the relevant controls over the brand support discounts and cost accruals process;
• Meeting with the commercial teams to understand and challenge the brand support discounts in place, by assessing the
movements in the brand support accrual;
• Testing a sample of customers with characteristics of audit interest (customers receiving material brand support
investment, customers with material open promotions at year end, and flagship UK customers), assessing the accuracy
of current year accruals;
• Performing a stand back assessment on judgements made in the previous year, including examining a sample of accrual
releases and assessing the additional variable consideration recognised;
• Examining a sample of key commercial contracts and joint business plans to assess whether the composition of the
accrual is in line with the underlying commercial agreement;
• Obtaining confirmations directly from customers for a sample of open accruals. In cases where no confirmation reply
is received, we performed alternative procedures involving understanding the basis for the accrual and recalculating the
expected accrual based on related sales information;
• Selecting a sample of settlements and releases made after the year-end to determine the accuracy of the accrual;
• Understand ageing of the accrual and selecting a sample of balances of aged balances; and
• Assessing the appropriateness of the IAS 1 sensitivity disclosures made in the financial statements.
Key observations We concluded that completeness and valuation of brand support discounts and cost accruals were appropriate.
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Independent Auditor’s Report to the members of A.G. BARR p.l.c. continued
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person
would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent company financial statements
Materiality £2.175m (2022: £2.07m) £1.96m (2022: £1.89m)
Basis for determining materiality 5% (2022: 5%) of adjusted profit before tax. Parent company materiality equates to 0.6% (2022: 0.7%) of
revenue, capped at 90% (2022: 90%) of Group materiality.
Rationale for the benchmark applied We have used adjusted profit before tax as the benchmark
for our determination of materiality as we consider this to be
a critical performance measure for the Group on the basis
that it is a key metric to analysts and investors and has equal
prominence in the Annual Report. The adjusted items in the
year are summarised on page 201.
We have used revenue as the benchmark for our
determination of materiality as we consider this to be the
key driver of the business. As statutory materiality would
be higher than component materiality, we have capped
materiality to be 90% of group materiality being £1.96m
(2022: £1.89m). 90% is deemed to be appropriate based
on the company only contribution to the Group.
Group materiality Adjusted profit before tax
Component
materiality range
£0.76m to £1.96m
Audit and Risk
Committee
reporting threshold
£0.11m
Group materiality
£2.18m
Adjusted profit
before tax £43.50m
95%
2%
3%
97%
3%
98%
2% 0%
Revenue
Profit
before tax
Net assets
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6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality
for the financial statements as a whole.
Group financial statements Parent company financial statements
Performance materiality 70% (2022: 70%) of group materiality 70% (2022: 70%) of parent company materiality
Basis and rationale for
determining
performance materiality
In determining performance materiality, we considered the following factors:
• Our risk assessment, including our assessment of the group’s overall control environment and that we considered it appropriate to rely on
controls over a number of business processes.
• Our past experience of the audit, and our consideration of the number of corrected and uncorrected misstatements identified in prior periods.
6.3. Error reporting threshold
We agreed with the Audit and Risk Committee that we would report to the Committee all audit differences in excess of £111,000 (2022: £103,500), as well as differences
below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit and Risk Committee on disclosure matters that we identified
when assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
There are no significant changes in our approach in the current year with the exception of our approach to Funkin Limited, a component which has increased in scope to full
scope in light of its overall contribution to the group. Our group audit was scoped by obtaining an understanding of the Group and its environment through discussions with
finance, IT, commercial and supply teams and performing walkthroughs of processes across these areas, including Group wide controls, and assessing the risks of material
misstatements at a Group level.
For components deemed significant to the group, full scope audit procedures were performed to materiality levels applicable to each component, which was lower than the
group materiality level and ranged from £0.76m to £1.96m (2022: £0.51m to £1.89m). Components deemed significant are as follows:
• A.G. Barr p.l.c.
• Funkin Limited
A.G. Barr p.l.c., is also the entity in which the trading transactions relating to the brand owned by Rubicon Drinks Limited are recorded.
Boost Drinks Limited was subject to specified audit procedures based on the materiality of individual balances, and the remaining non-significant components were subject to
analytical reviews, the group audit team performed all audit work. The other components to the Group are as follows:
• Funkin USA Limited
• A.G. BARR General Partner Limited
• A.G. BARR Capital Partner Limited
• A.G. BARR (Ireland) Limited
• MOMA Foods Limited
Full audit scope Specified audit procedures Review at group level
At the Group level, we also tested the consolidation process. All work on the
significant components and consolidation process was performed by the Group
engagement team.
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7. An overview of the scope of our audit continued
7.2. Our consideration of the control environment
With the involvement of our IT specialist we obtained an understanding of the relevant IT environment and tested relevant general IT controls. We obtained an understanding
of the processes and relevant controls over the key business cycles, being the revenue, brand support accrual business process and the financial reporting cycle. We tested
and took a controls reliance approach on the relevant controls for certain components within the revenue and brand support accrual business process cycles.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial statements.
The Group has assessed the risk and opportunities relevant to climate change and has elevated this risk to a principal risk across the Group. This risk has also been considered
and embedded into the businesses as explained in the Strategic Report on pages 62 to 68.
As a part of our audit, we have obtained management’s climate-related risk assessment and held discussions with those charged with governance to understand the
process of identifying climate-related risks, the determination of mitigating actions and to evaluate the impact on the Group’s financial statements. While management has
acknowledged that the transition and physical risks posed by climate change have the potential to impact the medium to long term success of the business, they have
assessed that there is no material impact arising from climate change on the judgements and estimates made in the financial statements as at 29 January 2023 as explained
in note 1 on page 154.
We performed our own qualitative risk assessment of the potential impact of climate change on the Group’s financial statements. Our procedures include evaluating the
appropriateness of disclosures included in note 1 to the financial statements and reading disclosures included in the Strategic Report to consider whether they are materially
consistent with the financial statements and our knowledge obtained in the audit.
8. Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are
responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.
Independent Auditor’s Report to the members of A.G. BARR p.l.c. continued
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10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the group’s remuneration policies, key drivers for directors’
remuneration, bonus levels and performance targets;
• results of our enquiries of management, internal audit, the directors and the Audit and Risk Committee about their own identification and assessment of the risks of
irregularities, including those that are specific to the group’s sector;
• any matters we identified having obtained and reviewed the group’s documentation of their policies and procedures relating to:
- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
• the matters discussed among the audit engagement team and relevant internal specialists, including valuations, pensions and IT specialists regarding how and where fraud
might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud
in the following areas: completeness and valuation of brand support discount and cost accruals. In common with all audits under ISAs (UK), we are also required to perform
specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the group operates in, focusing on provisions of those laws and regulations that had a direct
effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK
Companies Act, Listing Rules, pensions legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be
fundamental to the group’s ability to operate or to avoid a material penalty. These included the group’s operating licence and environmental regulations.
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11. Extent to which the audit was considered capable of detecting irregularities, including fraud continued
11.2. Audit response to risks identified
As a result of performing the above, we identified completeness and valuation of brand support discounts and cost accruals as a key audit matter related to the potential
risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key
audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described
as having a direct effect on the financial statements;
• enquiring of management, the Audit and Risk Committee and in-house legal counsel concerning actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC;
• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the
judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual
or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert
to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial
statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified any
material misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating
to the group’s compliance with the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent
with the financial statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on
page 126;
• the directors’ explanation as to its assessment of the group’s prospects, the period this assessment covers and why the period is appropriate set out on page 69;
• the directors' statement on fair, balanced and understandable set out on page 128;
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 64 to 68;
• the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages 83 and 84; and
• the section describing the work of the Audit and Risk Committee set out on page 85 to 87.
Independent Auditor’s Report to the members of A.G. BARR p.l.c. continued
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14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not been made or the part of the directors’
remuneration report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit and Risk Committee, we were appointed on 31 May 2017 to audit the financial statements for the year ended 27 January 2018
and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 6 years, covering the years
ending 27 January 2018 to 29 January 2023.
15.2. Consistency of the audit report with the additional report to the Audit and Risk Committee
Our audit opinion is consistent with the additional report to the Audit and Risk Committee we are required to provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial statements form part of the European Single
Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical
Standard (‘ESEF RTS’). This auditor’s report provides no assurance over whether the annual financial report has been prepared using the single electronic format specified
in the ESEF RTS.
David Mitchell CA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Glasgow, United Kingdom
28 March 2023
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Consolidated Income Statement
For the year ended 29 January 2023
Note
2023
£m
2022
£m
Revenue 2 3 1 7. 6 268 .6
Cost of sales (1 89. 5 ) (15 0.0 )
Gross profit
2 1 28. 1 1 18.6
Other income
5 1 .3 0.7
Operating expenses
6 (84. 1 ) (76.6 )
Operating profit 45. 3 42.7
Finance income
7 0.5 –
Finance costs
7 (1 . 4 ) (0.4 )
Share of after tax results of associates
16 – (0. 1 )
Profit before tax 44.4 42. 2
Tax on profit
8 (10. 5 ) (14 .4 )
Profit for the year 33. 9 2 7. 8
Earnings per share (pence)
Basic earnings per share
9 30. 47 25.0 9
Diluted earnings per share
9 30. 22 24 . 9 5
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Statements of Financial Position
As at 29 January 2023
Note
Group Company
2023
£m
2022
£m
2023
£m
2022
£m
Non-current assets
Intangible assets
11 116 . 2 98.6 2.7 3.9
Property, plant and equipment
12 102 . 5 93 . 8 83.3 74.4
Right-of-use assets
13 5.4 4.2 23.0 23.2
Loans and receivables
14 1.5 1 .5 1.5 1.5
Investment in subsidiary undertakings
15 – – 113.6 90.3
Investment in associates
16 0.7 0.7 0.7 0.7
Retirement benefit surplus
27 2.4 – 17.7 15.1
Current assets
Inventories
19 34.7 24 . 2 22.7 21.0
Trade and other receivables
20 60.4 4 4. 3 44.7 37. 2
Derivative financial instruments
14 0.1 – 0.1 –
Current tax asset – 0.3 1.6 2.5
Short-term investments
17 4 0.0 – 40.0 –
Cash and cash equivalents
18 1 3 .6 68 .7 11.5 59.1
Total assets 37 7. 5 336. 3 363.1 328.9
Current liabilities
Loans and other borrowings
21 0.7 0. 3 – –
Trade and other payables
22 72.3 54.0 60.5 59.6
Derivative financial instruments
14 0.1 0. 2 0.1 0.2
Lease liabilities
13, 21 1 .5 1.3 2.9 2.6
Provisions
23 0.8 2.0 0.6 1.8
Current tax liabilities 0.7 – – –
Non-current liabilities
Deferred tax liabilities
25 28. 2 21 .5 11.8 9.1
Lease liabilities
13, 21 3 .6 2.8 18.4 19.3
Put liability
24 – 5.0 – –
Contingent consideration
24 0.8 – 0.8 –
Retirement benefit obligations
27 – 1 .0 – –
Capital and reserves
Share capital
28 4.7 4 .7 4.7 4.7
Share premium account
28 0. 9 0 .9 0.9 0.9
Share options reserve
28 3.4 1 .6 3.3 1.5
Other reserves
28 0. 1 (5.1 ) 0.1 (0.1)
Retained earnings
28 25 9. 7 24 2 . 4 259.0 229.3
Total shareholder equity 268. 8 24 4 . 5 268.0 236.3
Non-controlling interest in equity – 3 .7 – –
Total equity and liabilities 3 7 7. 5 336. 3 363.1 328.9
The Company reported a profit for the financial year ended 29 January 2023 of £45.0m (30 January 2022: £21.4m).
Company Number: SC005653
The financial statements on pages 138 to 198 were approved by the Board of directors and authorised for issue on 28 March 2023 and were signed on its behalf by:
Roger White
Chief Executive
Stuart Lorimer
Finance Director
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Statement of Comprehensive Income
For the year ended 29 January 2023
Note
Group Company
2023
£m
2022
£m
2023
£m
2022
£m
Profit for the year 33. 9 2 7. 8 45.0 21.4
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit pension plans
27 (1 . 5 ) 4.7 (1.5) 4.7
Deferred tax movements on items above
25 0.6 (1. 2 ) 0.6 (1.2)
Deferred tax remeasurement for movement in tax rate
25 – 1.5 – 1.5
Items that will be or have been reclassified to profit or loss
Cash flow hedges:
14
Gains arising during the period 0.2 0.1 0.2 0.1
Deferred tax movements on items above
25 – – – –
Other comprehensive income for the year, net of tax (0.7 ) 5.1 (0.7) 5.1
Total comprehensive income for the year 33. 2 3 2.9 44.3 26.5
Attributable to:
Equity shareholders of the parent Company 33. 2 33.0 44.3 26.5
Non-controlling interests – (0.1 ) – –
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Statement of Changes in Equity
For the year ended 29 January 2023
Group Note
Share
capital
£m
Share
premium
account
£m
Share
options
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interests
£m
Total
£m
At 30 January 2022 4.7 0.9 1 .6 (5 . 1 ) 242. 4 244. 5 3.7 248. 2
Profit for the year – – – – 33. 9 33 .9 – 33. 9
Other comprehensive income – – – 0.2 (0.9 ) (0.7 ) – (0.7 )
Total comprehensive income for the year – – – 0.2 33.0 33 . 2 – 33. 2
Company shares purchased for use by employee benefit trusts
28 – – – – (0 .7 ) (0 .7 ) – (0.7 )
Recognition of share-based payment costs
29 – – 2 .0 – – 2 .0 – 2.0
Transfer of reserve on share award – – (0. 2 ) – 0.2 – – –
Deferred tax on items taken direct to reserves
25 – – – – – – – –
Derecognition of put liability – – – 1.3 (1 . 3 ) – – –
Recognition of liabilities with non-controlling interests – – – 3.7 – 3.7 (3.7 ) –
Dividends paid
10 – – – – (13 .9 ) (1 3. 9 ) – (1 3. 9 )
At 29 January 2023 4.7 0.9 3.4 0. 1 2 59. 7 268. 8 – 268. 8
At 24 January 2021 4.7 0.9 1 .8 (0. 2 ) 2 21 .6 228.8 – 228.8
Profit for the year – – – – 2 7. 9 2 7. 9 (0.1 ) 27. 8
Other comprehensive income – – – 0. 1 5.0 5.1 – 5.1
Total comprehensive income for the year – – – 0. 1 3 2.9 33.0 (0. 1 ) 32.9
Company shares purchased for use by employee benefit trusts
28 – – – – (0. 5 ) (0. 5 ) – (0. 5 )
Recognition of share-based payment costs
29 – – 1.2 – – 1 . 2 – 1 . 2
Transfer of reserve on share award – – (1 .8 ) – 1.8 – – –
Deferred tax on items taken direct to reserves
25 – – 0.4 – – 0.4 – 0.4
Recognition of liabilities with non-controlling interests – – – (5.0 ) – (5 .0 ) 3.8 (1. 2 )
Dividends paid
10 – – – – (1 3 .4 ) (1 3.4 ) – (1 3. 4 )
At 30 January 2022 4.7 0 .9 1 .6 (5.1 ) 24 2 . 4 24 4 . 5 3.7 24 8 . 2
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Statement of Changes in Equity
For the year ended 29 January 2023
Company Note
Share
capital
£m
Share
premium
account
£m
Share
options
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
At 30 January 2022 4.7 0.9 1.5 (0.1) 229.3 236.3
Profit for the year – – – – 45.0 45.0
Other comprehensive income – – – 0.2 (0.9) (0.7)
Total comprehensive income for the year – – – 0.2 44.1 44.3
Company shares purchased for use by employee benefit trusts
28 – – – – (0.7) (0.7)
Recognition of share-based payment costs
29 – – 2.0 – – 2.0
Transfer of reserve on share award – – (0.2) – 0.2 –
Deferred tax on items taken direct to reserves
25 – – – – – –
Dividends paid
10 – – – – (13.9) (13.9)
At 29 January 2023 4.7 0.9 3.3 0.1 259.0 268.0
At 24 January 2021 4.7 0.9 1.7 (0.2) 215.0 222.1
Profit for the year – – – – 21.4 21.4
Other comprehensive income – – – 0.1 5.0 5.1
Total comprehensive income for the year – – – 0.1 26.4 26.5
Company shares purchased for use by employee benefit trusts
28 – – – – (0.5) (0.5)
Recognition of share-based payment costs
29 – – 1.2 – – 1.2
Transfer of reserve on share award – – (1.8) – 1.8 –
Deferred tax on items taken direct to reserves
25 – – 0.4 – – 0.4
Dividends paid
10 – – – – (13.4) (13.4)
At 30 January 2022 4.7 0.9 1.5 (0.1) 229.3 236.3
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Cash Flow Statements
For the year ended 29 January 2023
Note
Group Company
2023
£m
2022
£m
2023
£m
2022
£m
Operating activities
Profit before tax 44.4 42. 2 53.7 31.0
Adjustments for:
Interest and dividends receivable (0.5 ) – (22.5) –
Interest payable 7 1 .4 0.4 0.3 0.4
Contingent consideration 24 0.8 – 0.8 –
Revaluation of put liability (2. 7 ) – – –
Depreciation of property, plant and equipment 3 9. 8 9.9 9.3 9.5
Amortisation of intangible assets 3 1.2 1.3 1.2 1.2
Share-based payment costs 2.0 1. 2 2.0 1.2
Share of results in associates – 0.1 – 0.1
Gain on sale of property, plant and equipment and available for sale assets (1 .0 ) (0.7 ) (1.0) (0.7)
Operating cash flows before movements in working capital 55.4 5 4.4 43.8 42.7
Increase in inventories (4. 5 ) (4. 3 ) (1.7) (4.0)
Increase in receivables (7. 6 ) (5 .6 ) (7.5) (2.8)
Increase in payables 4.3 7. 7 15.7 11.8
Difference between employer pension contributions and amounts recognised in the income statement (4. 9 ) (2.3 ) (4.9) (2.3)
Cash generated by operations 42. 7 49.9 45.4 45.4
Tax paid (6. 8 ) (6. 5 ) (6.8) (6.5)
Net cash from operating activities 35.9 43. 4 38.6 38.9
Investing activities
Acquisition of subsidiary (net of cash acquired) 15 (1 8.6 ) (5.1 ) (23.3) (5.5)
Dividends received – – 8.0 –
Loans made – – (1.8) –
Purchase of property, plant and equipment (14. 6 ) (5. 0 ) (14.6) (4.9)
Proceeds on sale of property, plant and equipment and assets held for sale 1 .6 1 .1 1.6 1.1
Funds placed on fixed term deposit 17 (40.0 ) – (40.0) –
Interest received 0.1 – 0.1 –
Net cash used in investing activities (71 . 5 ) (9. 0 ) (70.0) (9.3)
Financing activities
Acquisition of minority interest 15 (3 .4 ) – – –
Loans made – (0.5 ) – (0.5)
Loans repaid (0. 3 ) – – –
Lease payments (1 .7 ) (1 . 5 ) (1.5) (1.5)
Purchase of Company shares by employee benefit trusts 28 (0. 7 ) (0. 2 ) (0.7) (0.2)
Dividends paid 10 (13. 9 ) (1 3.4 ) (13.9) (13.4)
Interest paid (0.2 ) (0.1 ) (0.1) (0.1)
Net cash used in financing activities (20.2 ) (15. 7 ) (16.2) (15.7)
Net (decrease)/increase in cash and cash equivalents (55.8 ) 18.7 (47.6) 13.9
Cash and cash equivalents at beginning of year 68.7 50.0 59.1 45.2
Cash and cash equivalents at end of year 12.9 68.7 11.5 59.1
Cash and cash equivalents per the Group cash flow statements above comprises cash and cash equivalents per the statement of financial position of £1 3 .6 m, net of bank overdrafts
of £0.7 m for the year ended 29 January 2023. Company only cash and equivalents comprise cash and cash equivalents per the statement of financial position of £11.5m.
Non-cash transactions
During the year the Company received a £14.0m dividend from Rubicon Drinks Limited, another Group company. This was satisfied by way of a dividend in specie using the
intercompany balance due by the Company to Rubicon Drinks Limited.
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Notes to the Accounts continued
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Non-GAAP measures are provided because they are tracked by management to assess the Group’s operating performance and to inform financial, strategic and
operatingdecisions.
Definition of non-GAAP measures used are provided below:
Adjusted earnings per share is a non-GAAP measure calculated by dividing adjusted profit attributable to equity holders by the weighted average number of shares in issue.
Adjusted EBITDA is a non-GAAP measure and is defined as adjusted operating profit before depreciation and amortisation.
Adjusted EBITDA margin is a non-GAAP measure and is calculated as adjusted EBITDA divided by adjusted revenue.
Adjusted operating margin is a non-GAAP measure calculated by dividing adjusted operating profit by adjusted revenue.
Adjusted operating profit is a non-GAAP measure calculated as operating profit after adjusting items.
Adjusted profit before tax is non-GAAP measure calculated as reported profit before tax after adjusting entries as disclosed in the adjusting entries accountingpolicy.
Adjusted revenue is a non-GAAP measure calculated as revenue after adjusting items.
Capital expenditure is a non-GAAP measure and is defined as the purchases of property, plant and equipment, and is disclosed in the property, plant and equipmentnote.
EBITDA is a non-GAAP measure and is defined as operating profit before depreciation and amortisation.
EBITDA margin is a non-GAAP measure and is calculated as EBITDA divided by revenue.
Free cash flow is a non-GAAP measure and is defined as the net cash flow as per the cash flow statement excluding the movements in borrowings, the net cash flow on the
purchase and sale of shares by employee benefit trusts and dividend payments.
Full-year dividend is a non-GAAP measure and is defined as the total dividends declared for the financial year excluding any special dividends.
Gross margin is a non-GAAP measure calculated by dividing gross profit by revenue.
Like-for-like revenue growth is a non-GAAP measured comparing adjusted revenue in the current year to the prior year excluding MOMA and Boost revenues in each year.
Market capitalisation is a non-GAAP measure and is defined as the closing share price at the end of a reporting period multiplied by the number of issued and fully paid
shares of the Company.
Net cash at bank is a non-GAAP measure and is defined as the net of cash and cash equivalents plus short-term investments less loans and other borrowings as shown in the
statement of financial position.
Glossary
200
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Glossary continued
Net funds/(debt) is a non-GAAP measure and is defined as cash and cash equivalents plus short-term investments less lease liabilities and overdrafts.
Operating margin is a non-GAAP measure calculated by dividing operating profit by revenue.
Return on capital employed (ROCE) is a non-GAAP measure and is defined as reported profit before tax as a percentage of invested capital. Invested capital is a non-GAAP
measure defined as period end non-current plus current assets less current liabilities excluding all balances relating to any provisions, financial instruments, interest-bearing
liabilities and cash or cash equivalents.
Revenue growth is a non-GAAP measure calculated as the difference in revenue between two reporting periods divided by the revenue of the earlier reporting period.
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Adjusted Consolidated Income Statements
Year ended 29 January 2023 Year ended 30 January 2022
Reported
£m
MOMA
acquisition
impact
£m
Gain on
sale of
property
£m
Boost
acquisition
fees
£m
Boost
earn-out
£m
Adjusted
£m
Reported
£m
Gain on sale
of property
£m
Extra week
trading
£m
Adjusted
£m
Revenue 317.6 – – – – 317.6 268.6 – (6.8) 261.8
Cost of sales (189.5) – – – – (189.5) (150.0) – 3.7 (146.3)
Gross profit 128.1 – – – – 128.1 118.6 – (3.1) 115.5
Other income 1.3 – (1.3) – – – 0.7 (0.7) – –
Operating expenses (84.1) (2.7) – 1.2 0.8 (84.8) (76.6) – – (76.6)
Operating profit 45.3 (2.7) (1.3) 1.2 0.8 43.3 42.7 (0.7) (3.1) 38.9
Finance income 0.5 – – – – 0.5 – – – –
Finance costs (1.4) 1.1 – – – (0.3) (0.4) – – (0.4)
Share of after tax results of associates – – – – – – (0.1) – – (0.1)
Profit before tax 44.4 (1.6) (1.3) 1.2 0.8 43.5 42.2 (0.7) (3.1) 38.4
Tax on profit (10.5) – – – – (10.5) (14.4) – – (14.4)
Profit for the period 33.9 (1.6) (1.3) 1.2 0.8 33.0 27.8 (0.7) (3.1) 24.0
Adjusting entries:
MOMA acquisition impact – the remeasurement and release of the contingent consideration in respect of MOMA Foods Ltd following the Group’s acquisition of the
remaining 38.2% minority interest in December 2022.
Gain on sale of property – the gain on the disposal of the Newcastle distribution site in the year to 29 January 2023 and Sheffield distribution depot in the year to
30 January 2022.
Boost acquisition fees – the acquisition fees incurred on the successful acquisition of Boost Drinks Holdings Limited.
Boost earn-out – the accrual related to the potential payment of £10m associated with the acquisition of Boost Drinks Holdings Limited earn-out.
Extra week trading – the 12 months to 29 January 2023 was a 52 week period and the year ended 30 January 2022 was a 53 week period. This extra week of trading
is removed for comparative purposes.
Reconciliation of Non-GAAP measures
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Reconciliation of Non-GAAP measures continued
Adjusted Consolidated Income Statements continued
Like-for-like revenue growth £m
Adjusted revenue for year to 29 January 2023 317.6
Less Boost (7.3)
Less MOMA revenue (8.2)
302.1
Adjusted revenue for period to 30 January 2022 261.8
Less MOMA (1.1)
260.7
Movement 41.4
Growth 15.9%
EBITDA
2023
£m
2022
£m
Operating profit reported 45.3 42.7
Depreciation and amortisation 11.0 11.2
EBITDA 56.3 53.9
EBITDA margin
2023
£m
2022
£m
Revenue 317.6 268.6
EBITDA 56.3 53.9
EBITDA margin 17.7% 20.1%
Adjusted EBITDA
2023
£m
2022
£m
Operating profit adjusted 43.3 38.9
Depreciation and amortisation 11.0 11.2
Adjusted EBITDA 54.3 50.1
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Adjusted EBITDA margin
2023
£m
2022
£m
Adjusted revenue 317.6 261.8
Adjusted EBITDA 54.3 50.1
Adjusted EBITDA margin 17.1% 19.1%
Adjusted EPS
2023 2022
Adjusted profit attributable to equity holders of the Company £m 33.0 24.0
Weighted average number of shares in issue 111,258,209 111,187,778
Adjusted EPS (p) 29.66 21.59
Full year dividend
2023
pence
2022
pence
Interim dividend paid 2.5 2.0
Final dividend declared 10.6 10.0
Full year dividend 13.1 12.0
Gross margin reported
2023
£m
2022
£m
Revenue 317.6 268.6
Reported gross profit 128.1 118.6
Gross margin reported 40.3% 44.2%
Net cash at bank
2023
£m
2022
£m
Cash and cash equivalents 13.6 68.7
Short-term investments 40.0 –
Loans and other borrowings (0.7) (0.3)
Net cash at bank 52.9 68.4
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Reconciliation of Non-GAAP measures continued
Operating margin
2023
£m
2022
£m
Revenue 317.6 268.6
Reported operating profit 45.3 42.7
Operating margin 14.3% 15.9%
Adjusted operating margin
2023
£m
2022
£m
Adjusted revenue 317.6 261.8
Adjusted operating profit 43.3 38.9
Adjusted operating margin 13.6% 14.9%
ROCE
2023
£m
2022
£m
Profit before tax 44.4 42.2
Intangible assets 116.2 98.6
Property, plant and equipment 102.5 93.8
Right-of-use assets 5.4 4.2
Investment in associates 0.7 0.7
Inventories 34.7 24.2
Trade and other receivables 60.4 44.3
Current tax (0.7) 0.3
Trade and other payables (72.3) (54.0)
Invested capital 246.9 212.1
ROCE 18.0% 19.9%
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Notice of Annual General Meeting
THE FOLLOWING INFORMATION IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any matter referred to in this report
or as to the action you should take, you should seek your own personal financial advice from: (i) a stockbroker, bank manager, solicitor, accountant or other
independent professional adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom; or (ii) another
appropriately authorised independent financial adviser if you are not resident in the United Kingdom.
If you have sold or otherwise transferred all of your shares in A.G. BARR p.l.c., please pass this report, together with the accompanying documents (except the
accompanying personalised form of proxy), as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other person who arranged the sale
or transfer so they can pass these documents to the person who now holds the shares.
Notice is hereby given that the one hundred and nineteenth Annual General Meeting of A.G. Barr p.l.c. (the “Company”) will be held at the offices of Ernst and Young LLP,
G1 Building, 5 George Square, Glasgow, G2 1DY on Friday 26 May 2023 at 12.00 p.m. to consider and, if thought fit, pass the resolutions set out below. Resolutions 1 to 16
(inclusive) will be proposed as ordinary resolutions and Resolutions 17 and 18 will be proposed as special resolutions. Voting on each of the resolutions will be conducted by
way of a poll.
1. To receive and approve the audited accounts of the group and the Company for the year ended 29 January 2023 together with the directors’ and auditor’s reports thereon.
2. To approve the directors’ remuneration policy set out on pages 107 to 121 of the Company’s annual report and accounts for the year ended 29 January 2023.
3. To receive and approve the annual statement by the chair of the remuneration committee and the directors’ remuneration report as set out on pages 89 to 91 and pages
92 to 106 respectively of the Company’s annual report and accounts for the year ended 29 January 2023.
4. To declare a final dividend of 10.60 pence per ordinary share of 4 1/6 pence for the year ended 29 January 2023.
5. To re-elect Mr Mark Allen OBE as a director of the Company.
6. To re-elect Mr Roger Alexander White as a director of the Company.
7. To re-elect Mr Stuart Lorimer as a director of the Company.
8. To re-elect Mr Jonathan David Kemp as a director of the Company.
9. To re-elect Ms Susan Verity Barratt as a director of the Company.
10. To re-elect Ms Zoe Louise Howorth as a director of the Company.
11. To re-elect Mr David James Ritchie as a director of the Company.
12. To re-elect Mr Nicholas Barry Edward Wharton as a director of the Company.
13. To elect Ms Julie Anne Barr as a director of the Company.
14. To re-appoint Deloitte LLP as the Company’s auditor, to hold office until the conclusion of the next general meeting at which accounts are laid, and to authorise the audit
and risk committee of the board of directors of the Company to fix their remuneration.
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Notice of Annual General Meeting continued
15. THAT the board of directors of the Company (the “Board”) be and it is hereby generally and unconditionally authorised pursuant to and in accordance with section 551
of the Companies Act 2006 (the “2006 Act”) to exercise all the powers of the Company to allot shares in the capital of the Company and to grant rights to subscribe for
or to convert any security into shares in the Company:
(a) up to an aggregate nominal amount of £1,555,956.54; and
(b) up to a further aggregate nominal amount of £1,555,956.54 provided that: (i) they are equity securities (within the meaning of section 560 of the 2006 Act); and (ii) they
are offered by way of a rights issue in favour of the holders of shares (excluding the Company in its capacity as a holder of treasury shares) on the register of members
of the Company on a date fixed by the Board where the equity securities respectively attributable to the interests of such holders are proportionate (as nearly as
practicable) to the respective numbers of shares held by them on that date subject to such exclusions or other arrangements as the Board deems necessary or
expedient to deal with: (i) equity securities representing fractional entitlements; (ii) treasury shares; and/or (iii) legal or practical problems arising in any overseas territory,
the requirements of any regulatory body or any stock exchange or any other matter whatsoever,
provided that this authority shall expire on the earlier of 31 July 2024 and the conclusion of the next annual general meeting of the Company after the passing of this
resolution, save that the Company may before such expiry make an offer or enter into an agreement which would or might require shares to be allotted, or rights to
subscribe for or to convert securities into shares to be granted, after such expiry and the Board may allot shares or grant such rights in pursuance of such an offer or
agreement as if the authority conferred hereby had not expired.
16. THAT:
(a) the A.G. BARR p.l.c. 2023 Long Term Incentive Plan (the “2023 LTIP”) the principal terms of which are summarised in Appendix 1 to this Notice of Annual General
Meeting and the rules of which are produced at the meeting (and, for the purposes of identification, initialled by the Chair) be and hereby is approved and
adopted, and that the directors be authorised to do all acts and things which they may consider necessary or expedient to carry the 2023 LTIP into effect; and
(b) the directors be and are hereby authorised to establish such further plans based on the 2023 LTIP as they consider necessary or desirable but which have been
modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any share made available under such further plans
are treated as counting against any limits on individual or overall participation in the 2023 LTIP.
17. THAT, subject to the passing of Resolution 15 set out in the notice of the annual general meeting of the Company convened for 26 May 2023 (“Resolution 15”), the board
of directors of the Company (the “Board”) be and it is hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the “2006 Act”), to allot
equity securities (within the meaning of section 560 of the 2006 Act) (including the grant of rights to subscribe for, or to convert any securities into, ordinary shares of 4 1/6
pence each in the capital of the Company (“Ordinary Shares”)), wholly for cash either pursuant to the authority conferred on them by Resolution 15 or by way of a sale of
treasury shares (within the meaning of section 560(3) of the 2006 Act) as if section 561(1) of the 2006 Act did not apply to any such allotment or sale, provided that this
power shall be limited to:
(a) the allotment of equity securities, for cash, in connection with a rights issue, open offer or other pre-emptive offer in favour of holders of Ordinary Shares (excluding
the Company in its capacity as a holder of treasury shares) on the register of members of the Company on a date fixed by the Board where the equity securities
respectively attributable to the interests of such holders are proportionate (as nearly as practicable) to the respective numbers of Ordinary Shares held by them on
that date subject to such exclusions or other arrangements in connection with the rights issue, open offer or other offer as the Board deem necessary or expedient
to deal with: (i) equity securities representing fractional entitlements; (ii) treasury shares; and / or (iii) legal or practical problems arising in any overseas territory,
the requirements of any regulatory body or any stock exchange or any other matter whatsoever; and
(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of £466,786.96,
provided that this authority shall expire on the earlier of 31 July 2024 and the conclusion of the next annual general meeting of the Company after the passing of this
resolution, save that the Company may before such expiry make an offer or enter into an agreement which would or might require equity securities to be allotted after
the expiry of this authority and the Board may allot equity securities pursuant to such an offer or agreement as if the authority conferred hereby had not expired.
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18. THAT the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Companies Act 2006 (the “2006 Act”) to make one
or more market purchases (within the meaning of section 693(4) of the 2006 Act) of ordinary shares of 4 1/6 pence each in the capital of the Company (“Ordinary
Shares”), on such terms and in such manner that the directors think fit, provided that:
(a) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased shall be 11,202,887;
(b) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is an amount equal to the higher of: (i) 105% of the average of the middle market
quotations for an Ordinary Share as derived from the London Stock Exchange Daily Official List for the five dealing days immediately preceding the day on which the
Ordinary Share is purchased; and (ii) the higher of the price of the last independent trade and the highest current independent bid for an Ordinary Share on the trading
venue where the purchase is carried out;
(c) the minimum price which may be paid for an Ordinary Share is an amount equal to its nominal value (in each case exclusive of associated expenses);
(d) unless previously renewed, varied or revoked, the authority hereby conferred shall expire on the earlier of 31 July 2024 and the conclusion of the next annual general
meeting of the Company after the passing of this resolution, but a contract to purchase Ordinary Shares may be made before such expiry which will or may be
completed wholly or partly thereafter, and a purchase of Ordinary Shares may be made in pursuance of any such contract; and
(e) an Ordinary Share so purchased shall be cancelled or, if the directors so determine and subject to the provisions of applicable laws or regulations of the Financial
Conduct Authority, held as a treasury share.
By order of the Board
J.A. Barr
Company Secretary
25 April 2023
Registered Office
A.G. BARR p.l.c., Westfield House, 4 Mollins Road, Cumbernauld, G68 9HD. Registered in Scotland SC005653.
Shareholders should also read the notes to this Notice of Annual General Meeting which are set out on pages 211 to 214 of this report. Those notes provide
further information about shareholders’ entitlement to attend, speak and vote at the Annual General Meeting (and their ability to appoint another person
to do so on their behalf).
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Notice of Annual General Meeting continued
Explanatory Notes
The following notes provide an explanation of the resolutions to be considered at the one hundred and nineteenth annual general meeting (the “AGM”) of
A.G.BARR p.l.c. (the “Company”).
The board of directors of the Company (the “Board”) considers that all the resolutions to be considered at the AGM are in the best interests of the Company and its
shareholders as a whole and unanimously recommends that you vote in favour of them.
Resolutions 1 to 16 (inclusive) will be proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be
in favour of the resolution.
Resolutions 17 and 18 will be proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-quarters of the votes cast must be
in favour of the resolution.
Resolution 1 – Receive and approve the reports and accounts
Shareholders are being asked to receive and approve the audited accounts of the group and the Company (as audited by Deloitte LLP) for the year ended 29 January 2023
together with the associated reports of the directors and auditor.
Resolutions 2 and 3 – Directors’ remuneration
The directors’ remuneration report is divided into three parts: the annual statement by the chair of the remuneration committee, the directors’ remuneration policy and the
directors’ remuneration report.
• The annual statement by the chair of the remuneration committee (which is set out on pages 89 to 91 of this report) provides a summary of the directors’ remuneration
policy and the directors’ remuneration report.
• The directors’ remuneration policy (which is set out on pages 107 to 121 of this report) sets out the Company’s future policy on directors’ remuneration.
• The directors’ remuneration report (which is set out on pages 92 to 106 of this report) gives details of the payments and share awards made to the directors in connection
with their and the Company’s performance during the year ended 29 January 2023. It also details how the Company’s policy on directors’ remuneration will be operated
in the coming year.
(i) Resolution 2 invites shareholders to approve the directors’ remuneration policy. This is a binding policy and, after it takes effect, the directors will not be entitled to
remuneration unless such remuneration is consistent with the approved policy or shareholders otherwise approve the remuneration. If Resolution 2 is approved,
the policy will take effect from the conclusion of the AGM. Shareholders will be given a binding vote on the directors’ remuneration policy at least every three years.
(ii) Resolution 3 invites shareholders to approve the annual statement by the chair of the remuneration committee and the directors’ remuneration report (other than the
directors’ remuneration policy) for the year ended 29 January 2023. This resolution is an advisory vote and will not affect the way in which the Company’s remuneration
policy has been implemented. Each year, shareholders will be given an advisory vote on the implementation of the directors’ remuneration policy in relation to the
payments and share awards made to directors during the year under review.
Resolution 4 – Final dividend
Shareholders are being asked to approve a final dividend of 10.60 pence per ordinary share of 4 1/6 pence for the year ended 29 January 2023. If shareholders approve the
recommended final dividend, it will be paid on 9 June 2023 to all shareholders on the Company’s register of members on 12 May 2023.
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Resolutions 5 to 13 inclusive – Re-election and election of directors
The Company’s Articles of Association provide that the Company may by ordinary resolution appoint any person who is willing to act to be a director, either to fill a vacancy
or as an addition to the existing Board. Mr William Robin Graham Barr will retire from the Board at the AGM and Ms Julie Anne Barr will offer herself for election at the AGM.
The Board complies with the provisions of the UK Corporate Governance Code whereby all directors are subject to annual re-election. Accordingly, all directors of the
Company are retiring and, with the exception of Mr William Robin Graham Barr, offering themselves for re-election.
Biographical details of the directors and Ms Julie Anne Barr as a proposed director are set out on pages 70 to 71 of this report. The Board has confirmed that, following formal
performance evaluation, all of the directors continue to perform effectively and demonstrate commitment to their roles. The Board therefore unanimously recommends the
proposed re-election (or election in the case of Ms Julie Anne Barr) of the directors.
Resolution 14 – Re-appointment of auditor
The Company is required to appoint an auditor at each general meeting at which accounts are presented to shareholders and Deloitte LLP have indicated their willingness
to continue in office. Accordingly, shareholders are being asked to approve the re-appointment of Deloitte LLP as auditor of the Company to hold office until the conclusion
of the next general meeting at which accounts are laid before the Company and to authorise the audit and risk committee of the Board to fix their remuneration.
Resolution 15 – Authority to allot shares
The directors may not allot shares in the Company unless authorised to do so by shareholders in the general meeting. Sub-paragraph (a) of Resolution 15, if passed, will
authorise the directors to allot shares having an aggregate nominal value of up to £1,555,956.54, representing approximately one third of the Company’s issued share capital
as at 19 April 2023 (being the latest practicable date prior to the publication of this report). The directors have no present intention to exercise this authority.
In line with guidance issued by the Investment Association, sub-paragraph (b) of Resolution 15, if passed, will authorise the directors to allot additional shares in connection
with a rights issue having an aggregate nominal value of up to £1,555,956.54, representing approximately one third of the Company’s issued share capital as at 19 April 2023
(being the latest practicable date prior to the publication of this report). The directors have no present intention to exercise the authority sought under sub-paragraph (b) of
Resolution 15. However, if such authority is obtained, it will give the Company greater flexibility to allot additional shares for the purpose of a pre-emptive rights issue. This
authority will be used when the directors consider it to be in the best interests of shareholders.
The authorities sought under Resolution 15 will expire on the earlier of 31 July 2024 (being the latest date by which the Company must hold its annual general meeting
in 2024) and the conclusion of the annual general meeting of the Company held in 2024.
Resolution 16 – Adoption of new LTIP
The Board has recommended that the new A.G. BARR p.l.c. 2023 Long Term Incentive Plan (the “2023 LTIP”) be approved and adopted. The 2023 LTIP would replace the
existing A.G. BARR p.l.c. Long Term Incentive Plan 2014 (the “2014 LTIP ”), which was approved by the Company in general meeting on 27 May 2014 and is due to expire in
2024. Given that the Company is seeking approval for a new Directors’ Remuneration Policy at the AGM, the Remuneration Committee has recommended that shareholder
approval is sought this year for the new 2023 LTIP. The 2023 LTIP is based on the 2014 LTIP but has been updated to reflect changes in the proposed Directors’ Remuneration
Policy and developments in market practice.
Resolution 16, which approves the adoption of the 2023 LTIP, is proposed as an ordinary resolution. The principal terms of the 2023 LTIP are summarised in Appendix 1 to this
Notice of Annual General Meeting.
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Notice of Annual General Meeting continued
Resolution 17 – Disapplication of statutory pre-emption rights
If the directors wish to allot new shares for cash, the Companies Act 2006 states that the shares must be offered first to existing shareholders in proportion to their existing
shareholdings. For legal, regulatory and practical reasons, it might not be possible or desirable for shares allotted by means of a pre-emptive offer to be offered to certain
shareholders, particularly those resident overseas. Furthermore, it might, in some circumstances, be in the Company’s interests for the directors to be able to allot some shares
for cash without having to offer them first to existing shareholders. To enable this to be done, shareholders’ statutory pre-emption rights must be disapplied. Accordingly,
Resolution 17, if passed, will empower the directors to allot a limited number of new equity securities without shareholders’ statutory pre-emption rights applying to such
allotment. The authority conferred by Resolution 17 would also cover the sale of treasury shares for cash.
Sub-paragraph (a) of Resolution 17 will, if passed, confer authority on the directors to make any arrangements which may be necessary to deal with any legal, regulatory or
practical problems arising on a rights issue, an open offer or any other pre-emptive offer in favour of ordinary shareholders, for example, by excluding certain overseas
shareholders from such issue or offer.
Sub-paragraph (b) of Resolution 17 will, if passed, disapply shareholders’ statutory pre-emption rights by empowering the directors to allot equity securities for cash on a non
pre-emptive basis but only new equity securities having a maximum aggregate nominal value of £466,786.96, representing approximately 10% of the Company’s issued share
capital as at 19 April 2023 (being the latest practicable date prior to the publication of this report).
The authority sought under Resolution 17 will expire on the earlier of 31 July 2024 (being the latest date by which the Company must hold an annual general meeting in 2024)
and the conclusion of the annual general meeting of the Company held in 2024.
Resolution 18 – Purchase of own shares
The Companies Act 2006 permits a company to purchase its own shares provided the purchase has been authorised by shareholders in general meeting.
Resolution 18, if passed, will give the Company the authority to purchase any of its own issued ordinary shares at a price of not less than an amount equal to the nominal
value of an ordinary share and not more than the higher of: (i) 5% above the average of the middle market quotations of the Company’s ordinary shares as derived from the
London Stock Exchange Daily Official List for the five dealing days before any purchase is made; and (ii) the higher of the last independent trade of an ordinary share and the
highest current independent bid for an ordinary share on the trading venue where the purchase is carried out.
The authority will enable the purchase of up to a maximum of 11,202,887 ordinary shares, representing approximately 10% of the Company’s issued ordinary share capital
as at the date of the AGM, and will expire on the earlier of 31 July 2024 (being the latest date by which the Company must hold an annual general meeting in 2024) and the
conclusion of the annual general meeting of the Company held in 2024.
The directors will only exercise this buy back authority after careful consideration, taking into account market conditions prevailing at the time, other investment opportunities,
appropriate gearing levels and the overall position of the Company. Purchases would be financed out of distributable profits and shares purchased would either be cancelled
(and the number of shares in issue reduced accordingly) or held as treasury shares.
The Company operates two share option schemes under which awards may be satisfied by the allotment or transfer of ordinary shares to a scheme participant. However, in
practice, the Company has always satisfied awards to participants by the transfer of ordinary shares from the trustee of each of the schemes.
As at 19 April 2023 (being the latest practicable date prior to the publication of this report), options had been granted over 1,974,345 ordinary shares (the “Option Shares”)
representing approximately 1.76% of the Company’s issued share capital at that date. If the authority to purchase the Company’s ordinary shares (as described in Resolution 18)
was exercised in full, the Option Shares would have represented approximately 1.95% of the Company’s issued share capital as at 19 April 2023. As at 19 April 2023, the
Company did not hold any treasury shares.
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NOTES
1. Attending the Annual General Meeting in person
If you wish to attend the Annual General Meeting (“AGM”) in person, you should arrive at the venue for the AGM in good time to allow your attendance to be registered. It is
advisable to have some form of identification with you as you may be asked to provide evidence of your identity to the Company’s registrar, Equiniti Limited (the “Registrar”),
prior to being admitted to the AGM.
2. Appointment of a proxy
Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend, speak and vote at the AGM. A proxy need not be a member of the
Company but must attend the AGM to represent a member. To be validly appointed, a proxy must be appointed using the procedures set out in these notes and in the notes
to the accompanying proxy form.
If a member wishes a proxy to speak on their behalf at the AGM, the member will need to appoint their own choice of proxy (not the Chair of the AGM) and give their
instructions directly to them. Such an appointment can be made using the proxy form accompanying this notice of AGM, electronically, through CREST, or through Proxymity.
Members can only appoint more than one proxy where each proxy is appointed to exercise rights attached to different shares. Members cannot appoint more than one proxy
to exercise the rights attached to the same share(s). If a member wishes to appoint more than one proxy, they should contact the Registrar at Equiniti Limited, Aspect House,
Spencer Road, Lancing, BN99 6DA.
A member may instruct their proxy to abstain from voting on a particular resolution to be considered at the AGM by marking the “Withheld” option in relation to that particular
resolution when appointing their proxy. It should be noted that an abstention is not a vote in law and will not be counted in the calculation of the proportion of votes “For” or
“Against” the resolution.
The appointment of a proxy will not prevent a member from attending the AGM and voting in person if he or she wishes.
A person who is not a member of the Company but who has been nominated by a member to enjoy information rights does not have a right to appoint a proxy under the
procedures set out in these notes and should read note 9 below.
3. Appointment of a proxy using a proxy form or electronically
A proxy form for use in connection with the AGM is enclosed. To be valid, any proxy form or other instrument appointing a proxy, together with any power of attorney
or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand by the Registrar at Equiniti
Limited, Aspect House, Spencer Road, Lancing, BN99 6DA, or submitted electronically at www.sharevote.co.uk at least 48 hours before the time of the AGM or any
adjournment of that meeting.
If you do not have a proxy form and believe that you should have one, or you require additional proxy forms, please contact the Registrar at Equiniti Limited, Aspect House,
Spencer Road, Lancing, BN99 6DA.
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Notice of Annual General Meeting continued
4. Appointment of a proxy through CREST
CREST members who wish to appoint a proxy through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual
and by logging on to: www.euroclear.com. CREST personal members or other CREST sponsored members and those CREST members who have appointed (a) voting service
provider(s) should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear UK & International Limited’s specifications, and must contain the information required for such instruction, as described in the
CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy,
must, in order to be valid, be transmitted so as to be received by the Registrar (ID RA19) no later than 48 hours before the time of the AGM or any adjournment of that
meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from
which the Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to a proxy appointed
through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & International Limited does not make available
special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is
the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed (a) voting service
provider(s), to procure that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of
the CREST system by any particular time. In this regard, CREST members and, where applicable, their CREST sponsors or voting system provider(s) are referred to those
sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
5. Appointment of a proxy through Proxymity
If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company and
approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 12.00 p.m. on 24 May 2023 in order to
be considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read
these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.
6. Appointment of a proxy by joint holders
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the purported appointment submitted by the most senior holder will
be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the
first named being the most senior).
7. Corporate representatives
Any corporation which is a member can appoint one or more corporate representatives. Members can only appoint more than one corporate representative where each
corporate representative is appointed to exercise rights attached to different shares. Members cannot appoint more than one corporate representative to exercise the rights
attached to the same share(s).
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8. Entitlement to attend and vote
To be entitled to attend and vote at the AGM (and for the purpose of determining the votes they may cast), members must be registered in the Company’s register of
members at 6.30 p.m. on 24 May 2023 (or, if the AGM is adjourned, at 6.30 p.m. on the day two days prior to the adjourned meeting). Any changes to the Company’s register
of members after the relevant deadline will be disregarded in determining the rights of any person to vote at the AGM.
9. Nominated persons
Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 (the “2006 Act”) to enjoy information rights (a “Nominated
Person”) may, under an agreement between him/her and the member by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as
a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give
instructions to the member as to the exercise of voting rights.
10. Website giving information regarding the AGM
Information regarding the AGM, including information required by section 311A of the 2006 Act, and a copy of this notice of AGM is available from www.agbarr.co.uk.
11. Audit concerns
Members should note that it is possible that, pursuant to requests made by members of the Company under section 527 of the 2006 Act, the Company may be required
to publish on a website a statement setting out any matter relating to: (a) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit)
that are to be laid before the AGM; or (b) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual
accounts and reports were laid in accordance with section 437 of the 2006 Act. The Company may not require the members requesting any such website publication to
pay its expenses in complying with sections 527 or 528 of the 2006 Act. Where the Company is required to place a statement on a website under section 527 of the 2006 Act,
it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt with
at the AGM includes any statement that the Company has been required under section 527 of the 2006 Act to publish on a website.
12. Voting rights
As at 19 April 2023 (being the latest practicable date prior to the publication of this notice), the Company’s issued share capital consisted of 112,028,871 ordinary shares of 4 1/6
pence each, carrying one vote each. As at 19 April 2023, the Company did not hold any treasury shares. Therefore, the total voting rights in the Company as at 19 April 2023
were 112,028,871 votes.
13. Shareholder questions
Shareholders have the right to ask questions related to the business of the meeting. Shareholders can submit questions related to the business of the meeting by email to
agm2023@agbarr.co.uk. Answers to shareholder questions will be sent to individual shareholders as soon as practically possible after the AGM.
14. Voting at the AGM
Shareholders are able to vote in advance of the meeting using their proxy form enclosed. The proxy form covers all resolutions to be proposed at the AGM.
Shareholders are being encouraged to submit their votes as early as possible and by no later than 48 hours before the time of the AGM. Votes can be submitted either by
returning the proxy form in the post (postage is pre-paid), or electronically by following the instructions set out on the proxy form.
Voting on all resolutions at the AGM will be conducted by way of a poll. The results of the poll will be announced to the London Stock Exchange as soon as possible after the
conclusion of the AGM and will be published on our website.
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Notice of Annual General Meeting continued
15. Notification of shareholdings
Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the Chair of the AGM as his/her proxy will need to ensure that
both he/she, and his/her proxy, comply with their respective disclosure obligations under the UK Disclosure Guidance and Transparency Rules.
16. Further questions and communication
Under section 319A of the 2006 Act, the Company must cause to be answered any question relating to the business being dealt with at the AGM put by a member attending
the meeting unless answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, or the answer
has already been given on a website in the form of an answer to a question, or it is undesirable in the interests of the Company or the good order of the meeting that the
question be answered.
Members who have any general queries about the AGM should contact the Company Secretarial Department by email to: companysecretarialdepartment@agbarr.co.uk.
Members may not use any electronic address provided in this report or in any related documents (including the accompanying proxy form) to communicate with the
Company for any purpose other than those expressly stated.
17. Documents available for inspection
The following documents will be available for inspection on the day of the AGM at the offices of Ernst and Young LLP, G1 Building, 5 George Square, Glasgow, G2 1DY from
11.45 a.m. until the conclusion of the AGM:
17.1 copies of the service contracts of the Company’s executive directors;
17.2 copies of the letters of appointment of the Company’s non-executive directors; and
17.3 the draft rules of the A.G. BARR p.l.c. 2023 Long Term Incentive Plan (the “2023 LTIP”) will be available for inspection on the National Storage Mechanism at https://data.
fca.org.uk/#/nsm/nationalstoragemechanism from the date of sending this document. The draft rules of the 2023 LTIP will also be on display at the place of the AGM for
at least 15 minutes before the AGM and during the AGM.
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PRINCIPAL TERMS OF THE 2023 LTIP
The principal terms of the A.G. BARR p.l.c. 2023 Long Term Incentive Plan (the “2023 LTIP”) are summarised below. A copy of the rules of the proposed 2023 LTIP may be
inspected as specified in note 17 to the Notice of Annual General Meeting.
Background and operation
The 2023 LTIP will have a 10-year life-span from the date of adoption (for awards and options to be granted under it).
The Remuneration Committee of the Board of the Company (the “Committee”) will supervise the operation of the 2023 LTIP.
Eligibility
Any employee or executive director of the Company or any of its subsidiaries is eligible if selected by the Committee.
Grant of awards
The Committee may grant awards as conditional share awards or as options (either of these being an “Award”). The Committee anticipates that any such option would usually
have a nil (or nominal) exercise price but may set the exercise price differently.
Awards may be granted within six weeks following the Company’s adoption of the 2023 LTIP, announcement of its results for any period or implementation of a new directors’
remuneration policy. The Committee may also grant Awards at any other time when it considers there are exceptional circumstances which justify the granting of Awards.
Awards may not be granted more than 10 years after the date of adoption of the 2023 LTIP.
Awards are not transferable or pensionable.
Individual limit
Ordinarily, Awards will not be granted to a participant in respect of any financial year under the 2023 LTIP over shares with a market value in excess of 150% of the participant’s
annual base salary. In exceptional circumstances, as determined by the Committee, this limit may be increased to 200% of annual base salary. The limit will not take into
account any dividend equivalents awarded (see below as to “dividend equivalents”). In addition, the limit does not apply to Awards granted to replace elements of remuneration
forfeited by an individual on leaving a previous employment in order to take up employment with a group company.
Vesting of Awards
Awards may be granted subject to performance conditions set by the Committee which will be tested in respect of a performance period. The proposed performance conditions
for Awards to be granted to executive directors of the Company in 2023 are described in the Company’s Directors’ Remuneration Report for the year to 29 January 2023.
A performance period will normally be a period of at least three years. Once the performance period has passed, the extent to which an Award vests will be determined by
the Committee. Ordinarily, awards will vest on the third anniversary of the date of grant, or such earlier date as the Committee shall determine. Vesting may also occur earlier
on certain events such as the individual leaving employment or certain corporate events (as described further under the relevant headings below).
Any performance condition may be amended or substituted if one or more events occur which cause the Committee to consider that an amended or substituted
performance condition would be more appropriate. Any amended or substituted performance condition would not be materially less difficult to satisfy.
Appendix 1
216
A.G. BARR p.l.c. Annual Report and Accounts 2023
The Committee retains discretion to adjust the level of vesting of Awards upwards or downwards if in its opinion the level of vesting resulting from the application of any
applicable performance condition is not a fair and accurate reflection of business performance or the participant’s personal performance or if there are any other factors the
Committee considers would make the level of vesting inappropriate without adjustment.
Awards granted in the form of options will usually be capable of exercise from the date on which they vest until the tenth anniversary of the date of grant (or such earlier date
as the Committee shall determine). Awards may also lapse on certain events such as the individual leaving employment or certain corporate events (as described further
under the relevant headings below).
Dividend equivalents
The Committee may decide that participants will receive additional shares on vesting/exercise which have a value equivalent to the dividends that have been paid on vested
shares over the period from grant until the vesting date.
Holding period post vesting
At its discretion, the Committee may grant Awards subject to a holding period following vesting. The Committee anticipates that a holding period of two years following
vesting will apply to Awards granted to executive directors of the Company under the 2023 LTIP.
In the event of cessation of employment (except where cessation is by reason of death), the participant will normally remain subject to any post-vesting holding requirements.
In the event of a takeover or reconstruction, or if the Committee determines at its absolute discretion, the Awards (and resulting shares) will be released from the holding period.
Cash alternative
The Committee may determine (in its discretion) that participants will receive an amount of cash on the vesting of their Awards which is equivalent to the value of the vested
shares and/or equivalent to the value of any dividend equivalents (rather than satisfying either or both of these in shares).
Leaving employment
Awards will normally lapse upon a participant ceasing to hold employment or be a director within the Company’s group. However, if a participant ceases to be an employee
and/or director (as applicable) because of their death, ill-health, injury, disability, their employing company or the business for which they work being sold out of the Company’s
group or any other reason determined by the Committee in its discretion as being relevant, then their Award may vest if the Committee so decides. The Committee will decide
whether an Award will vest at the date of cessation or will continue and vest on the originally anticipated vesting date. In either case, the number of shares in respect of which
the Award vests will ordinarily be determined taking into account the extent to which any applicable performance condition is satisfied (at termination or the end of the
performance period as appropriate) and, unless the Committee determines otherwise, the proportion of the performance period (or for any Awards granted that are not
subject to performance conditions, the proportion of the relevant vesting period) that has elapsed at the date of termination. The Committee retains discretion in exceptional
circumstances to determine the number of shares in respect of which an Award vests on another basis which it considers reasonable in all the circumstances. If a participant
ceases employment as a “good leaver” after an award granted in the form of an option has vested but before it has been exercised, the option may be exercised in the period
of six months after the participant ceases employment (or 12 months in the event of death).
Corporate events
In the event of a reconstruction or takeover before an Award vests, the Committee will determine the extent to which the Award vests, taking into account the extent to which
any applicable performance condition has been met and, unless the Committee determines otherwise, the proportion of the performance period (or for any Awards granted
that are not subject to performance conditions, the proportion of the relevant vesting period) that has elapsed. Alternatively, the Committee may decide to allow or require
Awards to be replaced by new awards (which are equivalent in the Committee’s opinion) over shares in another company or companies.
Appendix 1 continued
217
Strategic Report Corporate Governance Accounts
Any Award which has not (or to the extent it has not) vested or been replaced on such corporate events will lapse. Any option which has vested but not been exercised
(or to the extent it has not) will lapse at the expiry of the timeframe set by the Committee for the participant to exercise their option or accept a replacement award.
If there is a reconstruction or takeover after an award granted in the form of an option has vested but before it has been exercised, the option may be exercised during the
period set by the Committee.
If a variation to the share capital of the Company, a demerger, special dividend or other similar corporate event occurs, the Committee may adjust Awards in such ways
as it considers appropriate.
Malus
The Committee may decide, at the vesting of an Award or at any time before the vesting date of an Award, that an Award shall be reduced or cancelled or made subject to
additional conditions (including amending performance conditions, performance periods or vesting periods or deferring the vesting date) in the following circumstances:
(i) discovery of a material misstatement resulting in an adjustment in the historical audited accounts of the Company or any group company;
(ii) the assessment of any performance target or condition in respect of an Award was based on error, or inaccurate or misleading information;
(iii) the discovery that any information used to determine the number of shares subject to an Award was based on error, or inaccurate or misleading information;
(iv) action or conduct of a participant which, in the reasonable opinion of the Committee, amounts to fraud or gross misconduct;
(v) events or the behaviour of a participant have led to the censure of a group company by a regulatory authority or have had a significant detrimental impact on the
reputation of any group company provided that the Committee is satisfied that the relevant participant was responsible for the censure or reputational damage and that
the censure or reputational damage is attributable to them;
(vi) a material failure of risk management of the Company, a group company or a business unit of the group provided that the Committee is satisfied that the relevant
participant was responsible; and/or
(vii) the Company or any group company or business of the group becomes insolvent or otherwise suffers a corporate failure so that the value of shares is materially reduced
provided that the Committee determines following an appropriate review of accountability that the participant should be held responsible (in whole or in part) for that
insolvency or corporate failure.
Clawback
The Committee may apply clawback to all or part of a participant’s Award in substantially the same circumstances as apply to malus (as described above) during the period of
two years following the vesting of an Award. Clawback may be effected, among other means, by requiring the transfer of shares, payment of cash or reduction of Awards.
Overall 2023 LTIP limits
The 2023 LTIP may operate over newly issued ordinary shares, treasury shares or ordinary shares purchased in the market or transferred from one of the Company’s
employee benefit trusts.
The 2023 LTIP shall be operated so that, in any 10 year period, the Company does not issue (or grant options or other rights to be issued with) shares which (ignoring any
options or rights which have lapsed) exceed (i) 10% of the issued ordinary share capital of the Company under the 2023 LTIP and all employee share plans operated by the
Company; or (ii) 5% of the issued ordinary share capital of the Company under the 2023 LTIP and any other discretionary share plan adopted by the Company. For these
purposes, treasury shares shall be counted as newly issued when they are transferred from treasury for so long as the Committee considers it best practice to do so.
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A.G. BARR p.l.c. Annual Report and Accounts 2023
Participants’ rights
Awards will not confer any shareholder rights until the Awards have vested (and in the case of options been exercised) and the participants have received their shares.
Neither the grant of an Award nor vesting of it will confer any entitlement to dividend equivalents (as this is at the Committee’s discretion).
Amendments to the 2023 LTIP
The Committee may, in its discretion, amend the rules of the 2023 LTIP in any way. Amendments may not normally adversely affect the rights of participants except where
participants are notified of such amendment and the majority of participants affected by the change approve such amendment.
Shareholders in general meeting must approve proposed changes which are to the advantage of participants and which relate to eligibility, individual and plan limits, the basis
for determining a participant’s entitlement to and the terms of shares provided under the 2023 LTIP, the adjustments that may be made on a variation of share capital and the
rule in the 2023 LTIP requiring shareholder approval for amendments.
The Committee may, however, without shareholder approval, make minor changes to the advantage of participants which benefit the administration of the plan, to comply
with or take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment of any group company or any participant.
The Board may, at any time, establish further plans based on the 2023 LTIP for overseas territories but modified to take account of local tax, exchange control or securities
laws. Any shares made available under such further overseas plans must be treated as counting against the limits on individual and overall participation under the 2023 LTIP.
The Committee has discretion to terminate the 2023 LTIP at any time, without prejudice to subsisting Awards.
Appendix 1 continued
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A.G. BARR p.l.c.
Westfield House
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Registered Office
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G68 9HD
Company Secretary
Julie A. Barr,
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M.B.A.
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