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Rupert Soames, OBE
Deepak Nath, PhD
Anne-Fran\u00e7oise Nesmes
Chair
Chief Executive O\ufb03cer
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Basis of preparation
Smith & Nephew plc (the \u201cCompany\u201d) is a public limited company incorporated in England and Wales. In these accounts, the \u2018Group\u2019
means the Company and all its subsidiaries. The principal activities of the Group are to develop, manufacture, market and sell medical
devices and services.
The Group has prepared its accounts in accordance with UK-adopted International Accounting Standards. The Group has also prepared
its accounts in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) e\ufb00ective
as at 31 December 2023. IFRS as adopted in the UK di\ufb00ers in certain respects from IFRS Accounting Standards as issued by the IASB.
However, the di\ufb00erences have no impact for the periods presented.
The preparation of accounts in conformity with IFRS requires management to use estimates and assumptions that a\ufb00ect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the accounts and the reported amounts
of revenues and expenses during the year. The accounting policies requiring management to use signi\ufb01cant estimates and assumptions
are: valuation of inventories, liability provisions and impairment. These are discussed in Note 1.2 below. Although these estimates are
based on management\u2019s best knowledge of current events and actions, actual results ultimately may di\ufb00er from those estimates.
Estimates and\u00a0underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The uncertainties as to the future impact on the \ufb01nancial performance and cash \ufb02ows of the Group as a result of the current challenging
economic environment have been considered as part of the Group\u2019s adoption of the going concern basis in these \ufb01nancial statements,
in\u00a0which context the Directors reviewed cash \ufb02ow forecasts prepared for a period of at least 12 months from the date of approval
of\u00a0these \ufb01nancial statements. Having carefully reviewed those forecasts, the Directors concluded that it was appropriate to\u00a0adopt
the\u00a0going concern basis of accounting in preparing these \ufb01nancial statements for the reasons set out below.
The Group had access to $300m of cash and cash equivalents at 31 December 2023. The Group\u2019s net debt, excluding lease liabilities,
at 31 December 2023 was $2,577m with access to committed facilities of $3.6bn with an average maturity of 5.2 years. At the date
of\u00a0approving these \ufb01nancial statements the funding position of the Group has remained unchanged and the cash position is\u00a0not
materially di\ufb00erent.
The Group has $405m of private placement debt due for repayment in 2024. $1,030m of private placement debt is subject to \ufb01nancial
covenants. The principal covenant on the private placement debt is a leverage ratio of <3.5 which is measured on a rolling 12-month
basis at half year and year end. There are no \ufb01nancial covenants in any of the Group\u2019s other facilities.
The Directors have considered various scenarios in assessing the impact of the economic environment on future \ufb01nancial performance
and\u00a0cash \ufb02ows, with the key judgement applied being the speed and sustainability of the return to a normal volume of elective
procedures in key markets, including the impact of a signi\ufb01cant global economic recession, leading to lower healthcare spending
across\u00a0both public and private systems. Throughout these scenarios, which include a severe but plausible outcome, the Group
continues\u00a0to have headroom on its borrowing facilities and \ufb01nancial covenants.
The Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks,
have\u00a0su\ufb03cient funds to continue to meet their liabilities as they fall due and to continue in operational existence for a period of at
least\u00a012 months from the date of the approval of these \ufb01nancial statements. The \ufb01nancial statements have therefore been prepared
on\u00a0a\u00a0going\u00a0concern basis.
Accordingly, the Directors continue to adopt the going concern basis (in accordance with the guidance \u2018Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting\u2019 issued by the FRC) in preparing these \ufb01nancial statements.
New accounting standards e\ufb00ective 2023
A number of new amendments to standards are e\ufb00ective from 1 January 2023 but they do not have a material e\ufb00ect on the Group\u2019s
\ufb01nancial statements except for Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendment to IAS 12,
which the Group has adopted. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give
rise to equal and o\ufb00setting temporary di\ufb00erences such as leases.
The Group previously accounted for deferred tax on leases where the deferred tax asset or liability was recognised on a net basis.
Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets. However, there is no impact on the balance sheet because the balances qualify for o\ufb00set
under paragraph 74 of IAS 12. There was also no impact on the opening retained earnings as at 1 January 2023 as a result of the change.
The policy for recognising and measuring income taxes is consistent with that applied in the comparative years except for the changes
outlined above as a result of the Group\u2019s adoption of the amendments to IAS 12. The change in accounting policy will also be re\ufb02ected
in\u00a0the Group\u2019s consolidated \ufb01nancial statements for the year ending 31 December 2023.
Accounting standards issued but not yet e\ufb00ective
A number of new standards and amendments to standards are e\ufb00ective for annual periods beginning a\ufb05er 1 January 2024 and earlier
application is permitted; however, the Group has not adopted them early in preparing these Financial Statements.
The Group is adopting the mandatory temporary exception from the recognition and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model rules which will take e\ufb00ect for the Group from 1 January 2024.
1.1
Consolidation
The Group accounts include the accounts of Smith & Nephew plc and its subsidiaries for the periods during which they were members
of\u00a0the Group.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns
from\u00a0its involvement with the entity and has the ability to a\ufb00ect those returns through its power over the entity. Subsidiaries are
consolidated in the Group accounts from the date that the Group obtains control and continue to be consolidated until the date
that such control ceases. Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated on consolidation. All\u00a0subsidiaries have year ends which are coterminous with the Group\u2019s, with the
exception\u00a0of jurisdictions whereby a di\ufb00erent year end is required by local legislation.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary and any related components
of\u00a0equity. Any resulting gain or loss is recognised in pro\ufb01t or loss. Any retained interest in the former subsidiary is measured at fair value.
1.2
Critical judgements and estimates
The Group prepares its consolidated \ufb01nancial statements in accordance with IFRS Accounting Standards as issued by the IASB and IFRS
adopted in the UK, the application of which o\ufb05en requires judgements and estimates to\u00a0be made by management when formulating the
Group\u2019s \ufb01nancial position and results. Under IFRS, the Directors are required to adopt those accounting policies most appropriate to the
Group\u2019s\u00a0circumstances for the purpose of presenting fairly the Group\u2019s \ufb01nancial position, \ufb01nancial performance and cash \ufb02ows.
The Group\u2019s accounting policies do not include any critical judgements. The Group\u2019s accounting policies are set out in Notes 1\u201323
of\u00a0the\u00a0Notes to the Group accounts. Of those, the policies which require the most use of management\u2019s estimation are outlined below.
The critical estimates are consistent with 31 December 2022. Management have considered the impact of the uncertainties around
the\u00a0current challenging economic environment below.
Valuation of inventories
A feature of the Orthopaedics business unit (which accounts for approximately 66% of the Group\u2019s total inventory and approximately
82% of the total provision for excess and obsolete inventory) is the high level of\u00a0product inventory required, some of which is located
at customer premises and is available for customers\u2019 immediate use. Complete sets of products, including large and small sizes, have
to be made available in this way. These sizes are used less frequently than standard sizes and towards the end of the product life cycle
are inevitably in excess of requirements. Adjustments to carrying value are therefore required to be made to orthopaedic inventory to
anticipate this situation. These adjustments are calculated in accordance with a formula based on levels of inventory compared with
historical usage. This formula is applied on an individual product line basis and typically is \ufb01rst applied when a product group has been
on the market for two years. This method of calculation is considered appropriate based on experience, but it does require management
estimate in respect of customer demand, e\ufb00ectiveness of inventory deployment, length of product lives and phase-out of old products.
See Note 12 for further details.
Current economic environment impact assessment: In assessing the increase in provision for excess and obsolete inventory,
management have considered the impact of higher input cost in\ufb02ation on increased inventory levels. Management have not changed
their\u00a0accounting policy since 31 December 2022, nor is a change in the key assumptions underlying the methodology expected in
the next 12 months. Primarily due to inventory growth, the provision has increased from $504m at 31 December 2022 to $544m
at 31 December 2023. The provision for excess and obsolete inventory is not considered to have a range of potential outcomes that
is signi\ufb01cantly di\ufb00erent to the $544m at 31 December 2023 in the next 12 months. The provision has a high degree of estimation
uncertainty given the range of products and sizes, with a potential range of reasonable outcomes that could be material over the
longer term.
Liability provisioning
The recognition of provisions for legal disputes related to metal-on-metal cases is subject to a signi\ufb01cant degree of estimation.
Provision is made for loss contingencies when it is considered probable that an adverse outcome will occur and the amount of
the\u00a0loss\u00a0can be reasonably estimated. In making its estimates, management takes into account the advice of internal and external
legal\u00a0counsel. Provisions are reviewed regularly and amounts updated where necessary to re\ufb02ect developments in the disputes.
The value of provisions may require future adjustment if experience such as number, nature or value of claims or settlements changes.
Such a change may be material in 2024 or therea\ufb05er. The ultimate liability may di\ufb00er from the amount provided depending on the
outcome of court proceedings and settlement negotiations or if investigations bring to light new facts. See Note 17 for further details.
Current economic environment impact assessment: Management considered whether there had been any changes to the number
and\u00a0value of claims due\u00a0to current challenging economic environment and to date have not identi\ufb01ed any signi\ufb01cant changes in trends.
If the\u00a0experience changes in the future, the value of provisions may\u00a0require adjustment.
Impairment
In carrying out impairment reviews of intangible assets and goodwill, a number of signi\ufb01cant assumptions have to be made when
preparing cash \ufb02ow projections. These include the future rate of market growth, discount rates, the market demand for the products
acquired, the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory
approvals. If actual results should di\ufb00er or changes in expectations arise, impairment charges may be required which would adversely
impact operating results. There has been an increase in the level of headroom in relation to goodwill impairment testing for the
Orthopaedics CGU which is still sensitive to a reasonably possible change in assumptions. In 2023, the Group impaired $84m of
goodwill and $37m of intangible assets related to Engage as a result of\u00a0the impairment reviews undertaken for the voluntary product
discontinuation. For other intangible assets and goodwill CGUs, this critical estimate is not considered to have a signi\ufb01cant risk of
material adjustment in 2024 or therea\ufb05er based on sensitivity analyses undertaken (as outlined below). See Notes 8 and 9 for
further details on impairment reviews.
Current economic environment impact assessment: Management have assessed the non-current assets held by the Group at
31 December 2023 to identify any indicators of impairment as a result of current economic environment. Where an impairment
indicator\u00a0has arisen, impairment reviews have been undertaken by comparing the expected recoverable value of the asset to the
carrying value of the asset. The recoverable amounts are based on cash \ufb02ow projections using the Group\u2019s base case scenario
in\u00a0its\u00a0going\u00a0concern models, which was reviewed and approved by the Board.
1.3
Climate change considerations
The impact of climate change has been considered as part of the assessment of estimates and judgements in preparing the
Group\u00a0accounts. The climate change scenario analyses undertaken this year in line with TCFD recommendations did not identify
any\u00a0material \ufb01nancial impact. The following considerations were made in respect of the \ufb01nancial statements:
\u2013
The impact of climate change on the going concern assessment and the viability of the Group over the next three years.
\u2013
The impact of climate change on the cash \ufb02ow forecasts used in the impairment assessments of non-current assets
including goodwill.
\u2013
The impact of climate change on the carrying value and useful economic lives of property, plant and equipment.
1.4
Foreign currencies
Functional and presentation currency
The Group accounts are presented in US Dollars. The Company\u2019s functional currency is US Dollars.
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group companies at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional
currency at\u00a0the exchange rate as at\u00a0the reporting date. Non-monetary items are not retranslated.
Foreign operations
Balance sheet items of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into US
Dollars on consolidation at the exchange rates at the reporting date. Income statement items and the cash \ufb02ows of foreign operations
are translated at\u00a0average\u00a0rates as an approximation to actual transaction rates, with actual transaction rates used for large
one-o\ufb00 transactions.
Foreign currency di\ufb00erences are recognised in \u2018Other comprehensive income\u2019 and accumulated in \u2018Other reserves\u2019 within equity.
These include: exchange di\ufb00erences on the translation at closing rates of exchange of non-US Dollar opening net assets; the di\ufb00erences
arising between the translation of pro\ufb01ts into US Dollars at actual (or\u00a0average, as an approximation) and closing exchange rates; to the
extent that the hedging relationship is e\ufb00ective, the di\ufb00erence on translation of foreign currency borrowings or swaps that are used
to\u00a0\ufb01nance or hedge the Group\u2019s net investments in foreign operations; and the movement in the fair value of forward foreign exchange
contracts used to hedge forecast foreign exchange cash \ufb02ows.
The exchange rates used for the translation of currencies into US Dollars that have the most signi\ufb01cant impact on the Group results were:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
2021
Average rates
\u00a0 \u00a0 \u00a0
Sterling
1.24
1.23
1.38
Euro
1.08
1.05
1.18
Swiss Franc
1.11
1.05
1.09
Year end rates
\u00a0 \u00a0 \u00a0
Sterling
1.27
1.21
1.35
Euro
1.10
1.07
1.13
Swiss Franc
1.19
1.08
1.10
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23011": { "value": "Smith & Nephew plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23012": { "value": "public limited company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23013": { "value": "England and Wales", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23014": { "value": "England and Wales", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23016": { "value": "develop, manufacture, market and sell medical devices and services.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23020": { "value": "The Group has prepared its accounts in accordance with UK-adopted International Accounting Standards. The Group has also prepared
its accounts in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) e\ufb00ective
as at 31 December 2023. IFRS as adopted in the UK di\ufb00ers in certain respects from IFRS Accounting Standards as issued by the IASB.
However, the di\ufb00erences have no impact for the periods presented.", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23033": { "value": "The uncertainties as to the future impact on the \ufb01nancial performance and cash \ufb02ows of the Group as a result of the current challenging
economic environment have been considered as part of the Group\u2019s adoption of the going concern basis in these \ufb01nancial statements,
in\u00a0which context the Directors reviewed cash \ufb02ow forecasts prepared for a period of at least 12 months from the date of approval
of\u00a0these \ufb01nancial statements. Having carefully reviewed those forecasts, the Directors concluded that it was appropriate to\u00a0adopt
the\u00a0going concern basis of accounting in preparing these \ufb01nancial statements for the reasons set out below.
The Group had access to $300m of cash and cash equivalents at 31 December 2023. The Group\u2019s net debt, excluding lease liabilities,
at 31 December 2023 was $2,577m with access to committed facilities of $3.6bn with an average maturity of 5.2 years. At the date
of\u00a0approving these \ufb01nancial statements the funding position of the Group has remained unchanged and the cash position is\u00a0not
materially di\ufb00erent.
The Group has $405m of private placement debt due for repayment in 2024. $1,030m of private placement debt is subject to \ufb01nancial
covenants. The principal covenant on the private placement debt is a leverage ratio of <3.5 which is measured on a rolling 12-month
basis at half year and year end. There are no \ufb01nancial covenants in any of the Group\u2019s other facilities.
The Directors have considered various scenarios in assessing the impact of the economic environment on future \ufb01nancial performance
and\u00a0cash \ufb02ows, with the key judgement applied being the speed and sustainability of the return to a normal volume of elective
procedures in key markets, including the impact of a signi\ufb01cant global economic recession, leading to lower healthcare spending
across\u00a0both public and private systems. Throughout these scenarios, which include a severe but plausible outcome, the Group
continues\u00a0to have headroom on its borrowing facilities and \ufb01nancial covenants.
The Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks,
have\u00a0su\ufb03cient funds to continue to meet their liabilities as they fall due and to continue in operational existence for a period of at
least\u00a012 months from the date of the approval of these \ufb01nancial statements. The \ufb01nancial statements have therefore been prepared
on\u00a0a\u00a0going\u00a0concern basis.
Accordingly, the Directors continue to adopt the going concern basis (in accordance with the guidance \u2018Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting\u2019 issued by the FRC) in preparing these \ufb01nancial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23059": { "value": "New accounting standards e\ufb00ective 2023
A number of new amendments to standards are e\ufb00ective from 1 January 2023 but they do not have a material e\ufb00ect on the Group\u2019s
\ufb01nancial statements except for Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendment to IAS 12,
which the Group has adopted. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give
rise to equal and o\ufb00setting temporary di\ufb00erences such as leases.
The Group previously accounted for deferred tax on leases where the deferred tax asset or liability was recognised on a net basis.
Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets. However, there is no impact on the balance sheet because the balances qualify for o\ufb00set
under paragraph 74 of IAS 12. There was also no impact on the opening retained earnings as at 1 January 2023 as a result of the change.
The policy for recognising and measuring income taxes is consistent with that applied in the comparative years except for the changes
outlined above as a result of the Group\u2019s adoption of the amendments to IAS 12. The change in accounting policy will also be re\ufb02ected
in\u00a0the Group\u2019s consolidated \ufb01nancial statements for the year ending 31 December 2023.Accounting standards issued but not yet e\ufb00ective
A number of new standards and amendments to standards are e\ufb00ective for annual periods beginning a\ufb05er 1 January 2024 and earlier
application is permitted; however, the Group has not adopted them early in preparing these Financial Statements.
The Group is adopting the mandatory temporary exception from the recognition and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model rules which will take e\ufb00ect for the Group from 1 January 2024.", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23073": { "value": "2023-12-31", "dimensions": { "concept": "ifrs-full:DateOfEndOfReportingPeriod2013", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23118": { "value": "1.1
Consolidation
The Group accounts include the accounts of Smith & Nephew plc and its subsidiaries for the periods during which they were members
of\u00a0the Group.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns
from\u00a0its involvement with the entity and has the ability to a\ufb00ect those returns through its power over the entity. Subsidiaries are
consolidated in the Group accounts from the date that the Group obtains control and continue to be consolidated until the date
that such control ceases. Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated on consolidation. All\u00a0subsidiaries have year ends which are coterminous with the Group\u2019s, with the
exception\u00a0of jurisdictions whereby a di\ufb00erent year end is required by local legislation.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary and any related components
of\u00a0equity. Any resulting gain or loss is recognised in pro\ufb01t or loss. Any retained interest in the former subsidiary is measured at fair value.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23133": { "value": "1.2
Critical judgements and estimates
The Group prepares its consolidated \ufb01nancial statements in accordance with IFRS Accounting Standards as issued by the IASB and IFRS
adopted in the UK, the application of which o\ufb05en requires judgements and estimates to\u00a0be made by management when formulating the
Group\u2019s \ufb01nancial position and results. Under IFRS, the Directors are required to adopt those accounting policies most appropriate to the
Group\u2019s\u00a0circumstances for the purpose of presenting fairly the Group\u2019s \ufb01nancial position, \ufb01nancial performance and cash \ufb02ows.
The Group\u2019s accounting policies do not include any critical judgements. The Group\u2019s accounting policies are set out in Notes 1\u201323
of\u00a0the\u00a0Notes to the Group accounts. Of those, the policies which require the most use of management\u2019s estimation are outlined below.
The critical estimates are consistent with 31 December 2022. Management have considered the impact of the uncertainties around
the\u00a0current challenging economic environment below.
Valuation of inventories
A feature of the Orthopaedics business unit (which accounts for approximately 66% of the Group\u2019s total inventory and approximately
82% of the total provision for excess and obsolete inventory) is the high level of\u00a0product inventory required, some of which is located
at customer premises and is available for customers\u2019 immediate use. Complete sets of products, including large and small sizes, have
to be made available in this way. These sizes are used less frequently than standard sizes and towards the end of the product life cycle
are inevitably in excess of requirements. Adjustments to carrying value are therefore required to be made to orthopaedic inventory to
anticipate this situation. These adjustments are calculated in accordance with a formula based on levels of inventory compared with
historical usage. This formula is applied on an individual product line basis and typically is \ufb01rst applied when a product group has been
on the market for two years. This method of calculation is considered appropriate based on experience, but it does require management
estimate in respect of customer demand, e\ufb00ectiveness of inventory deployment, length of product lives and phase-out of old products.
See Note 12 for further details.
Current economic environment impact assessment: In assessing the increase in provision for excess and obsolete inventory,
management have considered the impact of higher input cost in\ufb02ation on increased inventory levels. Management have not changed
their\u00a0accounting policy since 31 December 2022, nor is a change in the key assumptions underlying the methodology expected in
the next 12 months. Primarily due to inventory growth, the provision has increased from $504m at 31 December 2022 to $544m
at 31 December 2023. The provision for excess and obsolete inventory is not considered to have a range of potential outcomes that
is signi\ufb01cantly di\ufb00erent to the $544m at 31 December 2023 in the next 12 months. The provision has a high degree of estimation
uncertainty given the range of products and sizes, with a potential range of reasonable outcomes that could be material over the
longer term.
Liability provisioning
The recognition of provisions for legal disputes related to metal-on-metal cases is subject to a signi\ufb01cant degree of estimation.
Provision is made for loss contingencies when it is considered probable that an adverse outcome will occur and the amount of
the\u00a0loss\u00a0can be reasonably estimated. In making its estimates, management takes into account the advice of internal and external
legal\u00a0counsel. Provisions are reviewed regularly and amounts updated where necessary to re\ufb02ect developments in the disputes.
The value of provisions may require future adjustment if experience such as number, nature or value of claims or settlements changes.
Such a change may be material in 2024 or therea\ufb05er. The ultimate liability may di\ufb00er from the amount provided depending on the
outcome of court proceedings and settlement negotiations or if investigations bring to light new facts. See Note 17 for further details.
Current economic environment impact assessment: Management considered whether there had been any changes to the number
and\u00a0value of claims due\u00a0to current challenging economic environment and to date have not identi\ufb01ed any signi\ufb01cant changes in trends.
If the\u00a0experience changes in the future, the value of provisions may\u00a0require adjustment.
Impairment
In carrying out impairment reviews of intangible assets and goodwill, a number of signi\ufb01cant assumptions have to be made when
preparing cash \ufb02ow projections. These include the future rate of market growth, discount rates, the market demand for the products
acquired, the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory
approvals. If actual results should di\ufb00er or changes in expectations arise, impairment charges may be required which would adversely
impact operating results. There has been an increase in the level of headroom in relation to goodwill impairment testing for the
Orthopaedics CGU which is still sensitive to a reasonably possible change in assumptions. In 2023, the Group impaired $84m of
goodwill and $37m of intangible assets related to Engage as a result of\u00a0the impairment reviews undertaken for the voluntary product
discontinuation. For other intangible assets and goodwill CGUs, this critical estimate is not considered to have a signi\ufb01cant risk of
material adjustment in 2024 or therea\ufb05er based on sensitivity analyses undertaken (as outlined below). See Notes 8 and 9 for
further details on impairment reviews.
Current economic environment impact assessment: Management have assessed the non-current assets held by the Group at
31 December 2023 to identify any indicators of impairment as a result of current economic environment. Where an impairment
indicator\u00a0has arisen, impairment reviews have been undertaken by comparing the expected recoverable value of the asset to the
carrying value of the asset. The recoverable amounts are based on cash \ufb02ow projections using the Group\u2019s base case scenario
in\u00a0its\u00a0going\u00a0concern models, which was reviewed and approved by the Board.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23229": { "value": "1.4
Foreign currencies
Functional and presentation currency
The Group accounts are presented in US Dollars. The Company\u2019s functional currency is US Dollars.
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group companies at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional
currency at\u00a0the exchange rate as at\u00a0the reporting date. Non-monetary items are not retranslated.
Foreign operations
Balance sheet items of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into US
Dollars on consolidation at the exchange rates at the reporting date. Income statement items and the cash \ufb02ows of foreign operations
are translated at\u00a0average\u00a0rates as an approximation to actual transaction rates, with actual transaction rates used for large
one-o\ufb00 transactions.
Foreign currency di\ufb00erences are recognised in \u2018Other comprehensive income\u2019 and accumulated in \u2018Other reserves\u2019 within equity.
These include: exchange di\ufb00erences on the translation at closing rates of exchange of non-US Dollar opening net assets; the di\ufb00erences
arising between the translation of pro\ufb01ts into US Dollars at actual (or\u00a0average, as an approximation) and closing exchange rates; to the
extent that the hedging relationship is e\ufb00ective, the di\ufb00erence on translation of foreign currency borrowings or swaps that are used
to\u00a0\ufb01nance or hedge the Group\u2019s net investments in foreign operations; and the movement in the fair value of forward foreign exchange
contracts used to hedge forecast foreign exchange cash \ufb02ows.
The exchange rates used for the translation of currencies into US Dollars that have the most signi\ufb01cant impact on the Group results were:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
2021
Average rates
\u00a0 \u00a0 \u00a0
Sterling
1.24
1.23
1.38
Euro
1.08
1.05
1.18
Swiss Franc
1.11
1.05
1.09
Year end rates
\u00a0 \u00a0 \u00a0
Sterling
1.27
1.21
1.35
Euro
1.10
1.07
1.13
Swiss Franc
1.19
1.08
1.10
\n16.1
Foreign exchange risk management
The Group operates in many countries and as a consequence has transactional and translational foreign exchange exposure. It is the
Group\u2019s\u00a0policy for operating units not to hold material unhedged monetary assets or liabilities other than in their functional currencies.
Foreign exchange variations a\ufb00ect trading results in two ways. Firstly, on translation of overseas sales and pro\ufb01ts into US Dollars
and\u00a0secondly, transactional exposures arising where some, or all of the costs of sale are incurred in a di\ufb00erent currency from the sale.
The principal transactional exposures arise as the proportion of costs in US Dollars, Sterling and Swiss Francs exceed the proportion
of\u00a0sales in each of these currencies and correspondingly the proportion of sales in Euros exceeds the proportion of costs in Euros.
The impact of currency movements on the cost of purchases is partly mitigated by the use of forward foreign exchange contracts.
The Group uses forward foreign exchange contracts, designated as cash \ufb02ow hedges, to hedge forecast third-party trading cash \ufb02ows
up\u00a0to\u00a0one year. When a commitment is entered into, forward foreign exchange contracts are normally used to increase the hedge
to 100% of the exposure. Cash \ufb02ows relating to cash \ufb02ow hedges are expected to occur within 12 months of inception and pro\ufb01ts
and losses on hedges are expected to enter into the determination of pro\ufb01t (within cost of goods sold) within a further 12-month
period. The principal currencies hedged by forward foreign exchange contracts are US Dollars, Euros, Sterling and Singapore Dollars.
At 31 December 2023, the Group had contracted to exchange within one year the equivalent of $2.4bn (2022: $2.2bn). Based on
the Group\u2019s net borrowings as at 31 December 2023, if the US Dollar were to weaken against all currencies by 10%, the Group\u2019s
net\u00a0borrowings would increase by\u00a0$37m (2022: $41m) principally due to the Euro-denominated term loans.
If the US Dollar were to weaken by 10% against all other currencies, then the fair value of the forward foreign exchange contracts as
at 31 December 2023 would have been $67m lower (2022: $50m lower). Similarly, if the Euro were to weaken by 10% against all other
currencies, then the fair value of the forward foreign exchange contracts as at 31 December 2023 would have been $38m higher
(2022:\u00a0$35m higher). Movements in the fair value of forward foreign exchange contracts would be recognised in other comprehensive
income or in the income statement.
A 10% strengthening of the US Dollar or Euro against all other currencies at 31 December 2023 would have had the equal but opposite
e\ufb00ect to the amounts shown above, on the basis that all other variables remain constant.
The Group\u2019s policy is to hedge all actual foreign exchange exposures and the Group\u2019s forward foreign exchange contracts are designated
as cash \ufb02ow hedges. The net impact of transaction-related foreign exchange on the income statement from a movement in exchange
rates on the value of forward foreign exchange contracts is not signi\ufb01cant. In addition, the movements in the fair value of other \ufb01nancial
instruments used for hedging such as currency swaps for which hedge accounting is not applied o\ufb00set movements in the values of
assets and liabilities and are recognised through the income statement. Hedge ine\ufb00ectiveness is caused by actual cash \ufb02ows in foreign
currencies varying from forecast cash \ufb02ows.", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23233": { "value": "Functional and presentation currency The Group accounts are presented in US Dollars. The Company\u2019s functional currency is US Dollars.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23237": { "value": "Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group companies at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional
currency at\u00a0the exchange rate as at\u00a0the reporting date. Non-monetary items are not retranslated.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23380": { "value": "2
Business segment information
The Group\u2019s operating structure is organised around three global business units and the chief operating decision maker monitors
performance, makes operating decisions and allocates resources on a global business unit basis. Accordingly, the Group has concluded
that\u00a0there are three\u00a0reportable segments.
Business unit presidents have responsibility for upstream marketing, driving product portfolio and technology acquisition decisions,
full\u00a0commercial responsibility and for the implementation of\u00a0their business unit strategy globally.
The Executive Committee (\u2018ExCo\u2019) comprises the Chief Financial O\ufb03cer (\u2018CFO\u2019), the business unit presidents and certain heads of
function, and is chaired by the Chief Executive O\ufb03cer (\u2018CEO\u2019). ExCo is the body through which the CEO uses the authority delegated
to him by the Board of Directors to manage the operations and performance of the Group. All signi\ufb01cant operating decisions regarding
the allocation and prioritisation of the Group\u2019s resources and assessment of the Group\u2019s performance are made by\u00a0ExCo, and while
the members have individual responsibility for the implementation of decisions within their respective areas, it\u00a0is\u00a0at\u00a0the ExCo level
that these decisions are made. Accordingly, ExCo is considered to be the Group\u2019s chief operating decision maker as\u00a0de\ufb01ned by\u00a0IFRS 8
Operating Segments
.
In making decisions about the prioritisation and allocation of the Group\u2019s resources, ExCo reviews \ufb01nancial information for the three
business units (Orthopaedics, Sports Medicine & ENT and Advanced Wound Management) and determines the best allocation of
resources to the business units. In 2023, ENT is identi\ufb01ed as a new operating segment, however, it does not meet the quantitative
threshold requirement to be disclosed as a reporting segment. It will remain aggregated with Sports Medicine to be an operating
segment as they share similar characteristics. This information is prepared substantially on the same basis as the Group\u2019s IFRS
\ufb01nancial\u00a0statements aside from the adjustments described in Note 2.2. Financial information for corporate costs is presented on
a\u00a0Group-wide basis. The ExCo is\u00a0not\u00a0provided with total assets and liabilities by segment, and therefore these measures are not
included\u00a0in the disclosures below. The results of\u00a0the segments are shown below.
2.1
Revenue by business segment and geography
Accounting policy
Revenue is recognised as the performance obligations to deliver products or services are satis\ufb01ed and is recorded based on the
amount of consideration expected to be received in exchange for satisfying the performance obligations. Revenue is recognised
primarily when control is transferred to the customer, which is generally when the goods are shipped or delivered in accordance
with\u00a0the contract terms, with some transfer of services taking place over time. Substantially all performance obligations are ful\ufb01lled
within one year. There is no signi\ufb01cant revenue associated with the provision of services. Payment terms to our customers are based
on commercially reasonable terms for the respective markets while also considering a customer\u2019s credit rating. Appropriate provisions
for returns, trade discounts and rebates are deducted from revenue. Rebates primarily comprise chargebacks and other discounts
granted to certain customers. Chargebacks are discounts that occur when a third-party purchases product from a wholesaler at
its agreed price plus a mark-up. The wholesaler in turn charges the Group for the di\ufb00erence between the price initially paid by the
wholesaler and the agreed price. The provision for chargebacks is based on expected sell-through levels by the Group\u2019s wholesalers
to\u00a0such customers, as well as estimated wholesaler inventory levels.
Orthopaedics and Sports Medicine & ENT (Ear, Nose & Throat)
Orthopaedics and Sports Medicine & ENT consists of the following businesses: Knee Implants, Hip Implants, Other Reconstruction,
Trauma & Extremities, Sports Medicine Joint Repair, Arthroscopic Enabling Technologies and ENT. Sales of inventory located
at\u00a0customer premises and available for customers\u2019 immediate use are recognised when noti\ufb01cation is received that the product
has been implanted or used. Substantially all other revenue is recognised when control is transferred to the customer, which is
generally when the goods are\u00a0shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount
of\u00a0consideration expected to\u00a0be received in\u00a0exchange for\u00a0transferring the products or services.
In general our business in Established Markets is direct to hospitals and ambulatory surgery centers whereas in the Emerging Markets
we\u00a0generally sell through distributors.
Advanced Wound Management
Advanced Wound Management consists of the following businesses: Advanced Wound Care, Advanced Wound Bioactives and
Advanced Wound Devices. Substantially all revenue is recognised when control is transferred to the customer, which is generally
when the goods are shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount of
consideration expected to be received in exchange for transferring the products or services. Appropriate provisions for returns,
trade\u00a0discounts and rebates are deducted from revenue, as explained above.
The majority of our Advanced Wound Management business, and in particular products used in community and homecare facilities,
is\u00a0through wholesalers and distributors. When control is transferred to a wholesaler or distributor, revenue is recognised accordingly.
The proportion of sales direct to hospitals is higher in our Advanced Wound Devices business in Established Markets.
Segment revenue reconciles to statutory revenues from continuing operations as follows:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Reportable segment revenue
\u00a0 \u00a0 \u00a0
Orthopaedics
2,214
2,113
2,156
Sports Medicine & ENT
1,729
1,590
1,560
Advanced Wound Management
1,606
1,512
1,496
Revenue from external customers
5,549
5,215
5,212
Disaggregation of revenue:
The following table shows the disaggregation of Group revenue by product by business unit:
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue by product from continuing operations
\u00a0 \u00a0 \u00a0
Knee Implants
940
899
876
Hip Implants
599
584
612
Other Reconstruction
111
87
92
Trauma & Extremities
564
543
576
Orthopaedics
2,214
2,113
2,156
Sports Medicine Joint Repair
945
870
839
Arthroscopic Enabling Technologies
588
567
590
ENT (Ear, Nose and Throat)
196
153
131
Sports Medicine & ENT
1,729
1,590
1,560
Advanced Wound Care
725
712
731
Advanced Wound Bioactives
553
520
496
Advanced Wound Devices
328
280
269
Advanced Wound Management
1,606
1,512
1,496
Consolidated revenue from continuing operations
5,549
5,215
5,212
\n
The following table shows the disaggregation of Group revenue by geographic market and product category. The disaggregation of
revenue into the two product categories below re\ufb02ects that in general the products in the Advanced Wound Management business unit
are sold to wholesalers and intermediaries, while products in the other business units are sold directly to hospitals, ambulatory surgery
centers and distributors. The further disaggregation of revenue by Established Markets and Emerging Markets re\ufb02ects that in general our
products are sold through distributors and intermediaries in the Emerging Markets while in the Established Markets, with the exception
of the Advanced Wound Care and Bioactives products, which are in general sold direct to hospitals and ambulatory surgery centers.
The disaggregation by Established Markets and Emerging Markets also re\ufb02ects their di\ufb00ering economic factors including volatility in
growth and outlook.
\n\n\n \n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0 \u00a0
2023
\u00a0 \u00a0
2022
\u00a0 \u00a0
2021
\u00a0
Established
Emerging
\u00a0
Established
Emerging
\u00a0
Established
Emerging
\u00a0
\u00a0
Markets
1
Markets
Total
Markets
1
Markets
Total
Markets
1
Markets
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
Orthopaedics, Sports Medicine & ENT
3,184
759
3,943
2,949
754
3,703
2,969
747
3,716
Advanced Wound Management
1,406
200
1,606
1,319
193
1,512
1,327
169
1,496
Total
4,590
959
5,549
4,268
947
5,215
4,296
916
5,212
\n
1
Established Markets comprises the US, Australia, Canada, Europe, Japan and New Zealand.
Sales are attributed to the country of destination. US revenue for 2023 was $2,979m (2022: $2,764m, 2021: $2,658m), China revenue
for\u00a02023 was $275m (2022: $319m, 2021: $352m) and\u00a0UK revenue for 2023 was $201m (2022: $186m, 2021: $189m).
Contract assets and liabilities
The nature of our products and services do not generally give rise to contract assets as we do not typically incur costs to ful\ufb01l a contract
before a product or service is provided to the customer. The Group generally satis\ufb01es performance obligations within one year from
the contract inception date. There was no material revenue recognised in the current reporting period that related to carried-forward
contract liabilities (deferred income) or performance obligations satis\ufb01ed in the previous year. There is no material revenue that is
likely to arise in future periods from unsatis\ufb01ed performance obligations at the balance sheet date. Therefore, there are no associated
signi\ufb01cant accrued income and deferred income balances at 31 December 2023. As of 31 December 2023, contract assets principally
comprise trade receivables and contract liabilities principally comprise rebates (as described in the accounting policy above). The accrual
for rebates at 31 December 2023 was $92m (2022: $103m) with $383m being recognised in revenue in 2023.
Major customers
No single customer generates revenue greater than 10% of the consolidated revenue.
2.2
Trading and operating pro\ufb01t by business segment
Trading pro\ufb01t is a trend measure which presents the pro\ufb01tability of the Group excluding the impact of speci\ufb01c transactions that
management considers a\ufb00ect the Group\u2019s short-term pro\ufb01tability and the comparability of results. The Group presents this measure
to\u00a0assist investors in their understanding of trends. The Group has identi\ufb01ed the following items, where material, as those to be excluded
from operating pro\ufb01t when arriving at trading pro\ufb01t: acquisition and disposal-related items; signi\ufb01cant restructuring programmes;
amortisation and impairment of acquisition intangibles; gains and losses arising from legal disputes; and other signi\ufb01cant items.
Further detail is\u00a0provided in Notes 2.3, 2.4, 2.5 and 2.6.
Segment trading pro\ufb01t is reconciled to the statutory measure below:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$ million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Segment pro\ufb01t
\u00a0 \u00a0 \u00a0
Orthopaedics
398
383
367
Sports Medicine & ENT
503
472
459
Advanced Wound Management
472
436
474
Segment trading pro\ufb01t
1,373
1,291
1,300
Corporate costs
(403)
(390)
(364)
Group trading pro\ufb01t
970
901
936
Acquisition and disposal-related items
1
(60)
(4)
(7)
Restructuring and rationalisation expenses
(220)
(167)
(113)
Amortisation and impairment of acquisition intangibles
1
(207)
(205)
(172)
Legal and other
1
(58)
(75)
(51)
Group operating pro\ufb01t
425
450
593
\n
1
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued. A total of $109m of Engage\u2019s assets and liabilities were written
o\ufb00 as a result of this action, which includes goodwill of $84m (included in acquisition and disposal-related items), intangible assets of $37m (included in amortisation and impairment of acquisition
intangibles), inventory of $21m (included in legal and other), partially o\ufb00set by remeasurement of contingent consideration of $33m (included in acquisition and disposal-related items).
2.3
Acquisition and disposal-related items
For the year ended 31 December 2023, costs primarily relate to the acquisition of CartiHeal and impairment of Engage goodwill,
partially\u00a0o\ufb00set by\u00a0credits relating to remeasurement of contingent consideration from prior year acquisitions.
For the year ended 31 December 2022, costs primarily relate to the acquisition of Engage and prior year acquisitions, partially o\ufb00set
by\u00a0credits relating to remeasurement of deferred and contingent consideration for prior year acquisitions.
For the year ended 31 December 2021, costs primarily relate to the acquisition of Extremity Orthopaedics and prior year acquisitions,
partially o\ufb00set by credits\u00a0relating to remeasurement of contingent consideration for prior year acquisitions.
2.4
Restructuring and rationalisation costs
For the year ended 31 December 2023 and 2022, these costs include e\ufb03ciency and productivity elements of the 12-Point Plan.
For the years ended 31 December 2023, 2022 and 2021, these costs also relate to the Operations and Commercial
Excellence programme.
For the years ended 31 December 2021, these costs also include the implementation of the Accelerating Performance and\u00a0Execution
(APEX) programme that was announced in February 2018.
2.5
Amortisation and impairment of acquisition intangibles
For the years ended 31 December 2023, 2022 and 2021, these costs relate to the amortisation and impairment of intangible assets
acquired in material business combinations.
2.6
Legal and other
For the year ended 31 December 2023, charges primarily relate to legal expenses for ongoing metal-on-metal hip claims partially o\ufb00set
by an decrease of $8m in the provision that re\ufb02ects the decrease in the present value of the estimated costs to resolve all other known
and anticipated metal-on-metal hip claims and by the release of a provision for an intellectual property dispute.
For the year ended 31 December 2022, charges primarily relate to legal expenses for ongoing metal-on-metal hip claims. These charges
in the year to 31 December 2022 were partially o\ufb00set by a credit of $7m relating to insurance recoveries for ongoing metal-on-metal
hip claims.
For the year ended 31 December 2021, charges primarily relate to legal expenses for ongoing metal-on-metal hip claims. These charges
in the year to 31 December 2021 were partially o\ufb00set by a credit of $35m relating to insurance recoveries for ongoing metal-on-metal
hip claims.
The years ended 31 December 2023, 2022 and 2021 also include costs for implementing the requirements of the EU Medical Device
Regulation which came into e\ufb00ect in May 2021 with a transition period to May 2024.
2.7
Non-current assets by geography
The following table presents the non-current assets of the Group based on their location:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
United Kingdom
525
487
541
United States of America
3,692
3,918
4,125
Other
1,397
1,387
1,447
Total non-current assets of the consolidated Group
1
5,614
5,792
6,113
\n
1
Non-current assets exclude retirement bene\ufb01t assets and deferred tax assets.", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23434": { "value": "2.1
Revenue by business segment and geography
Accounting policy
Revenue is recognised as the performance obligations to deliver products or services are satis\ufb01ed and is recorded based on the
amount of consideration expected to be received in exchange for satisfying the performance obligations. Revenue is recognised
primarily when control is transferred to the customer, which is generally when the goods are shipped or delivered in accordance
with\u00a0the contract terms, with some transfer of services taking place over time. Substantially all performance obligations are ful\ufb01lled
within one year. There is no signi\ufb01cant revenue associated with the provision of services. Payment terms to our customers are based
on commercially reasonable terms for the respective markets while also considering a customer\u2019s credit rating. Appropriate provisions
for returns, trade discounts and rebates are deducted from revenue. Rebates primarily comprise chargebacks and other discounts
granted to certain customers. Chargebacks are discounts that occur when a third-party purchases product from a wholesaler at
its agreed price plus a mark-up. The wholesaler in turn charges the Group for the di\ufb00erence between the price initially paid by the
wholesaler and the agreed price. The provision for chargebacks is based on expected sell-through levels by the Group\u2019s wholesalers
to\u00a0such customers, as well as estimated wholesaler inventory levels.
Orthopaedics and Sports Medicine & ENT (Ear, Nose & Throat)
Orthopaedics and Sports Medicine & ENT consists of the following businesses: Knee Implants, Hip Implants, Other Reconstruction,
Trauma & Extremities, Sports Medicine Joint Repair, Arthroscopic Enabling Technologies and ENT. Sales of inventory located
at\u00a0customer premises and available for customers\u2019 immediate use are recognised when noti\ufb01cation is received that the product
has been implanted or used. Substantially all other revenue is recognised when control is transferred to the customer, which is
generally when the goods are\u00a0shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount
of\u00a0consideration expected to\u00a0be received in\u00a0exchange for\u00a0transferring the products or services.
In general our business in Established Markets is direct to hospitals and ambulatory surgery centers whereas in the Emerging Markets
we\u00a0generally sell through distributors.
Advanced Wound Management
Advanced Wound Management consists of the following businesses: Advanced Wound Care, Advanced Wound Bioactives and
Advanced Wound Devices. Substantially all revenue is recognised when control is transferred to the customer, which is generally
when the goods are shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount of
consideration expected to be received in exchange for transferring the products or services. Appropriate provisions for returns,
trade\u00a0discounts and rebates are deducted from revenue, as explained above.
The majority of our Advanced Wound Management business, and in particular products used in community and homecare facilities,
is\u00a0through wholesalers and distributors. When control is transferred to a wholesaler or distributor, revenue is recognised accordingly.
The proportion of sales direct to hospitals is higher in our Advanced Wound Devices business in Established Markets.
Segment revenue reconciles to statutory revenues from continuing operations as follows:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Reportable segment revenue
\u00a0 \u00a0 \u00a0
Orthopaedics
2,214
2,113
2,156
Sports Medicine & ENT
1,729
1,590
1,560
Advanced Wound Management
1,606
1,512
1,496
Revenue from external customers
5,549
5,215
5,212
Disaggregation of revenue:
The following table shows the disaggregation of Group revenue by product by business unit:
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue by product from continuing operations
\u00a0 \u00a0 \u00a0
Knee Implants
940
899
876
Hip Implants
599
584
612
Other Reconstruction
111
87
92
Trauma & Extremities
564
543
576
Orthopaedics
2,214
2,113
2,156
Sports Medicine Joint Repair
945
870
839
Arthroscopic Enabling Technologies
588
567
590
ENT (Ear, Nose and Throat)
196
153
131
Sports Medicine & ENT
1,729
1,590
1,560
Advanced Wound Care
725
712
731
Advanced Wound Bioactives
553
520
496
Advanced Wound Devices
328
280
269
Advanced Wound Management
1,606
1,512
1,496
Consolidated revenue from continuing operations
5,549
5,215
5,212
\n
The following table shows the disaggregation of Group revenue by geographic market and product category. The disaggregation of
revenue into the two product categories below re\ufb02ects that in general the products in the Advanced Wound Management business unit
are sold to wholesalers and intermediaries, while products in the other business units are sold directly to hospitals, ambulatory surgery
centers and distributors. The further disaggregation of revenue by Established Markets and Emerging Markets re\ufb02ects that in general our
products are sold through distributors and intermediaries in the Emerging Markets while in the Established Markets, with the exception
of the Advanced Wound Care and Bioactives products, which are in general sold direct to hospitals and ambulatory surgery centers.
The disaggregation by Established Markets and Emerging Markets also re\ufb02ects their di\ufb00ering economic factors including volatility in
growth and outlook.
\n\n\n \n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0 \u00a0
2023
\u00a0 \u00a0
2022
\u00a0 \u00a0
2021
\u00a0
Established
Emerging
\u00a0
Established
Emerging
\u00a0
Established
Emerging
\u00a0
\u00a0
Markets
1
Markets
Total
Markets
1
Markets
Total
Markets
1
Markets
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
Orthopaedics, Sports Medicine & ENT
3,184
759
3,943
2,949
754
3,703
2,969
747
3,716
Advanced Wound Management
1,406
200
1,606
1,319
193
1,512
1,327
169
1,496
Total
4,590
959
5,549
4,268
947
5,215
4,296
916
5,212
\n
1
Established Markets comprises the US, Australia, Canada, Europe, Japan and New Zealand.
Sales are attributed to the country of destination. US revenue for 2023 was $2,979m (2022: $2,764m, 2021: $2,658m), China revenue
for\u00a02023 was $275m (2022: $319m, 2021: $352m) and\u00a0UK revenue for 2023 was $201m (2022: $186m, 2021: $189m).
Contract assets and liabilities
The nature of our products and services do not generally give rise to contract assets as we do not typically incur costs to ful\ufb01l a contract
before a product or service is provided to the customer. The Group generally satis\ufb01es performance obligations within one year from
the contract inception date. There was no material revenue recognised in the current reporting period that related to carried-forward
contract liabilities (deferred income) or performance obligations satis\ufb01ed in the previous year. There is no material revenue that is
likely to arise in future periods from unsatis\ufb01ed performance obligations at the balance sheet date. Therefore, there are no associated
signi\ufb01cant accrued income and deferred income balances at 31 December 2023. As of 31 December 2023, contract assets principally
comprise trade receivables and contract liabilities principally comprise rebates (as described in the accounting policy above). The accrual
for rebates at 31 December 2023 was $92m (2022: $103m) with $383m being recognised in revenue in 2023.
Major customers
No single customer generates revenue greater than 10% of the consolidated revenue.", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23435": { "value": "2.1
Revenue by business segment and geography
Accounting policy
Revenue is recognised as the performance obligations to deliver products or services are satis\ufb01ed and is recorded based on the
amount of consideration expected to be received in exchange for satisfying the performance obligations. Revenue is recognised
primarily when control is transferred to the customer, which is generally when the goods are shipped or delivered in accordance
with\u00a0the contract terms, with some transfer of services taking place over time. Substantially all performance obligations are ful\ufb01lled
within one year. There is no signi\ufb01cant revenue associated with the provision of services. Payment terms to our customers are based
on commercially reasonable terms for the respective markets while also considering a customer\u2019s credit rating. Appropriate provisions
for returns, trade discounts and rebates are deducted from revenue. Rebates primarily comprise chargebacks and other discounts
granted to certain customers. Chargebacks are discounts that occur when a third-party purchases product from a wholesaler at
its agreed price plus a mark-up. The wholesaler in turn charges the Group for the di\ufb00erence between the price initially paid by the
wholesaler and the agreed price. The provision for chargebacks is based on expected sell-through levels by the Group\u2019s wholesalers
to\u00a0such customers, as well as estimated wholesaler inventory levels.
Orthopaedics and Sports Medicine & ENT (Ear, Nose & Throat)
Orthopaedics and Sports Medicine & ENT consists of the following businesses: Knee Implants, Hip Implants, Other Reconstruction,
Trauma & Extremities, Sports Medicine Joint Repair, Arthroscopic Enabling Technologies and ENT. Sales of inventory located
at\u00a0customer premises and available for customers\u2019 immediate use are recognised when noti\ufb01cation is received that the product
has been implanted or used. Substantially all other revenue is recognised when control is transferred to the customer, which is
generally when the goods are\u00a0shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount
of\u00a0consideration expected to\u00a0be received in\u00a0exchange for\u00a0transferring the products or services.
In general our business in Established Markets is direct to hospitals and ambulatory surgery centers whereas in the Emerging Markets
we\u00a0generally sell through distributors.
Advanced Wound Management
Advanced Wound Management consists of the following businesses: Advanced Wound Care, Advanced Wound Bioactives and
Advanced Wound Devices. Substantially all revenue is recognised when control is transferred to the customer, which is generally
when the goods are shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount of
consideration expected to be received in exchange for transferring the products or services. Appropriate provisions for returns,
trade\u00a0discounts and rebates are deducted from revenue, as explained above.
The majority of our Advanced Wound Management business, and in particular products used in community and homecare facilities,
is\u00a0through wholesalers and distributors. When control is transferred to a wholesaler or distributor, revenue is recognised accordingly.
The proportion of sales direct to hospitals is higher in our Advanced Wound Devices business in Established Markets.
Segment revenue reconciles to statutory revenues from continuing operations as follows:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Reportable segment revenue
\u00a0 \u00a0 \u00a0
Orthopaedics
2,214
2,113
2,156
Sports Medicine & ENT
1,729
1,590
1,560
Advanced Wound Management
1,606
1,512
1,496
Revenue from external customers
5,549
5,215
5,212
Disaggregation of revenue:
The following table shows the disaggregation of Group revenue by product by business unit:
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue by product from continuing operations
\u00a0 \u00a0 \u00a0
Knee Implants
940
899
876
Hip Implants
599
584
612
Other Reconstruction
111
87
92
Trauma & Extremities
564
543
576
Orthopaedics
2,214
2,113
2,156
Sports Medicine Joint Repair
945
870
839
Arthroscopic Enabling Technologies
588
567
590
ENT (Ear, Nose and Throat)
196
153
131
Sports Medicine & ENT
1,729
1,590
1,560
Advanced Wound Care
725
712
731
Advanced Wound Bioactives
553
520
496
Advanced Wound Devices
328
280
269
Advanced Wound Management
1,606
1,512
1,496
Consolidated revenue from continuing operations
5,549
5,215
5,212
\n
The following table shows the disaggregation of Group revenue by geographic market and product category. The disaggregation of
revenue into the two product categories below re\ufb02ects that in general the products in the Advanced Wound Management business unit
are sold to wholesalers and intermediaries, while products in the other business units are sold directly to hospitals, ambulatory surgery
centers and distributors. The further disaggregation of revenue by Established Markets and Emerging Markets re\ufb02ects that in general our
products are sold through distributors and intermediaries in the Emerging Markets while in the Established Markets, with the exception
of the Advanced Wound Care and Bioactives products, which are in general sold direct to hospitals and ambulatory surgery centers.
The disaggregation by Established Markets and Emerging Markets also re\ufb02ects their di\ufb00ering economic factors including volatility in
growth and outlook.
\n\n\n \n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0 \u00a0
2023
\u00a0 \u00a0
2022
\u00a0 \u00a0
2021
\u00a0
Established
Emerging
\u00a0
Established
Emerging
\u00a0
Established
Emerging
\u00a0
\u00a0
Markets
1
Markets
Total
Markets
1
Markets
Total
Markets
1
Markets
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
Orthopaedics, Sports Medicine & ENT
3,184
759
3,943
2,949
754
3,703
2,969
747
3,716
Advanced Wound Management
1,406
200
1,606
1,319
193
1,512
1,327
169
1,496
Total
4,590
959
5,549
4,268
947
5,215
4,296
916
5,212
\n
1
Established Markets comprises the US, Australia, Canada, Europe, Japan and New Zealand.
Sales are attributed to the country of destination. US revenue for 2023 was $2,979m (2022: $2,764m, 2021: $2,658m), China revenue
for\u00a02023 was $275m (2022: $319m, 2021: $352m) and\u00a0UK revenue for 2023 was $201m (2022: $186m, 2021: $189m).
Contract assets and liabilities
The nature of our products and services do not generally give rise to contract assets as we do not typically incur costs to ful\ufb01l a contract
before a product or service is provided to the customer. The Group generally satis\ufb01es performance obligations within one year from
the contract inception date. There was no material revenue recognised in the current reporting period that related to carried-forward
contract liabilities (deferred income) or performance obligations satis\ufb01ed in the previous year. There is no material revenue that is
likely to arise in future periods from unsatis\ufb01ed performance obligations at the balance sheet date. Therefore, there are no associated
signi\ufb01cant accrued income and deferred income balances at 31 December 2023. As of 31 December 2023, contract assets principally
comprise trade receivables and contract liabilities principally comprise rebates (as described in the accounting policy above). The accrual
for rebates at 31 December 2023 was $92m (2022: $103m) with $383m being recognised in revenue in 2023.
Major customers
No single customer generates revenue greater than 10% of the consolidated revenue.", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23440": { "value": "Accounting policy
Revenue is recognised as the performance obligations to deliver products or services are satis\ufb01ed and is recorded based on the
amount of consideration expected to be received in exchange for satisfying the performance obligations. Revenue is recognised
primarily when control is transferred to the customer, which is generally when the goods are shipped or delivered in accordance
with\u00a0the contract terms, with some transfer of services taking place over time. Substantially all performance obligations are ful\ufb01lled
within one year. There is no signi\ufb01cant revenue associated with the provision of services. Payment terms to our customers are based
on commercially reasonable terms for the respective markets while also considering a customer\u2019s credit rating. Appropriate provisions
for returns, trade discounts and rebates are deducted from revenue. Rebates primarily comprise chargebacks and other discounts
granted to certain customers. Chargebacks are discounts that occur when a third-party purchases product from a wholesaler at
its agreed price plus a mark-up. The wholesaler in turn charges the Group for the di\ufb00erence between the price initially paid by the
wholesaler and the agreed price. The provision for chargebacks is based on expected sell-through levels by the Group\u2019s wholesalers
to\u00a0such customers, as well as estimated wholesaler inventory levels.
Orthopaedics and Sports Medicine & ENT (Ear, Nose & Throat)
Orthopaedics and Sports Medicine & ENT consists of the following businesses: Knee Implants, Hip Implants, Other Reconstruction,
Trauma & Extremities, Sports Medicine Joint Repair, Arthroscopic Enabling Technologies and ENT. Sales of inventory located
at\u00a0customer premises and available for customers\u2019 immediate use are recognised when noti\ufb01cation is received that the product
has been implanted or used. Substantially all other revenue is recognised when control is transferred to the customer, which is
generally when the goods are\u00a0shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount
of\u00a0consideration expected to\u00a0be received in\u00a0exchange for\u00a0transferring the products or services.
In general our business in Established Markets is direct to hospitals and ambulatory surgery centers whereas in the Emerging Markets
we\u00a0generally sell through distributors.
Advanced Wound Management
Advanced Wound Management consists of the following businesses: Advanced Wound Care, Advanced Wound Bioactives and
Advanced Wound Devices. Substantially all revenue is recognised when control is transferred to the customer, which is generally
when the goods are shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount of
consideration expected to be received in exchange for transferring the products or services. Appropriate provisions for returns,
trade\u00a0discounts and rebates are deducted from revenue, as explained above.
The majority of our Advanced Wound Management business, and in particular products used in community and homecare facilities,
is\u00a0through wholesalers and distributors. When control is transferred to a wholesaler or distributor, revenue is recognised accordingly.
The proportion of sales direct to hospitals is higher in our Advanced Wound Devices business in Established Markets.Accounting policy
Research and development
Research expenditure is expensed as incurred. Internal development expenditure is only capitalised if the recognition criteria in
IAS\u00a038
Intangible Assets
have been satis\ufb01ed. The Group considers that the regulatory, technical and market uncertainties inherent
in\u00a0the development of new products mean that in most cases development costs should not be capitalised as intangible assets
until\u00a0products receive approval from the appropriate regulatory body.
Payments to third parties for research and development projects are accounted for based on the substance of the arrangement.
If the\u00a0arrangement represents outsourced research and development activities the payments are generally expensed except
in limited circumstances where the respective development expenditure would be capitalised under the principles established
in\u00a0IAS\u00a038.\u00a0By contrast, the payments are capitalised if\u00a0the\u00a0arrangement represents consideration for the acquisition of intellectual
property developed at the risk of the third party.
Capitalised development expenditures are amortised on a straight-line basis over their useful economic lives from product launch.
Advertising costs
Advertising costs are expensed as incurred.Accounting policy
The charge for current taxation is based on the results for the year as adjusted for items which are non-assessable or non-deductible.
It is calculated using tax rates that have been enacted or substantively enacted as at the balance sheet date.
The Group operates in numerous tax jurisdictions around the world. At any given time, the Group typically is involved in tax audits
and other disputes and will have other tax returns potentially subject to audit. Signi\ufb01cant issues may take several years to resolve.
In estimating the probability and amount of any tax charge, management takes into account the views of internal and external
advisers and updates the amount of tax provision where considered appropriate. The ultimate tax liability may di\ufb00er from the
amount\u00a0provided depending on factors including interpretations of\u00a0tax law and settlement negotiations.
Deferred tax is recognised in respect of temporary di\ufb00erences between the carrying amounts of assets and liabilities for \ufb01nancial
reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised: for temporary di\ufb00erences related to investments in subsidiaries and associates where the Group is
able to control the timing of the reversal of the temporary di\ufb00erence and it is probable that this will not reverse in the foreseeable
future; on the initial recognition of non-deductible goodwill; and on the initial recognition of an asset or liability in a transaction that
is\u00a0not a business combination and that, at the time of the transaction, does not a\ufb00ect the accounting or taxable pro\ufb01t.
Deferred tax assets are recognised to the extent that it is probable that future taxable pro\ufb01ts will be available against which they
can\u00a0be used. Deferred tax assets are reviewed at each reporting date taking into account the recoverability of the deferred tax assets,
future pro\ufb01tability and any restrictions on use. The Group considers available evidence to assess future pro\ufb01tability over a reasonably
foreseeable time period, depending on the circumstances and typically a minimum of \ufb01ve years. Any material unrecognised deferred
tax assets are disclosed in Note 5.2.
Deferred tax is measured on an undiscounted basis, and at the tax rates that have been enacted or substantively enacted as at the
balance sheet date that are expected to apply in the periods in which the asset or liability is settled. It is recognised in the income
statement except when it relates to items credited or charged directly to other comprehensive income or equity, in which case
the\u00a0deferred tax is also recognised within other comprehensive income or equity respectively.
Deferred tax assets and liabilities are o\ufb00set when they relate to income taxes levied by the same taxation authority, the Group
intends to settle its current tax assets and liabilities on a net basis, o\ufb00set is permissible according to the relevant jurisdiction\u2019s
tax\u00a0laws and that authority permits the Group to make a single net payment.
In 2023, the Group has adopted
IAS 12-Deferred Tax related to Assets and Liabilities
arising from a Single Transaction amendments, which
narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and o\ufb00setting temporary di\ufb00erences
such as leases. The Group previously accounted for deferred tax on leases where the deferred tax asset or liability was recognised on a net
basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets. However, there is no impact on the balance sheet because the balances qualify for o\ufb00set under
paragraph 74 of IAS 12. There was also no impact on the opening retained earnings as at 1 January 2023 as a result of the change.Accounting policy
Earnings per share
Basic earnings per share is calculated by dividing the pro\ufb01t attributable to equity holders by the weighted average number of
ordinary\u00a0shares in\u00a0issue during the year, excluding shares held by the Company in the Employees\u2019 Share Trust or as treasury shares.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the basic earnings per share for the e\ufb00ect of conversion to ordinary shares
associated with\u00a0dilutive potential ordinary shares, which comprise share options and awards granted to employees.
Adjusted earnings per share
Adjusted earnings per share (or adjusted basic earnings per share) is a trend measure which presents the long-term pro\ufb01tability
of\u00a0the Group excluding the impact of speci\ufb01c transactions that management considers a\ufb00ects the Group\u2019s short-term pro\ufb01tability.
The Group presents this measure to assist investors in their understanding of trends. Adjusted attributable pro\ufb01t is the numerator
used for this measure. The Group has identi\ufb01ed the following items as those to be excluded when arriving at adjusted attributable
pro\ufb01t: acquisition and disposal-related items including amortisation and impairment of acquisition intangible assets; signi\ufb01cant
restructuring programmes; signi\ufb01cant gains and losses arising from legal disputes and other signi\ufb01cant items (including UK tax
litigation) and taxation thereon. Adjusted diluted earnings per share is calculated by adjusting the adjusted basic earnings per share
for the e\ufb00ect of conversion to ordinary shares associated with dilutive potential ordinary shares, which comprise share options and
awards granted to employees.Accounting policy
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated to write o\ufb00 the cost of items of property, plant and equipment less their estimated residual values using
the\u00a0straight-line method over their estimated useful lives, and is ultimately recognised in pro\ufb01t or loss. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Freehold land is not depreciated. The estimated useful lives of items of property, plant and equipment is 3\u201320 years
and for buildings is 20\u201350 years.
Assets in course of construction are not depreciated until they are available for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Finance costs relating to the purchase or construction of property, plant and equipment and intangible assets that take longer than
one year to complete are capitalised based on the Group weighted average borrowing costs. All other \ufb01nance costs are expensed
as incurred.
Leased assets
The assessment of whether a contract is or contains a lease takes place at the inception of the contract. The assessment involves
whether the Group obtains substantially all the economic bene\ufb01ts from the use of that asset and whether the Group has the right
to direct the use of the asset. The Group allocates the consideration in the contract to each lease and non-lease component.
The non-lease component, where it is separately identi\ufb01able, is not included in the right-of-use asset.
The Group leases many assets including properties, motor vehicles and o\ufb03ce equipment. The Group availed itself of the exemptions
for short-term leases and leases of low-value items for leases other than those for properties and motor vehicles. The use of these
exemptions does not have a material impact. The Group recognises a right-of-use asset and a lease liability at the commencement
of the lease. The right-of-use asset is initially measured based on the present value of lease payments that are not paid at the
commencement date plus initial direct costs less any incentives received. The lease payments are discounted using an incremental
borrowing rate which is country-speci\ufb01c and re\ufb02ective of the lease term. The right-of-use asset is depreciated over the shorter
of\u00a0the\u00a0lease term or the useful life of the underlying asset.
Cash \ufb02ows arising on lease interest payments are included in operating cash \ufb02ows whereas cash \ufb02ows arising on the capital
repayments of the lease liability are included in \ufb01nancing cash \ufb02ows.
Impairment of assets
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset,
the\u00a0Group estimates the recoverable amount of the cash-generating unit to which it belongs.
An asset\u2019s recoverable amount is the higher of an asset\u2019s or cash-generating unit\u2019s fair value less costs to sell and its value-in-use.
In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using a pre-tax discount rate that re\ufb02ects
the\u00a0current market assessment of the time value of money and the risks speci\ufb01c to the asset.Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.Accounting policy
Intangible assets
Intangible assets acquired separately from a business combination (including purchased patents, know-how, trademarks, licences
and\u00a0distribution rights) are initially measured at cost. The cost of intangible assets acquired in a material business combination
(referred to as acquisition intangibles) is the fair value as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any\u00a0accumulated amortisation and any accumulated impairment losses. All intangible assets are amortised on a
straight-line basis over their estimated useful economic lives. The estimated useful economic life of so\ufb05ware ranges between three
and seven years. The estimated useful economic life of technology assets ranges between 6\u201320 years, product-related assets ranges
between 2\u201320 years, and customer and distribution assets ranges between 2\u201314 years. Internally-generated intangible assets are
expensed in the income statement as incurred. Purchased computer so\ufb05ware and certain costs of information technology projects
are capitalised as intangible assets. So\ufb05ware that is integral to computer hardware is capitalised as plant and equipment.
Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which it belongs. An asset\u2019s recoverable amount is the higher of an asset\u2019s or CGU\u2019s fair value
less costs to sell and its value-in-use. In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using
a\u00a0pre-tax discount rate that re\ufb02ects the current market assessments of the time value of money and the risks speci\ufb01c to the asset.
In carrying out impairment reviews of intangible assets, a number of signi\ufb01cant assumptions have to be made when preparing cash
\ufb02ow\u00a0projections. These include the future rate of market growth, discount rates, the market demand for the products acquired,
the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals.
If actual results should di\ufb00er, or\u00a0changes in expectations should arise, impairment charges may be required which would adversely
impact operating results.Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.Accounting policy
Investments in associates, being those entities over which the Group has a signi\ufb01cant in\ufb02uence and which is neither a subsidiary
nor\u00a0a\u00a0joint\u00a0venture, are accounted for using the equity method, with the Group recording its share of the associates\u2019 pro\ufb01t and loss
and\u00a0other comprehensive income. The Group\u2019s share of associates\u2019 pro\ufb01t or loss is included in one separate income statement line
and\u00a0is\u00a0calculated a\ufb05er\u00a0deduction of their respective taxes.
The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.Accounting policy
Finished goods and work-in-progress are valued at factory cost, including appropriate overheads, on a \ufb01rst-in \ufb01rst-out basis.
Raw materials and bought-in \ufb01nished goods are valued at purchase price. All inventories are reduced to net realisable value where
lower than cost. Inventory acquired as\u00a0part of a business acquisition is valued at selling price less costs to sell and a pro\ufb01t allowance
for\u00a0selling e\ufb00orts.
Orthopaedic instruments are generally not sold but provided to customers and distributors for use in surgery. They are recorded
as inventory until they are deployed at which point they are transferred to plant and equipment and depreciated over their useful
economic lives of between three and seven years.
A feature of the orthopaedic business is the high level of product inventory required, some of which is located at customer premises
and is available for customers\u2019 immediate use (referred to as consignment inventory). Complete sets of product, including large and
small sizes, have to be made available in this way. These outer sizes are used less frequently than standard sizes and towards the
end of the product life cycle are inevitably in excess of requirements. Adjustments to carrying value are therefore required to be
made to orthopaedic inventory to anticipate this situation. These adjustments are calculated in accordance with a formula based on
levels of inventory compared with historical or forecast usage. This formula is applied on an individual product line basis and is \ufb01rst
applied when a product group has been on the market for two years. This method of calculation is considered appropriate based
on\u00a0experience but it involves management judgements on e\ufb00ectiveness of\u00a0inventory deployment, length of product lives, phase-out
of\u00a0old products and e\ufb03ciency of manufacturing planning systems.Accounting policy
Trade and other receivables are carried at amortised cost, less any allowances for uncollectable amounts. They are included
in\u00a0current\u00a0assets, except for maturities greater than 12 months a\ufb05er the balance sheet date when they are classi\ufb01ed as
non-current assets.
The Group manages credit risk through credit limits which require authorisation commensurate with the size of the limit and
which are regularly reviewed. Credit limit decisions are made based on available \ufb01nancial information and the business case.
Signi\ufb01cant receivables are regularly reviewed and monitored at Group level. The Group has no signi\ufb01cant concentration of credit risk,
with exposure spread over a large number of customers and geographies. Furthermore, the Group\u2019s principal customers are backed
by government and public or private medical insurance funding, which historically represent a lower risk of default. The maximum
exposure to credit risk at the reporting date is the fair value of each class of\u00a0receivable. The Group does not hold any collateral as
security. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.
On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.Accounting policy
In the normal course of business the Group is involved in various legal disputes. Provisions are made for loss contingencies when it is
deemed probable that an adverse outcome will occur and the amount of the losses can be reasonably estimated. Where the Group is
the plainti\ufb00 in pursuing claims against third parties, legal and associated expenses are charged to the income statement as incurred.
The recognition of provisions for legal disputes is subject to a signi\ufb01cant degree of estimation. In making its estimates, management
takes into account the advice of internal and external legal counsel. Provisions are reviewed regularly and amounts updated where
necessary to re\ufb02ect developments in the disputes. The ultimate liability may di\ufb00er from the amount provided depending on the
outcome of court proceedings or settlement negotiations or as new facts emerge. Insurance recoveries are recognised when the
in\ufb02ow of bene\ufb01ts is virtually certain and are presented within other receivables.
A provision for onerous contracts is recognised when the expected bene\ufb01ts to be derived by the Group from a contract are lower
than\u00a0the unavoidable cost of meeting its obligations under the contract.
A provision for restructuring and rationalisation is recognised when the Group has approved a detailed and formal restructuring plan
and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for. Accounting policy
The Group sponsors de\ufb01ned bene\ufb01t plans in a number of countries. A de\ufb01ned bene\ufb01t pension plan de\ufb01nes an amount of pension
bene\ufb01t that an employee will receive on retirement or a minimum guaranteed return on contributions, which is dependent on various
factors such as age, years of service and \ufb01nal salary. The Group\u2019s obligation is calculated separately for each plan by discounting
the\u00a0estimated future bene\ufb01t that employees have\u00a0earned in return for their service in the current and prior periods. The fair value
of\u00a0any plan assets is deducted to arrive at the net liability.
The calculation of the de\ufb01ned bene\ufb01t obligation is performed annually by external actuaries using the projected unit credit method.
Remeasurements arising from de\ufb01ned bene\ufb01t plans comprise actuarial gains and losses and the return on the plan assets in excess
of the discount rate net of the costs of\u00a0managing the plan assets. The Group recognises these immediately in other comprehensive
income (OCI) and all other expenses, such as service cost, net interest cost, administration costs and taxes, are recognised in the
income statement.
A number of key assumptions are made when calculating the fair value of the Group\u2019s de\ufb01ned bene\ufb01t pension plans. These
assumptions impact the balance sheet asset and liabilities, operating pro\ufb01t, \ufb01nance income/costs and other comprehensive income.
The most critical assumptions are the discount rate, the rate of in\ufb02ation and mortality assumptions to be applied to future pension
plan liabilities. The discount rate is based on the yield at the reporting date on bonds that have a credit rating of AA, denominated
in the currency in which the bene\ufb01ts are expected to be paid and have a maturity pro\ufb01le approximately the same as the\u00a0Group\u2019s
obligations. In determining these assumptions management takes into account the advice of professional external actuaries
and\u00a0benchmarks its assumptions against external data.
The Group determines the net interest expense/income on the net de\ufb01ned bene\ufb01t liability/asset for the period by applying the
discount rate used to\u00a0measure the de\ufb01ned bene\ufb01t obligation at the beginning of the annual period to the net de\ufb01ned bene\ufb01t
liability/asset.
The Group also operates a number of de\ufb01ned contribution plans. A de\ufb01ned contribution plan is a pension plan under which the
Group\u00a0and employees pay \ufb01xed contributions to a third-party \ufb01nancial provider. The Group has no further payment obligations
once\u00a0the contributions have\u00a0been\u00a0paid. Contributions are recognised as an employee bene\ufb01t expense when they are due. Accounting policy
Incremental costs directly attributable to the issue of ordinary shares, net of any tax e\ufb00ects, are recognised as a deduction
from equity.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable
costs, net of any tax e\ufb00ects, is recognised as a deduction from equity. Repurchased shares are classi\ufb01ed as treasury shares and
are\u00a0presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is
recognised as an increase in\u00a0equity and the resulting surplus or de\ufb01cit on the transaction is presented within share premium. Accounting policy
In the Group cash \ufb02ow statement, cash and cash equivalents includes cash at bank, other short-term liquid investments with original
maturities of three months or less and bank overdra\ufb05s. In the Group balance sheet, bank overdra\ufb05s are shown within bank overdra\ufb05s,
borrowings, loans and lease liabilities under current liabilities. Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is measured at fair value, as are the identi\ufb01able net assets acquired. Any goodwill
that\u00a0arises is tested annually for\u00a0impairment. Any gain on a bargain purchase is recognised in pro\ufb01t or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classi\ufb01ed
as\u00a0equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value
of\u00a0the\u00a0contingent consideration are recognised in pro\ufb01t or loss. Accounting policy
The Group operates a number of equity-settled executive and employee share plans. For all grants of share options and awards,
the\u00a0fair value at the grant date is calculated using appropriate option pricing models. The grant date fair value is recognised over
the\u00a0vesting period as an expense, with a corresponding increase in retained earnings. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23441": { "value": "Accounting policy
Revenue is recognised as the performance obligations to deliver products or services are satis\ufb01ed and is recorded based on the
amount of consideration expected to be received in exchange for satisfying the performance obligations. Revenue is recognised
primarily when control is transferred to the customer, which is generally when the goods are shipped or delivered in accordance
with\u00a0the contract terms, with some transfer of services taking place over time. Substantially all performance obligations are ful\ufb01lled
within one year. There is no signi\ufb01cant revenue associated with the provision of services. Payment terms to our customers are based
on commercially reasonable terms for the respective markets while also considering a customer\u2019s credit rating. Appropriate provisions
for returns, trade discounts and rebates are deducted from revenue. Rebates primarily comprise chargebacks and other discounts
granted to certain customers. Chargebacks are discounts that occur when a third-party purchases product from a wholesaler at
its agreed price plus a mark-up. The wholesaler in turn charges the Group for the di\ufb00erence between the price initially paid by the
wholesaler and the agreed price. The provision for chargebacks is based on expected sell-through levels by the Group\u2019s wholesalers
to\u00a0such customers, as well as estimated wholesaler inventory levels.
Orthopaedics and Sports Medicine & ENT (Ear, Nose & Throat)
Orthopaedics and Sports Medicine & ENT consists of the following businesses: Knee Implants, Hip Implants, Other Reconstruction,
Trauma & Extremities, Sports Medicine Joint Repair, Arthroscopic Enabling Technologies and ENT. Sales of inventory located
at\u00a0customer premises and available for customers\u2019 immediate use are recognised when noti\ufb01cation is received that the product
has been implanted or used. Substantially all other revenue is recognised when control is transferred to the customer, which is
generally when the goods are\u00a0shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount
of\u00a0consideration expected to\u00a0be received in\u00a0exchange for\u00a0transferring the products or services.
In general our business in Established Markets is direct to hospitals and ambulatory surgery centers whereas in the Emerging Markets
we\u00a0generally sell through distributors.
Advanced Wound Management
Advanced Wound Management consists of the following businesses: Advanced Wound Care, Advanced Wound Bioactives and
Advanced Wound Devices. Substantially all revenue is recognised when control is transferred to the customer, which is generally
when the goods are shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount of
consideration expected to be received in exchange for transferring the products or services. Appropriate provisions for returns,
trade\u00a0discounts and rebates are deducted from revenue, as explained above.
The majority of our Advanced Wound Management business, and in particular products used in community and homecare facilities,
is\u00a0through wholesalers and distributors. When control is transferred to a wholesaler or distributor, revenue is recognised accordingly.
The proportion of sales direct to hospitals is higher in our Advanced Wound Devices business in Established Markets.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23450": { "value": "Appropriate provisions
for returns, trade discounts and rebates are deducted from revenue. Rebates primarily comprise chargebacks and other discounts
granted to certain customers. Chargebacks are discounts that occur when a third-party purchases product from a wholesaler at
its agreed price plus a mark-up. The wholesaler in turn charges the Group for the di\ufb00erence between the price initially paid by the
wholesaler and the agreed price. The provision for chargebacks is based on expected sell-through levels by the Group\u2019s wholesalers
to\u00a0such customers, as well as estimated wholesaler inventory levels.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23459": { "value": "Orthopaedics and Sports Medicine & ENT (Ear, Nose & Throat)
Orthopaedics and Sports Medicine & ENT consists of the following businesses: Knee Implants, Hip Implants, Other Reconstruction,
Trauma & Extremities, Sports Medicine Joint Repair, Arthroscopic Enabling Technologies and ENT. Sales of inventory located
at\u00a0customer premises and available for customers\u2019 immediate use are recognised when noti\ufb01cation is received that the product
has been implanted or used. Substantially all other revenue is recognised when control is transferred to the customer, which is
generally when the goods are\u00a0shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount
of\u00a0consideration expected to\u00a0be received in\u00a0exchange for\u00a0transferring the products or services.
In general our business in Established Markets is direct to hospitals and ambulatory surgery centers whereas in the Emerging Markets
we\u00a0generally sell through distributors.
Advanced Wound Management
Advanced Wound Management consists of the following businesses: Advanced Wound Care, Advanced Wound Bioactives and
Advanced Wound Devices. Substantially all revenue is recognised when control is transferred to the customer, which is generally
when the goods are shipped or delivered in accordance with the contract terms. Revenue is recognised for the amount of
consideration expected to be received in exchange for transferring the products or services. Appropriate provisions for returns,
trade\u00a0discounts and rebates are deducted from revenue, as explained above.
The majority of our Advanced Wound Management business, and in particular products used in community and homecare facilities,
is\u00a0through wholesalers and distributors. When control is transferred to a wholesaler or distributor, revenue is recognised accordingly.
The proportion of sales direct to hospitals is higher in our Advanced Wound Devices business in Established Markets.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f23960": { "value": "Contract assets and liabilities
The nature of our products and services do not generally give rise to contract assets as we do not typically incur costs to ful\ufb01l a contract
before a product or service is provided to the customer. The Group generally satis\ufb01es performance obligations within one year from
the contract inception date. There was no material revenue recognised in the current reporting period that related to carried-forward
contract liabilities (deferred income) or performance obligations satis\ufb01ed in the previous year. There is no material revenue that is
likely to arise in future periods from unsatis\ufb01ed performance obligations at the balance sheet date. Therefore, there are no associated
signi\ufb01cant accrued income and deferred income balances at 31 December 2023. As of 31 December 2023, contract assets principally
comprise trade receivables and contract liabilities principally comprise rebates (as described in the accounting policy above). The accrual
for rebates at 31 December 2023 was $92m (2022: $103m) with $383m being recognised in revenue in 2023.", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24168": { "value": "2.5
Amortisation and impairment of acquisition intangibles
For the years ended 31 December 2023, 2022 and 2021, these costs relate to the amortisation and impairment of intangible assets
acquired in material business combinations.
Plant and equipment
Assets in
Land and
course of
buildings
Instruments
Other
construction
Total
\u00a0Notes
\u00a0
\u00a0
\u00a0
$ million
$ million
$ million
$ million
$ million
Cost
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
688
1,694
1,282
303
3,967
Exchange adjustment
\u00a0
\u00a0
(18)
(66)
(39)
(6)
(129)
Acquisitions
21
\u2013
2
\u2013
\u2013
2
Additions
\u00a0
\u00a0
51
129
24
136
340
Disposals
(45)
(58)
(49)
(1)
(153)
Impairment
\u2013
\u2013
\u2013
(3)
(3)
Transfers
\u00a0
\u00a0
50
9
114
(173)
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
726
1,710
1,332
256
4,024
Exchange adjustment
\u00a0
\u00a0
8
10
21
4
43
Additions
\u00a0
\u00a0
69
211
29
70
379
Disposals
(39)
(88)
(51)
(2)
(180)
Impairment
\u2013
\u2013
\u2013
(5)
(5)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
27
1
102
(153)
(23)
At 31 December\u00a02023
\u00a0
\u00a0
795
1,844
1,433
170
4,242
Depreciation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
249
1,292
913
\u2013
2,454
Exchange adjustment
\u00a0
\u00a0
(8)
(52)
(29)
\u2013
(89)
Charge for the\u00a0year
\u00a0
\u00a0
62
172
85
\u2013
319
Impairment
\u00a0
\u00a0
18
8
1
\u2013
27
Disposals
\u00a0
\u00a0
(37)
(58)
(47)
\u2013
(142)
Transfers
\u00a0
\u00a0
\u2013
4
(4)
\u2013
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
284
1,366
919
\u2013
2,569
Exchange adjustment
\u00a0
\u00a0
4
8
15
\u2013
27
Charge for the\u00a0year
\u00a0
\u00a0
63
154
89
\u2013
306
Impairment
\u00a0
\u00a0
21
1
4
\u2013
26
Disposals
(34)
(76)
(50)
\u2013
(160)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
\u2013
(1)
1
\u2013
\u2013
At 31 December\u00a02023
\u00a0
\u00a0
342
1,452
978
\u2013
2,772
Net book amounts
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December\u00a02023
453
392
455
170
1,470
At 31 December\u00a02022
\u00a0
\u00a0
442
344
413
256
1,455
8
Goodwill
Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.
\u00a0 \u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Cost and net book value
\u00a0 \u00a0 \u00a0
At 1 January
\u00a0
3,031
2,989
Exchange adjustment
\u00a0
45
(42)
Impairment
\u00a0
(84)
\u2013
Acquisitions
21
\u2013
84
At 31 December
\u00a0
2,992
3,031
\n
Management has identi\ufb01ed \ufb01ve CGUs in applying the provisions of IAS 36
Impairment of Assets
: Orthopaedics, Sports Medicine, ENT,
Advanced Wound Care & Devices and Bioactives.
In 2023, ENT was identi\ufb01ed as a separate operating segment following change in the Group\u2019s management structure. Therefore, ENT
was identi\ufb01ed as a new CGU for goodwill impairment reviews.
For the purpose of goodwill impairment testing, the Advanced Wound Care & Devices and Bioactives CGUs have been aggregated
(Advanced Wound Management), as this is the level at which goodwill is monitored and level at which the economic bene\ufb01ts relating
to\u00a0the goodwill within these CGUs is realised.
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued.
The goodwill related to Engage of $84m, previously included in the Orthopaedics CGU, was fully impaired.
Goodwill is allocated to the Group\u2019s CGUs as follows:
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Orthopaedics\u00a0
\u00a0
915
953
Sports Medicine
1
1,154
1,455
ENT
1
287
\u2013
Advanced Wound Management
636
623
\u00a0
2,992
3,031
\n
1
In 2022, Sports Medicine and ENT was combined CGU whereas ENT is identi\ufb01ed as a separate CGU in 2023.
Impairment reviews were performed as of September 2023 and September 2022 by comparing the recoverable amount of each CGU
with\u00a0its carrying amount, including goodwill. These were reviewed during December, taking into account any signi\ufb01cant events that
occurred between September and December.
The current challenging economic environment, including in\ufb02ation, was considered in the goodwill impairment reviews. Additionally,
severe downside sensitivity analyses have been undertaken on the base case scenario. Although the headroom for the Orthopaedics
CGU has increased it is still considered sensitive to a reasonably possible change in assumptions, no impairment was identi\ufb01ed as a
result\u00a0of the impairment reviews and\u00a0sensitivity analyses undertaken.
For each CGU, the recoverable amounts are based on value-in-use which is calculated from pre-tax cash \ufb02ow projections for
three\u00a0years\u00a0using data from the Group\u2019s budget and strategic planning process, the results of which are reviewed and approved by
the Board. These projections were extrapolated for a further two years to re\ufb02ect expected growth in the CGUs above the terminal
growth rate which is based on long term GDP growth. The initial three-year period is in line with the Group\u2019s strategic planning
process. In determining the growth rates used in the calculations of the value-in-use, management considered annual revenue growth.
Projections are based on anticipated volume and value growth in the markets served by the Group and assumptions as to market
share movements. Each year the projections for the previous year are compared to actual results and variances are factored into
the\u00a0assumptions used in the current year.
The discount rates used in the value-in-use calculations re\ufb02ect management\u2019s assessment of risks speci\ufb01c to the assets of each CGU.
Our determination of the discount rates is based on Group\u2019s weighted average cost of capital (WACC) which includes a risk-free rate,
based on market participant\u2019s cost of equity, an equity risk premium speci\ufb01cally adjusted to the medical technology industry and
a\ufb05er-tax cost of debt and re\ufb02ects the risks inherent in the cash \ufb02ows adjusted for CGU speci\ufb01c risk.
8.1
Orthopaedics CGU
The cash \ufb02ows used in the value-in-use calculation for the Orthopaedics CGU, which includes the Reconstruction and Trauma
businesses, re\ufb02ects management\u2019s distinctive orthopaedic reconstruction strategy, which combines cutting-edge innovation,
disruptive\u00a0business models and a strong Emerging Markets platform to drive our performance.
The headroom for the Orthopaedics CGU has increased from $0.6bn in the prior year to $1.2bn in the current year, primarily due to
higher revenue growth and expected margin improvement thereon. Revenue is expected to grow above market growth rates due to
new product launches and improved commercial execution. The trading pro\ufb01t margin is expected to grow over the \ufb01ve-year period
as a result of revenue growth as well as productivity and e\ufb03ciency improvements related to the 12-Point Plan. The average growth
rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating the terminal value is 2.0%
(2022: 2.0%). The pre-tax discount rate used in the Orthopaedics CGU value-in-use calculation re\ufb02ects the geographical mix and is
10.8% (2022: 10.1%).
8.2
Sports Medicine CGU
The cash \ufb02ows used in the value-in-use calculation for the Sports Medicine CGU re\ufb02ects growth rates and cash \ufb02ows consistent with
management\u2019s strategy to maintain growth in Sports Medicine.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating
the terminal value is 2.0% (2022: 2.0%). The pre-tax discount rate used in the Sports Medicine CGU value-in-use calculation re\ufb02ects the
geographical mix of the revenues and is 10.8% (2022: 10.1%).
8.3
ENT CGU
The cash \ufb02ow used in the value-in-use calculation for the ENT CGU re\ufb02ects growth rates and cash \ufb02ows consistent with
management\u2019s strategy.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period in calculating the terminal value
is 2.0%. The pre-tax discount rate used in the ENT CGU value-in-use calculation re\ufb02ects the geographical mix of the revenues and is
10.8%.
8.4
Advanced Wound Management CGU
The aggregated Advanced Wound Management CGU comprises the Advanced Wound Care & Devices and Bioactives CGUs.
In performing the value-in-use calculation for this combined CGU, management considered the Group\u2019s focus across the wound
product, focusing on widening access to the customer, the higher added value sectors of healing chronic wounds and tissue repair using
bioactives, and by continuing to improve e\ufb03ciency.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating
the terminal value is 2.0% (2022: 2.0%). The pre tax discount rate used in the Advanced Wound Management CGU value-in-use
calculation re\ufb02ects the geographical mix and industry sector and is 10.8% (2022: 10.1%).
8.5
Sensitivity to changes in assumptions used in value-in-use calculations
Management have performed a sensitivity analysis of the value-in-use calculations for the identi\ufb01ed CGUs and there was no impact
on\u00a0the reported amounts of goodwill as a result of this review for the Sports Medicine, ENT and Advanced Wound Management CGUs.
Management do not believe a reasonably possible change in assumptions used for the Orthopaedics CGU value-in-use, other than
trading pro\ufb01t margin, could result in a material impairment. Management\u2019s consideration of this sensitivity is set out below:
Trading pro\ufb01t margin
\u2013 management has considered the impact of a decrease in the trading pro\ufb01t margin. This sensitivity analysis
shows\u00a0that for the recoverable amount of the Orthopaedics CGU to be less than its carrying value, the terminal period and year 5
trading\u00a0pro\ufb01t margin would have\u00a0to decrease by more than 550 basis points.\n \n
Customer\u00a0and
Assets
Product-
distribution-
in course of
Technology
related
related
So\ufb05ware
construction
Total
Notes\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Cost
At 1 January\u00a02022
588
2,206
231
491
68
3,584
Exchange adjustment
(6)
(21)
(2)
(14)
(2)
(45)
Acquisitions
21
\u2013
44
\u2013
\u2013
\u2013
44
Additions
\u2013
3
7
32
35
77
Disposals
\u2013
\u2013
(1)
(5)
\u2013
(6)
Impairment
\u2013
\u2013
\u2013
\u2013
(1)
(1)
Transfers
\u2013
\u2013
\u2013
4
(4)
\u2013
At 31 December\u00a02022
582
2,232
235
508
96
3,653
Exchange adjustment
4
36
(1)
5
4
48
Additions
\u2013
2
2
36
64
104
Disposals
(1)
(7)
\u2013
(4)
\u2013
(12)
Transfers
(3)
10
\u2013
2
14
23
At 31 December\u00a02023
582
2,273
236
547
178
3,816
Amortisation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
180
1,482
145
379
\u2013
2,186
Exchange adjustment
(2)
(19)
(2)
(8)
\u2013
(31)
Charge for the year
46
123
17
43
\u2013
229
Impairment
4
28
\u2013
6
\u2013
38
Disposals
\u2013
\u2013
\u2013
(5)
\u2013
(5)
At 31 December\u00a02022
228
1,614
160
415
\u2013
2,417
Exchange adjustment
2
36
\u2013
4
\u2013
42
Charge for the year
46
121
16
38
\u2013
221
Impairment
\u2013
37
\u2013
\u2013
\u2013
37
Disposals
\u2013
(7)
\u2013
(4)
\u2013
(11)
At 31 December\u00a02023
276
1,801
176
453
\u2013
2,706
Net book amounts
\u00a0
\u00a0
At 31 December\u00a02023
306
472
60
94
178
1,110
At 31 December\u00a02022
354
618
75
93
96
1,236
Transfers into so\ufb05ware and assets in course of construction includes $23m (2022: $nil) of so\ufb05ware transferred from property,
plant\u00a0and equipment. Group capital expenditure relating to so\ufb05ware contracted but not provided for amounted to $7m (2022: $7m).
Amortisation and impairment of acquisition intangibles is set out below:
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Technology
46
51
Product-related
150
142
Customer and distribution-related
11
12
Total
207
205
\n
In 2023, the Group impaired $37m of Engage\u2019s intangible assets as a result of the voluntary product discontinuation. In 2022,
$32m of\u00a0impairment charges were booked in relation to immaterial product assets in acquisition intangibles.
Management have assessed the acquisition intangible assets held by the Group to identify any indicators of impairment as of
September\u00a02023. These were updated during December to take into account any signi\ufb01cant events that occurred between September
and December. Where an impairment indicator has arisen, impairment reviews have been undertaken by comparing the expected
recoverable value of assets to the carrying value of assets.", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24260": { "value": "3
Operating pro\ufb01t
Accounting policy
Research and development
Research expenditure is expensed as incurred. Internal development expenditure is only capitalised if the recognition criteria in
IAS\u00a038
Intangible Assets
have been satis\ufb01ed. The Group considers that the regulatory, technical and market uncertainties inherent
in\u00a0the development of new products mean that in most cases development costs should not be capitalised as intangible assets
until\u00a0products receive approval from the appropriate regulatory body.
Payments to third parties for research and development projects are accounted for based on the substance of the arrangement.
If the\u00a0arrangement represents outsourced research and development activities the payments are generally expensed except
in limited circumstances where the respective development expenditure would be capitalised under the principles established
in\u00a0IAS\u00a038.\u00a0By contrast, the payments are capitalised if\u00a0the\u00a0arrangement represents consideration for the acquisition of intellectual
property developed at the risk of the third party.
Capitalised development expenditures are amortised on a straight-line basis over their useful economic lives from product launch.
Advertising costs
Advertising costs are expensed as incurred.
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
Operating pro\ufb01t is stated a\ufb05er charging/(crediting) the following items:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Other operating income
\u2013
(7)
(35)
Amortisation of intangible assets
221
229
237
Impairment of intangible assets\u00b9
37
39
2
Impairment of Engage's goodwill
84
\u2013
\u2013
Impairment of property, plant and equipment
31
30
1
Fair value remeasurement of trade investments
4
\u2013
1
Depreciation of property, plant and equipment
2
306
319
326
Loss on disposal of property, plant and equipment and intangible assets
18
11
14
Advertising costs
88
92
81
\n
1 The 2023 impairment of intangible assets includes Engage\u2019s intangible assets of $37m due to the voluntary product discontinuation.
2 The 2023 depreciation charge includes $54m (2022: $56m, 2021: $56m ) related to right-of-use assets.
In 2023, other operating income comprises insurance recoveries for ongoing metal-on-metal hip claims of $nil (2022: $7m, 2021: $35m).
In 2023, $nil (2022: $7m, 2021: $35m) of other operating income was included with\u00a0legal and other items, as explained in Note 2.6,
and\u00a0does not form part of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
3.1
Sta\ufb00 costs and employee numbers
Sta\ufb00 costs during the year amounted to:
\u00a0 \u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Wages and salaries
\u00a0
\u00a0
\u00a0
1,683
1,565
1,562
Social security costs
\u00a0
\u00a0
\u00a0
242
215
223
Pension costs (including retirement healthcare)
18
95
88
93
Share-based payments
22
39
40
41
\u00a0 \u00a0
\u00a0
\u00a0
2,059
1,908
1,919
\n
During the year ended 31 December 2023, the average number of employees was 19,081 (2022: 19,094, 2021: 18,976).
3.2
Audit Fees \u2013 information about the nature and cost of services provided by the auditor
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Audit services:
\u00a0 \u00a0 \u00a0
Group accounts
7.9
7.2
5.5
Local statutory audit pursuant to legislation
2.1
2.2
2.0
Other services:
\u00a0 \u00a0 \u00a0
Audit-related services
0.3
0.4
0.1
Total auditor\u2019s remuneration
10.3
9.8
7.6
Arising:
\u00a0 \u00a0 \u00a0
In the UK
6.0
5.3
3.5
Outside the UK
4.3
4.5
4.1
\u00a0
10.3
9.8
7.6
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24261": { "value": "3
Operating pro\ufb01t
Accounting policy
Research and development
Research expenditure is expensed as incurred. Internal development expenditure is only capitalised if the recognition criteria in
IAS\u00a038
Intangible Assets
have been satis\ufb01ed. The Group considers that the regulatory, technical and market uncertainties inherent
in\u00a0the development of new products mean that in most cases development costs should not be capitalised as intangible assets
until\u00a0products receive approval from the appropriate regulatory body.
Payments to third parties for research and development projects are accounted for based on the substance of the arrangement.
If the\u00a0arrangement represents outsourced research and development activities the payments are generally expensed except
in limited circumstances where the respective development expenditure would be capitalised under the principles established
in\u00a0IAS\u00a038.\u00a0By contrast, the payments are capitalised if\u00a0the\u00a0arrangement represents consideration for the acquisition of intellectual
property developed at the risk of the third party.
Capitalised development expenditures are amortised on a straight-line basis over their useful economic lives from product launch.
Advertising costs
Advertising costs are expensed as incurred.
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
Operating pro\ufb01t is stated a\ufb05er charging/(crediting) the following items:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Other operating income
\u2013
(7)
(35)
Amortisation of intangible assets
221
229
237
Impairment of intangible assets\u00b9
37
39
2
Impairment of Engage's goodwill
84
\u2013
\u2013
Impairment of property, plant and equipment
31
30
1
Fair value remeasurement of trade investments
4
\u2013
1
Depreciation of property, plant and equipment
2
306
319
326
Loss on disposal of property, plant and equipment and intangible assets
18
11
14
Advertising costs
88
92
81
\n
1 The 2023 impairment of intangible assets includes Engage\u2019s intangible assets of $37m due to the voluntary product discontinuation.
2 The 2023 depreciation charge includes $54m (2022: $56m, 2021: $56m ) related to right-of-use assets.
In 2023, other operating income comprises insurance recoveries for ongoing metal-on-metal hip claims of $nil (2022: $7m, 2021: $35m).
In 2023, $nil (2022: $7m, 2021: $35m) of other operating income was included with\u00a0legal and other items, as explained in Note 2.6,
and\u00a0does not form part of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
3.1
Sta\ufb00 costs and employee numbers
Sta\ufb00 costs during the year amounted to:
\u00a0 \u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Wages and salaries
\u00a0
\u00a0
\u00a0
1,683
1,565
1,562
Social security costs
\u00a0
\u00a0
\u00a0
242
215
223
Pension costs (including retirement healthcare)
18
95
88
93
Share-based payments
22
39
40
41
\u00a0 \u00a0
\u00a0
\u00a0
2,059
1,908
1,919
\n
During the year ended 31 December 2023, the average number of employees was 19,081 (2022: 19,094, 2021: 18,976).
3.2
Audit Fees \u2013 information about the nature and cost of services provided by the auditor
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Audit services:
\u00a0 \u00a0 \u00a0
Group accounts
7.9
7.2
5.5
Local statutory audit pursuant to legislation
2.1
2.2
2.0
Other services:
\u00a0 \u00a0 \u00a0
Audit-related services
0.3
0.4
0.1
Total auditor\u2019s remuneration
10.3
9.8
7.6
Arising:
\u00a0 \u00a0 \u00a0
In the UK
6.0
5.3
3.5
Outside the UK
4.3
4.5
4.1
\u00a0
10.3
9.8
7.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24262": { "value": "3
Operating pro\ufb01t
Accounting policy
Research and development
Research expenditure is expensed as incurred. Internal development expenditure is only capitalised if the recognition criteria in
IAS\u00a038
Intangible Assets
have been satis\ufb01ed. The Group considers that the regulatory, technical and market uncertainties inherent
in\u00a0the development of new products mean that in most cases development costs should not be capitalised as intangible assets
until\u00a0products receive approval from the appropriate regulatory body.
Payments to third parties for research and development projects are accounted for based on the substance of the arrangement.
If the\u00a0arrangement represents outsourced research and development activities the payments are generally expensed except
in limited circumstances where the respective development expenditure would be capitalised under the principles established
in\u00a0IAS\u00a038.\u00a0By contrast, the payments are capitalised if\u00a0the\u00a0arrangement represents consideration for the acquisition of intellectual
property developed at the risk of the third party.
Capitalised development expenditures are amortised on a straight-line basis over their useful economic lives from product launch.
Advertising costs
Advertising costs are expensed as incurred.
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
Operating pro\ufb01t is stated a\ufb05er charging/(crediting) the following items:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Other operating income
\u2013
(7)
(35)
Amortisation of intangible assets
221
229
237
Impairment of intangible assets\u00b9
37
39
2
Impairment of Engage's goodwill
84
\u2013
\u2013
Impairment of property, plant and equipment
31
30
1
Fair value remeasurement of trade investments
4
\u2013
1
Depreciation of property, plant and equipment
2
306
319
326
Loss on disposal of property, plant and equipment and intangible assets
18
11
14
Advertising costs
88
92
81
\n
1 The 2023 impairment of intangible assets includes Engage\u2019s intangible assets of $37m due to the voluntary product discontinuation.
2 The 2023 depreciation charge includes $54m (2022: $56m, 2021: $56m ) related to right-of-use assets.
In 2023, other operating income comprises insurance recoveries for ongoing metal-on-metal hip claims of $nil (2022: $7m, 2021: $35m).
In 2023, $nil (2022: $7m, 2021: $35m) of other operating income was included with\u00a0legal and other items, as explained in Note 2.6,
and\u00a0does not form part of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
3.1
Sta\ufb00 costs and employee numbers
Sta\ufb00 costs during the year amounted to:
\u00a0 \u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Wages and salaries
\u00a0
\u00a0
\u00a0
1,683
1,565
1,562
Social security costs
\u00a0
\u00a0
\u00a0
242
215
223
Pension costs (including retirement healthcare)
18
95
88
93
Share-based payments
22
39
40
41
\u00a0 \u00a0
\u00a0
\u00a0
2,059
1,908
1,919
\n
During the year ended 31 December 2023, the average number of employees was 19,081 (2022: 19,094, 2021: 18,976).
3.2
Audit Fees \u2013 information about the nature and cost of services provided by the auditor
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Audit services:
\u00a0 \u00a0 \u00a0
Group accounts
7.9
7.2
5.5
Local statutory audit pursuant to legislation
2.1
2.2
2.0
Other services:
\u00a0 \u00a0 \u00a0
Audit-related services
0.3
0.4
0.1
Total auditor\u2019s remuneration
10.3
9.8
7.6
Arising:
\u00a0 \u00a0 \u00a0
In the UK
6.0
5.3
3.5
Outside the UK
4.3
4.5
4.1
\u00a0
10.3
9.8
7.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24263": { "value": "3
Operating pro\ufb01t
Accounting policy
Research and development
Research expenditure is expensed as incurred. Internal development expenditure is only capitalised if the recognition criteria in
IAS\u00a038
Intangible Assets
have been satis\ufb01ed. The Group considers that the regulatory, technical and market uncertainties inherent
in\u00a0the development of new products mean that in most cases development costs should not be capitalised as intangible assets
until\u00a0products receive approval from the appropriate regulatory body.
Payments to third parties for research and development projects are accounted for based on the substance of the arrangement.
If the\u00a0arrangement represents outsourced research and development activities the payments are generally expensed except
in limited circumstances where the respective development expenditure would be capitalised under the principles established
in\u00a0IAS\u00a038.\u00a0By contrast, the payments are capitalised if\u00a0the\u00a0arrangement represents consideration for the acquisition of intellectual
property developed at the risk of the third party.
Capitalised development expenditures are amortised on a straight-line basis over their useful economic lives from product launch.
Advertising costs
Advertising costs are expensed as incurred.
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
Operating pro\ufb01t is stated a\ufb05er charging/(crediting) the following items:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Other operating income
\u2013
(7)
(35)
Amortisation of intangible assets
221
229
237
Impairment of intangible assets\u00b9
37
39
2
Impairment of Engage's goodwill
84
\u2013
\u2013
Impairment of property, plant and equipment
31
30
1
Fair value remeasurement of trade investments
4
\u2013
1
Depreciation of property, plant and equipment
2
306
319
326
Loss on disposal of property, plant and equipment and intangible assets
18
11
14
Advertising costs
88
92
81
\n
1 The 2023 impairment of intangible assets includes Engage\u2019s intangible assets of $37m due to the voluntary product discontinuation.
2 The 2023 depreciation charge includes $54m (2022: $56m, 2021: $56m ) related to right-of-use assets.
In 2023, other operating income comprises insurance recoveries for ongoing metal-on-metal hip claims of $nil (2022: $7m, 2021: $35m).
In 2023, $nil (2022: $7m, 2021: $35m) of other operating income was included with\u00a0legal and other items, as explained in Note 2.6,
and\u00a0does not form part of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.
3.1
Sta\ufb00 costs and employee numbers
Sta\ufb00 costs during the year amounted to:
\u00a0 \u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Wages and salaries
\u00a0
\u00a0
\u00a0
1,683
1,565
1,562
Social security costs
\u00a0
\u00a0
\u00a0
242
215
223
Pension costs (including retirement healthcare)
18
95
88
93
Share-based payments
22
39
40
41
\u00a0 \u00a0
\u00a0
\u00a0
2,059
1,908
1,919
\n
During the year ended 31 December 2023, the average number of employees was 19,081 (2022: 19,094, 2021: 18,976).
3.2
Audit Fees \u2013 information about the nature and cost of services provided by the auditor
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Audit services:
\u00a0 \u00a0 \u00a0
Group accounts
7.9
7.2
5.5
Local statutory audit pursuant to legislation
2.1
2.2
2.0
Other services:
\u00a0 \u00a0 \u00a0
Audit-related services
0.3
0.4
0.1
Total auditor\u2019s remuneration
10.3
9.8
7.6
Arising:
\u00a0 \u00a0 \u00a0
In the UK
6.0
5.3
3.5
Outside the UK
4.3
4.5
4.1
\u00a0
10.3
9.8
7.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24271": { "value": "Accounting policy
Research and development
Research expenditure is expensed as incurred. Internal development expenditure is only capitalised if the recognition criteria in
IAS\u00a038
Intangible Assets
have been satis\ufb01ed. The Group considers that the regulatory, technical and market uncertainties inherent
in\u00a0the development of new products mean that in most cases development costs should not be capitalised as intangible assets
until\u00a0products receive approval from the appropriate regulatory body.
Payments to third parties for research and development projects are accounted for based on the substance of the arrangement.
If the\u00a0arrangement represents outsourced research and development activities the payments are generally expensed except
in limited circumstances where the respective development expenditure would be capitalised under the principles established
in\u00a0IAS\u00a038.\u00a0By contrast, the payments are capitalised if\u00a0the\u00a0arrangement represents consideration for the acquisition of intellectual
property developed at the risk of the third party.
Capitalised development expenditures are amortised on a straight-line basis over their useful economic lives from product launch. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24326": { "value": "
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24327": { "value": "
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.The cost of inventories recognised as an expense and included in cost of goods sold amounted to $1,459m (2022: $1,302m, 2021:
$1,407m). In addition, $106m was recognised as an expense within cost of goods sold resulting from inventory write-o\ufb00s and provision
increases (2022: $117m, 2021: $105m).", "dimensions": { "concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24328": { "value": "
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Revenue
5,549
5,215
5,212
Cost of goods sold
1
(1,730)
(1,540)
(1,543)
Gross pro\ufb01t
3,819
3,675
3,669
Research and development expenses
2
(339)
(345)
(356)
Selling, general and administrative expenses:
\u00a0 \u00a0 \u00a0
Marketing, selling and distribution expenses
(2,218)
(2,066)
(2,013)
Administrative expenses
3,4,5,6
(837)
(814)
(707)
\u00a0
(3,055)
(2,880)
(2,720)
Operating pro\ufb01t
425
450
593
\n
1
2023 includes $27m charge relating to legal and other items, $73m charge relating to restructuring and rationalisation expenses and $3m charge relating to acquisition and disposal-related
items (2022 includes $4m charge relating to legal and other items, $20m charge relating to restructuring and rationalisation expenses and $5m charges relating to acquisition and disposal-
related items, 2021: $7m charge relating to legal and other items and $29m charge relating to restructuring and rationalisation expenses).
2
2023 includes $21m charge relating to legal and other items (2022: $35m, 2021: $39m), $1m charge relating to acquisition and disposal-related items (2022: $5m, 2021: $7m) and $18m
charge\u00a0relating to restructuring and rationalisation expenses (2022: $5m, 2021: $nil).
3
2023 includes $51m of amortisation of so\ufb05ware and other intangible assets (2022: $56m, 2021: $65m).
4
2023 includes $207m of amortisation and impairment of acquisition intangibles and $129m of restructuring and rationalisation expenses (2022: $205m of amortisation and impairment
of acquisition intangibles and $142m of restructuring and rationalisation expenses, 2021: $172m of amortisation and impairment of acquisition intangibles and $84m of restructuring
and\u00a0rationalisation expenses).
5
2023 includes $10m charge relating to legal and other items (2022: $36m charge, 2021: $5m charge).
6
2023 includes $56m charge relating to acquisition and disposal-related items (2022: $6m credit, 2021: $nil).
Note that items detailed in 1, 2, 4, 5 and 6 are excluded from the calculation of trading pro\ufb01t, the segments\u2019 pro\ufb01t measure.", "dimensions": { "concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24460": { "value": "Operating pro\ufb01t is stated a\ufb05er charging/(crediting) the following items:
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Other operating income
\u2013
(7)
(35)
Amortisation of intangible assets
221
229
237
Impairment of intangible assets\u00b9
37
39
2
Impairment of Engage's goodwill
84
\u2013
\u2013
Impairment of property, plant and equipment
31
30
1
Fair value remeasurement of trade investments
4
\u2013
1
Depreciation of property, plant and equipment
2
306
319
326
Loss on disposal of property, plant and equipment and intangible assets
18
11
14
Advertising costs
88
92
81
\n
1 The 2023 impairment of intangible assets includes Engage\u2019s intangible assets of $37m due to the voluntary product discontinuation.
2 The 2023 depreciation charge includes $54m (2022: $56m, 2021: $56m ) related to right-of-use assets. ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24617": { "value": "3.1
Sta\ufb00 costs and employee numbers
Sta\ufb00 costs during the year amounted to:
\u00a0 \u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Wages and salaries
\u00a0
\u00a0
\u00a0
1,683
1,565
1,562
Social security costs
\u00a0
\u00a0
\u00a0
242
215
223
Pension costs (including retirement healthcare)
18
95
88
93
Share-based payments
22
39
40
41
\u00a0 \u00a0
\u00a0
\u00a0
2,059
1,908
1,919
\nDuring the year ended 31 December 2023, the average number of employees was 19,081 (2022: 19,094, 2021: 18,976).", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24618": { "value": "3.1
Sta\ufb00 costs and employee numbers
Sta\ufb00 costs during the year amounted to:
\u00a0 \u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Wages and salaries
\u00a0
\u00a0
\u00a0
1,683
1,565
1,562
Social security costs
\u00a0
\u00a0
\u00a0
242
215
223
Pension costs (including retirement healthcare)
18
95
88
93
Share-based payments
22
39
40
41
\u00a0 \u00a0
\u00a0
\u00a0
2,059
1,908
1,919
\nDuring the year ended 31 December 2023, the average number of employees was 19,081 (2022: 19,094, 2021: 18,976).18
Retirement bene\ufb01t obligations
Accounting policy
The Group sponsors de\ufb01ned bene\ufb01t plans in a number of countries. A de\ufb01ned bene\ufb01t pension plan de\ufb01nes an amount of pension
bene\ufb01t that an employee will receive on retirement or a minimum guaranteed return on contributions, which is dependent on various
factors such as age, years of service and \ufb01nal salary. The Group\u2019s obligation is calculated separately for each plan by discounting
the\u00a0estimated future bene\ufb01t that employees have\u00a0earned in return for their service in the current and prior periods. The fair value
of\u00a0any plan assets is deducted to arrive at the net liability.
The calculation of the de\ufb01ned bene\ufb01t obligation is performed annually by external actuaries using the projected unit credit method.
Remeasurements arising from de\ufb01ned bene\ufb01t plans comprise actuarial gains and losses and the return on the plan assets in excess
of the discount rate net of the costs of\u00a0managing the plan assets. The Group recognises these immediately in other comprehensive
income (OCI) and all other expenses, such as service cost, net interest cost, administration costs and taxes, are recognised in the
income statement.
A number of key assumptions are made when calculating the fair value of the Group\u2019s de\ufb01ned bene\ufb01t pension plans. These
assumptions impact the balance sheet asset and liabilities, operating pro\ufb01t, \ufb01nance income/costs and other comprehensive income.
The most critical assumptions are the discount rate, the rate of in\ufb02ation and mortality assumptions to be applied to future pension
plan liabilities. The discount rate is based on the yield at the reporting date on bonds that have a credit rating of AA, denominated
in the currency in which the bene\ufb01ts are expected to be paid and have a maturity pro\ufb01le approximately the same as the\u00a0Group\u2019s
obligations. In determining these assumptions management takes into account the advice of professional external actuaries
and\u00a0benchmarks its assumptions against external data.
The Group determines the net interest expense/income on the net de\ufb01ned bene\ufb01t liability/asset for the period by applying the
discount rate used to\u00a0measure the de\ufb01ned bene\ufb01t obligation at the beginning of the annual period to the net de\ufb01ned bene\ufb01t
liability/asset.
The Group also operates a number of de\ufb01ned contribution plans. A de\ufb01ned contribution plan is a pension plan under which the
Group\u00a0and employees pay \ufb01xed contributions to a third-party \ufb01nancial provider. The Group has no further payment obligations
once\u00a0the contributions have\u00a0been\u00a0paid. Contributions are recognised as an employee bene\ufb01t expense when they are due.
The Group\u2019s retirement bene\ufb01t assets/(obligations) comprise:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
Funded plans:
\u00a0 \u00a0
UK Plan
61
114
US Plan
8
24
Other plans
(13)
(5)
\u00a0
56
133
Unfunded plans:
\u00a0 \u00a0
Other plans
(65)
(52)
Retirement healthcare
(10)
(10)
\u00a0
(19)
71
Amount recognised on the balance sheet\u00a0\u2013 liability
(88)
(70)
Amount recognised on the balance sheet\u00a0\u2013 asset
69
141
\n
The Group sponsors de\ufb01ned bene\ufb01t pension plans for its employees or former employees in 13 countries and these are established
under the laws of the relevant country. Funded plans are funded by the payment of contributions and the assets are held by separate
trust funds or insurance companies. The provision of retirement and related bene\ufb01ts across the Group is kept under regular review.
Employees\u2019 retirement bene\ufb01ts are the subject of regular management review. The Group\u2019s de\ufb01ned bene\ufb01t plans provide employees
with an entitlement to bene\ufb01ts, payable typically either as a lump sum or annuity, or a mixture of the two. Most plans are now closed
to future accrual. The level of entitlement is typically dependent on the salary and years of service of the employee, in line with local
practices. Pension bene\ufb01ts are generally limited to 66.7% of \ufb01nal salary in key markets.
The Group\u2019s two major de\ufb01ned bene\ufb01t pension plans are in the UK and US. Both these plans were closed to new employees in 2003
and\u00a0de\ufb01ned contribution plans are o\ufb00ered to new joiners. The US and UK Plans were closed to future accrual in March 2014 and
December 2016 respectively.
The UK Plan operates under trust law and responsibility for its governance lies with a Board of Trustees. This Board is composed of
representatives of the Group, plan participants and an independent trustee, who act on behalf of members in accordance with the
terms\u00a0of\u00a0the Trust Deed and Rules and relevant legislation. The UK Plan\u2019s assets are held by the trust. Annual increases on bene\ufb01ts
in\u00a0payment are\u00a0dependent on in\ufb02ation.
The 2018 and 2020 court cases in relation to Guaranteed Minimum Pensions do not impact the UK Plan as members were not
contracted out of\u00a0the State Earnings-Related Pension Scheme (SERPS) between 1990 and 1997.
In June 2023, the Trustee with the support of the Company concluded a full buy-in of the Main Fund with Rothesay Life. The total
transaction value was \u00a3260m. The transaction completed the Main Fund and Executive Scheme de-risking journey which included
partial buy-in transactions in 2013, 2017, and 2022, whereby the liabilities of the scheme are now covered by a bulk annuity insurance
policy, that operate as investment assets, insuring all liabilities to pay all future de\ufb01ned bene\ufb01t pensions for the remaining members
of the Fund. The bulk annuity policy matches the Trust\u2019s cash \ufb02ow bene\ufb01t obligations to its members, removing longevity and other
demographic risks as well as investment, interest rate and in\ufb02ation risks.
When the full UK Fund buy-in was concluded in June 2023 no decision on a future buy-out had been reached by the Company.
Whilst the\u00a0contract between the Life Insurer (Rothesay) and the Trustee allows for a buy-out, a number of steps would need to be
concluded before this could be achieved. Not least, the conclusion of the due diligence process with the Life Insurer which is expected
to continue into the second half of 2024. Therea\ufb05er, the Trustee and the Company could not act unilaterally to move to a buy-out and
the UK Fund governance structure lays out a number of steps the Company would be required to conclude for a buy-out decision.
The transaction resulted in a $58m loss being recognised in OCI with $nil cash impact.
The US Plan is governed by a US Pension Committee which comprises representatives of the Group. In the US, the Pension Protection
Act (2006) established both a minimum required contribution and a maximum deductible contribution. Failure to contribute at least
the\u00a0minimum required amount will subject the Company to signi\ufb01cant penalties, and contributions in excess of the maximum deductible
have negative tax consequences. The minimum funding requirement is intended to fully fund the present value of accrued bene\ufb01ts
over\u00a0seven years.
In October 2022, US Pension Plan members were noti\ufb01ed that Smith & Nephew Inc. (SNI) would begin the termination process for the
US\u00a0Plan. In December 2023, Fidelity & Guaranty Life was selected to take over responsibility for the remaining US Pension Plan obligation
and administration upon termination. A premium amount of $245m was paid in cash by the US Plan on 4 January 2024. Certain active
employees and terminated vested participants elected to receive a lump sum in exchange for their plan bene\ufb01t of $80m. This resulted
in $4m settlement costs which were recognised in 2023, representing the di\ufb00erence between de\ufb01ned bene\ufb01t obligation (DBO) and the
lump sums paid to members in December 2023. Following this transaction, members move to having a direct relationship with Fidelity &
Guaranty Life with SNI no longer retaining any obligation for the settlement of accrued member bene\ufb01ts following a short administrative
transition and due diligence process.
There is no legislative minimum funding requirement in the UK. The Trust Deed of the UK Plan and the Plan Document of the US Plan
provide the Group with a right to a refund of surplus assets assuming the full settlement of plan liabilities in the event of a plan wind-up.
Furthermore, in the ordinary course of business the UK Board of Trustees and US Pension Committee have no rights to unilaterally wind
up, or otherwise augment the bene\ufb01ts due to members of the Plans. Based on these rights, any net surplus in the UK and US Plans
is\u00a0recognised in full.
18.2
Reconciliation of retirement bene\ufb01t obligations and pension assets
The movement in the Group\u2019s pension bene\ufb01t obligation and pension assets is as follows:
2023
2022\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Obligation\u00a0
\u00a0
Asset\u00a0
\u00a0
Total\u00a0
\u00a0
Obligation
Asset
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Amounts recognised on the balance sheet at
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
beginning of the period
\u00a0
(984)\u00a0
1,055
71
(1,582)\u00a0
1,637
55
Income statement expense:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Current service cost
\u00a0
(6)
\u2013
(6)
\u00a0
(9)
\u2013
\u00a0
(9)
Settlements
75
(79)
(4)
4
(4)
\u2013
Interest (expense)/income
\u00a0
(45)
49
4
\u00a0
(29)
30
\u00a0
1
Administration costs and taxes
(5)
\u2013
(5)
\u00a0
(3)
\u2013
\u00a0
(3)
Costs recognised in income statement
\u00a0
19
\u00a0
(30)
\u00a0
(11)
\u00a0
(37)
\u00a0
26
\u00a0
(11)
Remeasurements:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Actuarial (loss)/gain due to liability experience
\u00a0
(14)
\u2013
(14)
\u00a0
(43)
\u2013
\u00a0
(43)
Actuarial gain due to \ufb01nancial assumptions
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
change
\u00a0
(25)
\u2013
(25)
\u00a0
503
\u2013
\u00a0
503
Actuarial gain due to demographic assumptions\u00a0
14
\u2013
14
\u00a0
1
\u2013
\u00a0
1
Return on plan assets (less)/greater than
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
discount rate
\u00a0
\u2013
(64)
(64)
\u00a0
\u2013
(431)
\u00a0
(431)
Remeasurements recognised in OCI
\u00a0
(25)
\u00a0
(64)
\u00a0
(89)
\u00a0
461
\u00a0
(431)
\u00a0
30
Cash:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Employer contributions
\u00a0
\u2013
7
7
\u00a0
\u2013
6
\u00a0
6
Employee contributions
\u00a0
(3)
3
\u2013
\u00a0
(3)
3
\u00a0
\u2013
Bene\ufb01ts paid directly by the Group
\u00a0
2
\u2013
2
\u00a0
2
\u2013
\u00a0
2
Bene\ufb01ts paid, taxes and administration costs
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
paid from scheme assets
\u00a0
67
(69)
(2)
\u00a0
81
(83)
\u00a0
(2)
Net cash
\u00a0
66
\u00a0
(59)
\u00a0
7
\u00a0
80
\u00a0
(74)
\u00a0
6
Exchange movements
\u00a0
(37)
40
3
\u00a0
94
(103)
\u00a0
(9)
Amount recognised on the balance sheet
\u00a0
(961)
\u00a0
942
\u00a0
(19)
\u00a0
(984)
\u00a0
1,055
\u00a0
71
Amount recognised on the balance sheet\u00a0\u2013
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
liability
\u00a0
(229)
141
(88)
\u00a0
(194)
124
\u00a0
(70)
Amount recognised on the balance sheet\u00a0\u2013
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
asset
\u00a0
(732)
801
69
\u00a0
(790)
931
\u00a0
141
Represented by:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0
2023
\u00a0 \u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
Obligation\u00a0
\u00a0
Asset\u00a0
\u00a0
Total\u00a0
\u00a0
Obligation\u00a0
\u00a0
Asset\u00a0
\u00a0
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
UK Plan
(457)
518
61
(438)
552
114
US Plan
(259)
267
8
(336)
360
24
Other Plans
(245)
157
(88)
(210)
143
(67)
Total
(961)
942
(19)
(984)
1,055
71
\n
The actuarial loss on obligation of $25m primarily relates to the decrease in discount rates in 2023 compared to 2022 and the actuarial
loss from the return on plan assets of $64m is mainly due to the impact of UK Plan buy-in.
All bene\ufb01ts are vested at the end of each reporting period. The weighted average duration of the de\ufb01ned bene\ufb01t obligation at the
end\u00a0of\u00a0the reporting period is 14 years and 9 years for the UK and US Plans respectively.
18.3
Plan assets
The market value of the US, UK and Other Plans assets are as follows:
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
UK Plan:
\u00a0 \u00a0 \u00a0
Assets with a quoted market price:
\u00a0 \u00a0 \u00a0
Cash and cash equivalents
61
2
4
Equity securities
\u2013
3
84
Other bonds
\u2013
30
50
Short dated credit fund
\u2013
81
126
Liability driven investments
\u2013
225
370
Diversi\ufb01ed growth funds
\u2013
55
89
\u00a0
61
396
723
Other assets:
\u00a0 \u00a0 \u00a0
Insurance contract
457
156
233
Market value of assets
518
552
956
US Plan:
\u00a0 \u00a0 \u00a0
Assets with a quoted market price:
\u00a0 \u00a0 \u00a0
Cash and cash equivalents
267
120
6
Equity securities
\u2013
\u2013
50
Government bonds\u00a0\u2013 \ufb01xed interest
\u2013
43
201
Corporate bonds
\u2013
197
246
Market value of assets
267
360
503
Other Plans:
\u00a0 \u00a0 \u00a0
Assets with a quoted market price:
\u00a0 \u00a0 \u00a0
Cash and cash equivalents
7
7
5
Equity securities
50
49
55
Government bonds\u00a0\u2013 \ufb01xed interest
5
7
5
Government bonds\u00a0\u2013 index linked
\u2013
\u2013
4
Corporate and other bonds
10
10
11
Insurance contracts
23
21
33
Property
28
22
23
Other quoted securities
10
5
8
\u00a0
133
121
144
Other assets:
\u00a0 \u00a0 \u00a0
Insurance contracts
24
22
34
Market value of assets
157
143
178
Total market value of assets
942
1,055
1,637
\n
No plans invest directly in property occupied by the Group or in \ufb01nancial securities issued by the Group.
Both the UK and US Plans hold predominantly matching assets. The UK Plan is comprised of annuity policies purchased by the Trustee.
The US Plan in 2023 held predominantly matching assets. In 2024, following the scheme termination, the investment risks have been
transferred to a US Life Insurer.
18.4
Expenses recognised in the income statement
The total expense relating to retirement bene\ufb01ts recognised for the year is $95m (2022: $88m, 2021: $93m). Of this cost recognised
for\u00a0the year, $84m (2022: $77m, 2021: $77m) relates to de\ufb01ned contribution plans and $11m (2022: $11m, 2021: $16m) relates to
de\ufb01ned\u00a0bene\ufb01t plans.
The cost charged in respect of the Group\u2019s de\ufb01ned contribution plans represents contributions payable to these plans by the Group at
rates speci\ufb01ed in the rules of the Plans. These were charged to operating pro\ufb01t in costs of goods sold, selling, general and administrative
expenses, and research and development expenses. There were $nil outstanding payments as at\u00a031 December 2023 due to be paid
over\u00a0to the Plans (2022: $nil, 2021: $nil).
De\ufb01ned bene\ufb01t plan costs comprise service cost which is charged to operating pro\ufb01t in selling, general and administrative expenses
and\u00a0net interest cost and administration costs and taxes which are reported as other \ufb01nance costs.
The de\ufb01ned bene\ufb01t pension costs charged for the UK and US Plans are $nil (2022: $nil, 2021: $nil).
18.5
Principal actuarial assumptions
The following are the principal \ufb01nancial actuarial assumptions used at the reporting date to determine the UK and US de\ufb01ned bene\ufb01t
obligations and expense.
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
%\u00a0per\u00a0annum
\u00a0
\u00a0
\u00a0
\u00a0
%\u00a0per\u00a0annum
\u00a0
\u00a0
\u00a0
\u00a0
%\u00a0per\u00a0annum
UK Plan:
\u00a0 \u00a0 \u00a0
Discount rate
4.5
4.8
1.9
Future salary increases
n/a
n/a
n/a
Future pension increases
3.0
3.3
3.4
In\ufb02ation (RPI)
3.1
3.3
3.4
In\ufb02ation (CPI)
2.5
2.3
2.7
US Plan:
\u00a0 \u00a0 \u00a0
Discount rate
5.0
5.3
2.7
Future salary increases
n/a
n/a
n/a
In\ufb02ation
n/a
n/a
n/a
\n
Actuarial assumptions regarding future mortality are based on mortality tables. The UK uses the S3NA with projections in line with
the\u00a0CMI 2022 table, which places partial weight on post pandemic experience, and the US uses the PRI-2012 table with MP-2021 scale.
The Directors will continue to monitor any potential future impact on the mortality assumptions used.
The current longevities underlying the values of the obligations in the de\ufb01ned bene\ufb01t plans are as follows:
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
years\u00a0
\u00a0
\u00a0
\u00a0
years\u00a0
\u00a0
\u00a0
\u00a0
years
Life expectancy at age 60
\u00a0 \u00a0 \u00a0
UK Plan:
\u00a0 \u00a0 \u00a0
Males
26.9
27.4
27.6
Females
29.7
30.1
30.1
US Plan:
\u00a0 \u00a0 \u00a0
Males
25.0
24.9
24.7
Females
27.2
27.1
26.8
Life expectancy at age 60 in 20\u00a0years\u2019 time
\u00a0 \u00a0 \u00a0
UK Plan:
\u00a0 \u00a0 \u00a0
Males
28.4
28.9
29.1
Females
31.1
31.5
31.5
US Plan:
\u00a0 \u00a0 \u00a0
Males
25.0
24.9
24.6
Females
27.6
27.6
27.3
18.6
Sensitivity analysis
The calculation of the de\ufb01ned bene\ufb01t obligation is sensitive to the assumptions used. The following table summarises the increase/
decrease on the\u00a0UK and US de\ufb01ned bene\ufb01t obligation and pension costs as a result of reasonably possible changes in some of the
assumptions while holding all other assumptions consistent. The sensitivity to the in\ufb02ation assumption change includes corresponding
changes to the future pension increase assumptions. The analysis does not take into account the full distribution of cash \ufb02ows expected
under the Plan.
Changes to the in\ufb02ation assumption will not have any e\ufb00ect on the US Pension Plan as it was closed to future accrual in 2014 and it has
no other in\ufb02ation-linked assumptions.
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0\u00a0
Increase/(decrease) in pension
\u00a0
Increase /(decrease) in pension
\u00a0 \u00a0
obligation
\u00a0
cost
$ million
\u00a0
\u00a0
\u00a0
\u00a0
+50bps/+1yr\u00a0
\u00a0
\u00a0
\u00a0
-50bps/-1yr\u00a0
\u00a0
\u00a0
\u00a0
+50bps/+1 yr
\u00a0
\u00a0
\u00a0
\u00a0
-50bps/-1yr
UK Plan:
\u00a0 \u00a0 \u00a0 \u00a0
Discount rate
\u00a0
(29.0)
33.0
\u2013
\u2013
In\ufb02ation
\u00a0
21.0
(24.0)
\u2013
\u2013
Mortality
\u00a0
18.0
(11.0)
\u2013
\u2013
US Plan:
\u00a0 \u00a0 \u00a0 \u00a0
Discount rate
\u00a0
(10.0)
11.0
\u2013
\u2013
Mortality
\u00a0
8.0
(8.0)
\u2013
\u2013
\n
18.7
Risk
The pension plans expose the Group to the following risks:
\n \n
Interest rate risk
Volatility in \ufb01nancial markets can change the calculations of the obligation signi\ufb01cantly as the calculation
of\u00a0the obligation is linked to yields on AA rated corporate bonds. A decrease in the bond yield will increase
the measure of\u00a0plan liabilities, although this will be partially o\ufb00set by increases in the value of\u00a0matching
plan assets such as bonds and insurance contracts.
The UK buy-in in June 2023 removed all remaining material pension liability exposure from the balance
sheet, hence, eliminating the interest rate risk for the UK Plan. Following the completion of the US buy-out
on 4 January 2024, no further interest risk is linked to the valuation of liability for the US Plan as no liability
will remain in the Plan.
In\ufb02ation risk
The UK Plan is linked to in\ufb02ation. A high rate of in\ufb02ation will lead to a higher liability. This risk is managed
by holding in\ufb02ation-linked bonds and an in\ufb02ation-linked insurance contract in respect of some of the
obligation. In the UK, the liability matching portfolio held in conventional and index-linked gilts was
transferred into liability driven investments in\u00a0order to reduce in\ufb02ation risk.
The UK Plan is closed to future accrual which reduces the exposure to this risk. The US Plan is also closed to
future accrual and has no other in\ufb02ation-linkage thus eliminating the exposure to this risk. Following the full
UK Pension buy-in in 2023, the residual in\ufb02ation risks associated with the UK Plan have been transferred to
the UK Plan\u2019s Life Insurance Partners.
Investment risk
If the return on plan assets is below the discount rate, all else being equal, there will be an increase
in\u00a0the\u00a0Plan de\ufb01cit.
In the UK, following the full buy-in for the UK Plan, the investment risk has been transferred to the UK
Plan\u2019s Life Insurer Partners.
The US Plan has a dynamic de-risking policy to shi\ufb05 plan assets from return-seeking (growth) assets to
liability matching assets over time. The US Pension Plan has an established glide path that is designed to
stabilise funding status by reducing the Plan\u2019s exposure to return-seeking assets. Following the completion
of the US buy-out on 4 January 2024, no further investment risk is linked to the valuation of liability for the
US Plan as no liability will remain in the Plan.
Longevity risk
The present value of the Plan\u2019s de\ufb01ned bene\ufb01t liability is calculated by reference to the best estimate
of the mortality of the Plan participants both during and a\ufb05er their employment. An increase in the life
expectancy of plan participants above that assumed will increase the bene\ufb01t obligation.
Following the full buy-in, the UK Plan has entered into insurance contract which covers all of the
pensioners\u2019 obligations.
Following the completion of the US buy-out on 4 January 2024, there is no further longevity risk linked to
the valuation of liability for the US Plan as no liability will remain in the Plan.
18.8
Funding
A full valuation is performed by actuaries for the Trustees/Pension Committee of each plan to determine the level of funding required.
Employer contribution rates, based on these full valuations, are agreed between the Trustees/Pension Committee of each plan and
the Group. The assumptions used in the actuarial valuations used for funding purposes may di\ufb00er from the accounting assumptions
set\u00a0out above.
UK Plan
The most recent full actuarial valuation of the UK Plan was undertaken as at 30 September 2020. Future accruals to the UK Plan ceased
as at 31 December 2016. Contributions to the UK Plan in 2023 were $nil (2022: $nil, 2021: $7m). This included supplementary payments
of\u00a0$nil (2022: $nil, 2021: $7m).
Following the completion of the 30 September 2020 valuation, a dynamic contribution mechanism was agreed. Under that dynamic
contribution mechanism, no further contributions were required in 2022 or 2023.
In 2023, the Trustees concluded a full buy-in of the UK De\ufb01ned Bene\ufb01t Fund. The transaction resulted in a $58m loss being
recognised in OCI with $nil cash impact. Following the conclusion of the UK full buy-in, no further contributions are expected
from the sponsor company.
US Plan
The most recent full actuarial valuation of the US Plan was undertaken as at 1 January 2022. Future accruals to the US Plan ceased as
at\u00a031 March 2014. Contributions to the US Plan were $nil (2022: $nil, 2021:\u00a0$nil) which represented supplementary payments of $nil
(2022: $nil, 2021: $nil).
There are no planned supplementary contributions to the US Plan for 2024.
A premium amount of $245m was paid in cash by the US Plan on 4 January 2024 to settle the annuity purchase agreement with Fidelity
& Guaranty Life. $4m of settlement costs were accounted for in 2023 and are linked to the lump sum payments settled in December
2023 of $80m. A $2m credit will be recorded in 2024 linked to the annuity purchase contract concluded with Fidelity & Guaranty Life
on\u00a04 January 2024.22.1
Share-based payments
Accounting policy
The Group operates a number of equity-settled executive and employee share plans. For all grants of share options and awards,
the\u00a0fair value at the grant date is calculated using appropriate option pricing models. The grant date fair value is recognised over
the\u00a0vesting period as an expense, with a corresponding increase in retained earnings.
The Group operates the following equity-settled executive and employee share plans: Smith & Nephew Global Share Plan 2010,
Smith & Nephew Global Share Plan 2020, Smith & Nephew Share Save Plan (2012) and Smith & Nephew International Share
Save Plan\u00a0(2012). At 31 December 2023, 5,138,000 options (2022: 5,202,000, 2021: 4,472,000) were outstanding with a range
of\u00a0exercise\u00a0prices\u00a0from 843\u00a0to 1,541 pence.
At 31 December 2023, the maximum number of shares that could be awarded under the Group\u2019s long-term incentive plans was
8,452,000 (2022: 7,371,000, 2021: 5,997,000). These include conditional share awards granted to senior employees and equity
and\u00a0performance share awards granted to senior executives under the Global Share Plan 2010 and Global Share Plan 2020.
The expense charged to the income statement for share-based payments for the year is $39m (2022: $40m, 2021: $41m).
22.2
Related party transactions
Trading transactions
In the course of normal operations, the Group traded with its associates detailed in Note 11. The aggregated transactions,
which\u00a0have not been disclosed elsewhere in the \ufb01nancial statements, are $nil (2022: $nil, 2021: $nil).
Key management personnel
The remuneration of Executive O\ufb03cers (including Non-Executive Directors) during the year is summarised below:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Short-term employee bene\ufb01ts
21
17
16
Share-based payments expense
9
10
7
Pension and post-employment bene\ufb01t entitlements
1
2
1
\u00a0
31
29
24
\n
Directors\u2019 remuneration disclosures are included on pages 121\u2013154.
Retirement bene\ufb01t schemes
Details of the Group\u2019s retirement bene\ufb01t schemes are set out in Note 18.", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24719": { "value": "3.2
Audit Fees \u2013 information about the nature and cost of services provided by the auditor
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Audit services:
\u00a0 \u00a0 \u00a0
Group accounts
7.9
7.2
5.5
Local statutory audit pursuant to legislation
2.1
2.2
2.0
Other services:
\u00a0 \u00a0 \u00a0
Audit-related services
0.3
0.4
0.1
Total auditor\u2019s remuneration
10.3
9.8
7.6
Arising:
\u00a0 \u00a0 \u00a0
In the UK
6.0
5.3
3.5
Outside the UK
4.3
4.5
4.1
\u00a0
10.3
9.8
7.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24832": { "value": "4
Interest and other \ufb01nance costs
4.1
Interest income/(expense)
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Interest income
34
14
6
Interest expense:
\u00a0 \u00a0 \u00a0
Bank borrowings
(10)
(3)
(3)
Private placement notes
(38)
(39)
(46)
Lease liabilities
(8)
(6)
(7)
Corporate bond
(46)
(27)
(21)
Other\u00b9
(30)
(5)
(3)
\u00a0
(132)
(80)
(80)
Net interest expense
(98)
(66)
(74)
\n
1
Other interest expenses included mainly swap interest expenses in 2023.
4.2
Other \ufb01nance costs
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
2023
\u00a0\u00a0\u00a0
2022
\u00a0\u00a0\u00a0
2021
\u00a0\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
Retirement bene\ufb01t net interest expense
\u00a0\u00a0\u00a0\u00a0
18
\u00a0\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(2)
\u00a0\u00a0
(3)
\u00a0\u00a0
Unwinding of discount
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
(6)
\u00a0\u00a0\u00a0
(9)
\u00a0\u00a0
(10)
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
3
\u00a0\u00a0
(4)
\u00a0\u00a0
Other \ufb01nance costs
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
(7)
\u00a0\u00a0\u00a0
(8)
\u00a0\u00a0
(17)
\u00a0\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24833": { "value": "4
Interest and other \ufb01nance costs
4.1
Interest income/(expense)
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Interest income
34
14
6
Interest expense:
\u00a0 \u00a0 \u00a0
Bank borrowings
(10)
(3)
(3)
Private placement notes
(38)
(39)
(46)
Lease liabilities
(8)
(6)
(7)
Corporate bond
(46)
(27)
(21)
Other\u00b9
(30)
(5)
(3)
\u00a0
(132)
(80)
(80)
Net interest expense
(98)
(66)
(74)
\n
1
Other interest expenses included mainly swap interest expenses in 2023.
4.2
Other \ufb01nance costs
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
2023
\u00a0\u00a0\u00a0
2022
\u00a0\u00a0\u00a0
2021
\u00a0\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
Retirement bene\ufb01t net interest expense
\u00a0\u00a0\u00a0\u00a0
18
\u00a0\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(2)
\u00a0\u00a0
(3)
\u00a0\u00a0
Unwinding of discount
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
(6)
\u00a0\u00a0\u00a0
(9)
\u00a0\u00a0
(10)
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
3
\u00a0\u00a0
(4)
\u00a0\u00a0
Other \ufb01nance costs
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
(7)
\u00a0\u00a0\u00a0
(8)
\u00a0\u00a0
(17)
\u00a0\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24834": { "value": "4
Interest and other \ufb01nance costs
4.1
Interest income/(expense)
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Interest income
34
14
6
Interest expense:
\u00a0 \u00a0 \u00a0
Bank borrowings
(10)
(3)
(3)
Private placement notes
(38)
(39)
(46)
Lease liabilities
(8)
(6)
(7)
Corporate bond
(46)
(27)
(21)
Other\u00b9
(30)
(5)
(3)
\u00a0
(132)
(80)
(80)
Net interest expense
(98)
(66)
(74)
\n
1
Other interest expenses included mainly swap interest expenses in 2023.
4.2
Other \ufb01nance costs
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
2023
\u00a0\u00a0\u00a0
2022
\u00a0\u00a0\u00a0
2021
\u00a0\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
Retirement bene\ufb01t net interest expense
\u00a0\u00a0\u00a0\u00a0
18
\u00a0\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(2)
\u00a0\u00a0
(3)
\u00a0\u00a0
Unwinding of discount
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
(6)
\u00a0\u00a0\u00a0
(9)
\u00a0\u00a0
(10)
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
3
\u00a0\u00a0
(4)
\u00a0\u00a0
Other \ufb01nance costs
\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
(7)
\u00a0\u00a0\u00a0
(8)
\u00a0\u00a0
(17)
\u00a0\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24840": { "value": "4.1
Interest income/(expense)
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Interest income
34
14
6
Interest expense:
\u00a0 \u00a0 \u00a0
Bank borrowings
(10)
(3)
(3)
Private placement notes
(38)
(39)
(46)
Lease liabilities
(8)
(6)
(7)
Corporate bond
(46)
(27)
(21)
Other\u00b9
(30)
(5)
(3)
\u00a0
(132)
(80)
(80)
Net interest expense
(98)
(66)
(74)
\n
1
Other interest expenses included mainly swap interest expenses in 2023.", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24841": { "value": "4.1
Interest income/(expense)
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Interest income
34
14
6
Interest expense:
\u00a0 \u00a0 \u00a0
Bank borrowings
(10)
(3)
(3)
Private placement notes
(38)
(39)
(46)
Lease liabilities
(8)
(6)
(7)
Corporate bond
(46)
(27)
(21)
Other\u00b9
(30)
(5)
(3)
\u00a0
(132)
(80)
(80)
Net interest expense
(98)
(66)
(74)
\n
1
Other interest expenses included mainly swap interest expenses in 2023.", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f24842": { "value": "4.1
Interest income/(expense)
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Interest income
34
14
6
Interest expense:
\u00a0 \u00a0 \u00a0
Bank borrowings
(10)
(3)
(3)
Private placement notes
(38)
(39)
(46)
Lease liabilities
(8)
(6)
(7)
Corporate bond
(46)
(27)
(21)
Other\u00b9
(30)
(5)
(3)
\u00a0
(132)
(80)
(80)
Net interest expense
(98)
(66)
(74)
\n
1
Other interest expenses included mainly swap interest expenses in 2023.", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f25159": { "value": "5
Taxation
Accounting policy
The charge for current taxation is based on the results for the year as adjusted for items which are non-assessable or non-deductible.
It is calculated using tax rates that have been enacted or substantively enacted as at the balance sheet date.
The Group operates in numerous tax jurisdictions around the world. At any given time, the Group typically is involved in tax audits
and other disputes and will have other tax returns potentially subject to audit. Signi\ufb01cant issues may take several years to resolve.
In estimating the probability and amount of any tax charge, management takes into account the views of internal and external
advisers and updates the amount of tax provision where considered appropriate. The ultimate tax liability may di\ufb00er from the
amount\u00a0provided depending on factors including interpretations of\u00a0tax law and settlement negotiations.
Deferred tax is recognised in respect of temporary di\ufb00erences between the carrying amounts of assets and liabilities for \ufb01nancial
reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised: for temporary di\ufb00erences related to investments in subsidiaries and associates where the Group is
able to control the timing of the reversal of the temporary di\ufb00erence and it is probable that this will not reverse in the foreseeable
future; on the initial recognition of non-deductible goodwill; and on the initial recognition of an asset or liability in a transaction that
is\u00a0not a business combination and that, at the time of the transaction, does not a\ufb00ect the accounting or taxable pro\ufb01t.
Deferred tax assets are recognised to the extent that it is probable that future taxable pro\ufb01ts will be available against which they
can\u00a0be used. Deferred tax assets are reviewed at each reporting date taking into account the recoverability of the deferred tax assets,
future pro\ufb01tability and any restrictions on use. The Group considers available evidence to assess future pro\ufb01tability over a reasonably
foreseeable time period, depending on the circumstances and typically a minimum of \ufb01ve years. Any material unrecognised deferred
tax assets are disclosed in Note 5.2.
Deferred tax is measured on an undiscounted basis, and at the tax rates that have been enacted or substantively enacted as at the
balance sheet date that are expected to apply in the periods in which the asset or liability is settled. It is recognised in the income
statement except when it relates to items credited or charged directly to other comprehensive income or equity, in which case
the\u00a0deferred tax is also recognised within other comprehensive income or equity respectively.
Deferred tax assets and liabilities are o\ufb00set when they relate to income taxes levied by the same taxation authority, the Group
intends to settle its current tax assets and liabilities on a net basis, o\ufb00set is permissible according to the relevant jurisdiction\u2019s
tax\u00a0laws and that authority permits the Group to make a single net payment.
In 2023, the Group has adopted
IAS 12-Deferred Tax related to Assets and Liabilities
arising from a Single Transaction amendments, which
narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and o\ufb00setting temporary di\ufb00erences
such as leases. The Group previously accounted for deferred tax on leases where the deferred tax asset or liability was recognised on a net
basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets. However, there is no impact on the balance sheet because the balances qualify for o\ufb00set under
paragraph 74 of IAS 12. There was also no impact on the opening retained earnings as at 1 January 2023 as a result of the change.
5.1
Taxation charge attributable to the Group
\n \n
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Current taxation:\u00a0
UK corporation tax at 23.5% (2022: 19.0%; 2021: 19.0%)
15
17
14
Overseas tax
165
104
126
Current income tax charge
180
121
140
Adjustments in respect of prior periods
(45)
(10)
(33)
Total current taxation
135
111
107
Deferred taxation:
Origination and reversal of temporary di\ufb00erences
(116)
(77)
(35)
Changes in tax rates
(2)
(5)
(14)
Adjustments to estimated amounts arising in prior periods
10
(17)
4
Total deferred taxation
(108)
(99)
(45)
Total taxation as per the income statement
27
12
62
Taxation in other comprehensive income
(18)
5
27
Taxation in equity
\u2013
3
1
Taxation charge attributable to the Group
9
20
90
The 2023, 2022 and 2021 net prior period adjustments of $35m, $27m and $29m respectively relate principally to provision releases
following the resolution of tax audits and other uncertain tax matters, and other one-o\ufb00 items.
The total taxation charge of $27m as per the income statement includes a $113m net credit (2022: $127m net credit, 2021: $85m net
credit) as a consequence of restructuring and rationalisation-related costs, acquisition and disposal-related items, amortisation and
impairment of acquisition intangibles, legal and other items.
Factors a\ufb00ecting future tax charges
The Group operates in numerous tax jurisdictions around the world and is subject to factors that may a\ufb00ect future tax charges including
transfer pricing, tax rate changes, tax legislation changes, tax authority interpretation, expiry of statute of limitations, tax litigation,
and\u00a0resolution of tax audits and disputes.
At any given time, the Group has unagreed years outstanding in various countries and is involved in tax audits and disputes, some
of which may take several years to resolve. Provisions are based on best estimates and management\u2019s judgements concerning the
likely ultimate outcome of any audit or dispute. Management considers the speci\ufb01c circumstances of each tax position and takes
external advice, where appropriate, to assess the range of potential outcomes and estimate additional tax that may be due. Total tax
liabilities include $121m (2022: $150m) in relation to uncertain tax positions which relate to multiple issues across the jurisdictions in
which the Group operates. Other payables include $13m (2022: $10m) of interest on these provisions. There are $33m (2022: $37m)
of\u00a0tax receivables.
The Group believes that it has made adequate provision in respect of additional tax liabilities that may arise from unagreed years, tax
audits and disputes, the majority of which relate to transfer pricing matters, as would be expected for a Group operating internationally.
However, the actual liability for any particular issue may be higher or lower than the amount provided, resulting in a negative or positive
e\ufb00ect on the tax charge in any given year. A reduction in the tax charge may also arise for other reasons such as an expiry of the relevant
statute of limitations. Depending on the \ufb01nal outcome of tax audits which are currently in progress, statute of limitations expiry, and
other factors, an impact on the tax charge could arise. Whilst such an impact can vary from year to year, these releases depend on
factors which are uncertain, both as to outcome and timing. However, at the current time, we believe the possibility of a material impact
on\u00a0the tax charge for 2024 is unlikely.
Pillar Two
The OECD Pillar Two GloBE Rules (Pillar Two) introduce a global minimum corporation tax rate of 15% applicable to multinational
enterprise groups with global revenue over \u20ac750m. All participating OECD members are required to incorporate these rules into national
legislation. The Pillar Two rules will apply to the Group for its accounting period commencing 1 January 2024. On 23 May 2023, the
International Accounting Standards Board (IASB) amended IAS 12 to introduce a mandatory temporary exception to the accounting for
deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules. On 19 July 2023 the UK Endorsement Board
adopted the IASB amendments to IAS 12.
The Group has performed an assessment of its potential exposure to Pillar Two income taxes based on 2023 \ufb01nancial data and considers
that the rules will result in an increase in the Group tax rate. The main jurisdictions which would give rise to Pillar Two income tax are
Switzerland, Singapore and Costa Rica; all jurisdictions in which the Group has substantial operations. It is estimated that the Pillar Two
income tax would increase the Group tax rate by around 1.5%. The actual Pillar Two impact in 2024 will depend on factors such as
revenues, costs and foreign currency exchange rate impacts by jurisdiction.
The Group is adopting the mandatory temporary exception from the recognition and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model rules.
The Group does not meet the threshold for application of the Pillar One transfer pricing rules.
The UK standard rate of corporation tax for 2023 is 23.5% (2022: 19.0%, 2021: 19.0%). Overseas taxation is calculated at the rates prevailing
in\u00a0the respective jurisdictions. The table below reconciles the expected tax charge at the UK statutory rate with the actual tax charge.
The UK corporation tax rate increased to 25% from 1 April 2023. The impact of this rate change is re\ufb02ected in the calculation of the
taxation charge, and in the tax reconciliation below.
\n \n
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Pro\ufb01t before taxation
290
235
586
Expected taxation at UK statutory rate of 23.5% (2022: 19.0%, 2021: 19.0%)
68
45
111
Di\ufb00erences in overseas taxation rates
(24)
(19)
(17)
Innovation reliefs
(7)
(10)
(12)
Tax losses and other deferred tax assets not recognised
\u2013
\u2013
7
Recognition of previously unrecognised tax losses
(14)
(4)
(2)
Expenses not deductible for tax purposes
1
38
31
22
Change in tax rates
(2)
(5)
(14)
Withholding tax on unremitted earnings
3
1
(4)
Adjustments in respect of prior\u00a0years\u00b2
(35)
(27)
(29)
Total taxation charge as per the income statement
27
12
62
\n
1
In 2023, this includes a $7m impact of non-tax deductible impairment on UK owned investments (2022: $7m impact of non-tax deductible impairment on UK owned investments,
2021: $17m impact of non-taxable accounting gains recognised on UK-owned investments).
2
The adjustment in respect of prior years are explained on page 187.
5.2
Deferred taxation
Movements in the main components of deferred tax assets and liabilities were as follows:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Inventory,
\u00a0
\u00a0
Accelerated
\u00a0
Retirement
Losses
provisions
\u00a0
\u00a0
tax
\u00a0
bene\ufb01t
and other
and\u00a0other
\u00a0
\u00a0
depreciation
Intangibles
obligations
tax attributes
di\ufb00erences
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
At 31 December 2021
(45)
(199)
(18)
130
189
57
Exchange adjustment
\u2013
1
2
\u2013
(10)
(7)
Movement in income statement\u00a0\u2013 current\u00a0year
(28)
15
1
1
88
77
Movement in income statement\u00a0\u2013 prior\u00a0years
\u2013
4
1
9
3
17
Movement in other comprehensive income
\u2013
\u2013
(7)
\u2013
2
(5)
Movement in equity
\u2013
\u2013
\u2013
\u2013
(3)
(3)
Changes in tax rate
(2)
(2)
\u2013
\u2013
9
5
At 31 December\u00a02022
(75)
(181)
(21)
140
278
141
Exchange adjustment
\u2013
(1)
(3)
1
1
(2)
Movement in income statement\u00a0\u2013 current\u00a0year
(15)
43
\u2013
63
25
116
Movement in income statement\u00a0\u2013 prior\u00a0years
\u2013
1
\u2013
(10)
(1)
(10)
Movement in other comprehensive income
\u2013
\u2013
18
\u2013
\u2013
18
Changes in tax rate
(1)
\u2013
\u2013
4
(1)
2
At 31 December\u00a02023
(91)
(138)
(6)
198
302
265
\n
Represented by:
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Deferred tax assets
274
177
Deferred tax liabilities
(9)
(36)
Net position at 31 December
265
141
The deferred tax asset of $302m (2022: $278m) relating to inventory, provisions and other di\ufb00erences comprises deferred tax relating
to inventory of $125m (2022: $117m), provisions and other short-term temporary di\ufb00erences of $169m (2022: $153m) and bad debt
provisions of $8m (2022: $8m).
The Group has gross unused trading and non-trading tax losses of $1,145m (2022: $839m), gross unused research and development tax
credits of $16m (2022: $24m) and gross unused capital losses of $102m (2022: $97m), available for o\ufb00set against future pro\ufb01ts. $262m
of losses will expire within 10 years from the balance sheet date if not utilised.
A deferred tax asset of $198m (2022: $140m) has been recognised in respect of $885m (2022: $541m) of the trading and non-trading
tax\u00a0losses and $16m (2022: $12m) of research and development tax credits. No deferred tax asset has been recognised on the remaining
unused tax losses as it is not probable that future taxable pro\ufb01ts will be available against which they can be utilised.
Management will reassess the recoverability of deferred tax assets at each balance sheet date by taking into account all relevant and
available information. The Group assesses the likelihood of these being recovered within a reasonably foreseeable time frame, being
typically a minimum of \ufb01ve years, taking into account the future expected pro\ufb01t pro\ufb01le and business model of each relevant company
or country, and any potential legislative restrictions on use. Short-term timing di\ufb00erences are generally recognised ahead of losses
and\u00a0other tax attributes as being likely to reverse more quickly.", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f25164": { "value": "Accounting policy
The charge for current taxation is based on the results for the year as adjusted for items which are non-assessable or non-deductible.
It is calculated using tax rates that have been enacted or substantively enacted as at the balance sheet date.
The Group operates in numerous tax jurisdictions around the world. At any given time, the Group typically is involved in tax audits
and other disputes and will have other tax returns potentially subject to audit. Signi\ufb01cant issues may take several years to resolve.
In estimating the probability and amount of any tax charge, management takes into account the views of internal and external
advisers and updates the amount of tax provision where considered appropriate. The ultimate tax liability may di\ufb00er from the
amount\u00a0provided depending on factors including interpretations of\u00a0tax law and settlement negotiations.
Deferred tax is recognised in respect of temporary di\ufb00erences between the carrying amounts of assets and liabilities for \ufb01nancial
reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised: for temporary di\ufb00erences related to investments in subsidiaries and associates where the Group is
able to control the timing of the reversal of the temporary di\ufb00erence and it is probable that this will not reverse in the foreseeable
future; on the initial recognition of non-deductible goodwill; and on the initial recognition of an asset or liability in a transaction that
is\u00a0not a business combination and that, at the time of the transaction, does not a\ufb00ect the accounting or taxable pro\ufb01t.
Deferred tax assets are recognised to the extent that it is probable that future taxable pro\ufb01ts will be available against which they
can\u00a0be used. Deferred tax assets are reviewed at each reporting date taking into account the recoverability of the deferred tax assets,
future pro\ufb01tability and any restrictions on use. The Group considers available evidence to assess future pro\ufb01tability over a reasonably
foreseeable time period, depending on the circumstances and typically a minimum of \ufb01ve years. Any material unrecognised deferred
tax assets are disclosed in Note 5.2.
Deferred tax is measured on an undiscounted basis, and at the tax rates that have been enacted or substantively enacted as at the
balance sheet date that are expected to apply in the periods in which the asset or liability is settled. It is recognised in the income
statement except when it relates to items credited or charged directly to other comprehensive income or equity, in which case
the\u00a0deferred tax is also recognised within other comprehensive income or equity respectively.
Deferred tax assets and liabilities are o\ufb00set when they relate to income taxes levied by the same taxation authority, the Group
intends to settle its current tax assets and liabilities on a net basis, o\ufb00set is permissible according to the relevant jurisdiction\u2019s
tax\u00a0laws and that authority permits the Group to make a single net payment.
In 2023, the Group has adopted
IAS 12-Deferred Tax related to Assets and Liabilities
arising from a Single Transaction amendments, which
narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and o\ufb00setting temporary di\ufb00erences
such as leases. The Group previously accounted for deferred tax on leases where the deferred tax asset or liability was recognised on a net
basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets. However, there is no impact on the balance sheet because the balances qualify for o\ufb00set under
paragraph 74 of IAS 12. There was also no impact on the opening retained earnings as at 1 January 2023 as a result of the change.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f25175": { "value": "Deferred tax is recognised in respect of temporary di\ufb00erences between the carrying amounts of assets and liabilities for \ufb01nancial
reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised: for temporary di\ufb00erences related to investments in subsidiaries and associates where the Group is
able to control the timing of the reversal of the temporary di\ufb00erence and it is probable that this will not reverse in the foreseeable
future; on the initial recognition of non-deductible goodwill; and on the initial recognition of an asset or liability in a transaction that
is\u00a0not a business combination and that, at the time of the transaction, does not a\ufb00ect the accounting or taxable pro\ufb01t.
Deferred tax assets are recognised to the extent that it is probable that future taxable pro\ufb01ts will be available against which they
can\u00a0be used. Deferred tax assets are reviewed at each reporting date taking into account the recoverability of the deferred tax assets,
future pro\ufb01tability and any restrictions on use. The Group considers available evidence to assess future pro\ufb01tability over a reasonably
foreseeable time period, depending on the circumstances and typically a minimum of \ufb01ve years. Any material unrecognised deferred
tax assets are disclosed in Note 5.2.
Deferred tax is measured on an undiscounted basis, and at the tax rates that have been enacted or substantively enacted as at the
balance sheet date that are expected to apply in the periods in which the asset or liability is settled. It is recognised in the income
statement except when it relates to items credited or charged directly to other comprehensive income or equity, in which case
the\u00a0deferred tax is also recognised within other comprehensive income or equity respectively.
Deferred tax assets and liabilities are o\ufb00set when they relate to income taxes levied by the same taxation authority, the Group
intends to settle its current tax assets and liabilities on a net basis, o\ufb00set is permissible according to the relevant jurisdiction\u2019s
tax\u00a0laws and that authority permits the Group to make a single net payment.
In 2023, the Group has adopted
IAS 12-Deferred Tax related to Assets and Liabilities
arising from a Single Transaction amendments, which
narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and o\ufb00setting temporary di\ufb00erences
such as leases. The Group previously accounted for deferred tax on leases where the deferred tax asset or liability was recognised on a net
basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets. However, there is no impact on the balance sheet because the balances qualify for o\ufb00set under
paragraph 74 of IAS 12. There was also no impact on the opening retained earnings as at 1 January 2023 as a result of the change.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f25607": { "value": "5.2
Deferred taxation
Movements in the main components of deferred tax assets and liabilities were as follows:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Inventory,
\u00a0
\u00a0
Accelerated
\u00a0
Retirement
Losses
provisions
\u00a0
\u00a0
tax
\u00a0
bene\ufb01t
and other
and\u00a0other
\u00a0
\u00a0
depreciation
Intangibles
obligations
tax attributes
di\ufb00erences
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million
At 31 December 2021
(45)
(199)
(18)
130
189
57
Exchange adjustment
\u2013
1
2
\u2013
(10)
(7)
Movement in income statement\u00a0\u2013 current\u00a0year
(28)
15
1
1
88
77
Movement in income statement\u00a0\u2013 prior\u00a0years
\u2013
4
1
9
3
17
Movement in other comprehensive income
\u2013
\u2013
(7)
\u2013
2
(5)
Movement in equity
\u2013
\u2013
\u2013
\u2013
(3)
(3)
Changes in tax rate
(2)
(2)
\u2013
\u2013
9
5
At 31 December\u00a02022
(75)
(181)
(21)
140
278
141
Exchange adjustment
\u2013
(1)
(3)
1
1
(2)
Movement in income statement\u00a0\u2013 current\u00a0year
(15)
43
\u2013
63
25
116
Movement in income statement\u00a0\u2013 prior\u00a0years
\u2013
1
\u2013
(10)
(1)
(10)
Movement in other comprehensive income
\u2013
\u2013
18
\u2013
\u2013
18
Changes in tax rate
(1)
\u2013
\u2013
4
(1)
2
At 31 December\u00a02023
(91)
(138)
(6)
198
302
265
\n
Represented by:
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Deferred tax assets
274
177
Deferred tax liabilities
(9)
(36)
Net position at 31 December
265
141
The deferred tax asset of $302m (2022: $278m) relating to inventory, provisions and other di\ufb00erences comprises deferred tax relating
to inventory of $125m (2022: $117m), provisions and other short-term temporary di\ufb00erences of $169m (2022: $153m) and bad debt
provisions of $8m (2022: $8m).
The Group has gross unused trading and non-trading tax losses of $1,145m (2022: $839m), gross unused research and development tax
credits of $16m (2022: $24m) and gross unused capital losses of $102m (2022: $97m), available for o\ufb00set against future pro\ufb01ts. $262m
of losses will expire within 10 years from the balance sheet date if not utilised.
A deferred tax asset of $198m (2022: $140m) has been recognised in respect of $885m (2022: $541m) of the trading and non-trading
tax\u00a0losses and $16m (2022: $12m) of research and development tax credits. No deferred tax asset has been recognised on the remaining
unused tax losses as it is not probable that future taxable pro\ufb01ts will be available against which they can be utilised.
Management will reassess the recoverability of deferred tax assets at each balance sheet date by taking into account all relevant and
available information. The Group assesses the likelihood of these being recovered within a reasonably foreseeable time frame, being
typically a minimum of \ufb01ve years, taking into account the future expected pro\ufb01t pro\ufb01le and business model of each relevant company
or country, and any potential legislative restrictions on use. Short-term timing di\ufb00erences are generally recognised ahead of losses
and\u00a0other tax attributes as being likely to reverse more quickly.", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f25996": { "value": "6
Earnings per ordinary share
Accounting policy
Earnings per share
Basic earnings per share is calculated by dividing the pro\ufb01t attributable to equity holders by the weighted average number of
ordinary\u00a0shares in\u00a0issue during the year, excluding shares held by the Company in the Employees\u2019 Share Trust or as treasury shares.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the basic earnings per share for the e\ufb00ect of conversion to ordinary shares
associated with\u00a0dilutive potential ordinary shares, which comprise share options and awards granted to employees.
Adjusted earnings per share
Adjusted earnings per share (or adjusted basic earnings per share) is a trend measure which presents the long-term pro\ufb01tability
of\u00a0the Group excluding the impact of speci\ufb01c transactions that management considers a\ufb00ects the Group\u2019s short-term pro\ufb01tability.
The Group presents this measure to assist investors in their understanding of trends. Adjusted attributable pro\ufb01t is the numerator
used for this measure. The Group has identi\ufb01ed the following items as those to be excluded when arriving at adjusted attributable
pro\ufb01t: acquisition and disposal-related items including amortisation and impairment of acquisition intangible assets; signi\ufb01cant
restructuring programmes; signi\ufb01cant gains and losses arising from legal disputes and other signi\ufb01cant items (including UK tax
litigation) and taxation thereon. Adjusted diluted earnings per share is calculated by adjusting the adjusted basic earnings per share
for the e\ufb00ect of conversion to ordinary shares associated with dilutive potential ordinary shares, which comprise share options and
awards granted to employees.
The calculations of the basic, diluted and adjusted earnings per ordinary share are based on the following attributable pro\ufb01t and numbers
of shares:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023
2022
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Earnings
\u00a0 \u00a0 \u00a0
Attributable pro\ufb01t for the\u00a0year
263
223
524
Adjusted attributable pro\ufb01t (see below)
722
713
710
\n
Attributable pro\ufb01t is reconciled to adjusted attributable pro\ufb01t as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0
2023
\u00a0\u00a0
2022
\u00a0\u00a0
2021
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
Attributable pro\ufb01t for the\u00a0year
\u00a0\u00a0\u00a0\u00a0
263
\u00a0\u00a0
223
\u00a0\u00a0
524
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Acquisition and disposal-related items
1
\u00a0\u00a0\u00a0\u00a0
78
\u00a0\u00a0
162
\u00a0\u00a0
(73)
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Restructuring and rationalisation costs
2
\u00a0\u00a0
3
\u00a0
223
\u00a0\u00a0
168
\u00a0\u00a0
113
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Amortisation and impairment of acquisition intangibles
3
\u00a0\u00a0
9
\u00a0
207
\u00a0\u00a0
205
\u00a0\u00a0
172
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Legal and other
4
\u00a0\u00a0\u00a0\u00a0
64
\u00a0\u00a0
82
\u00a0\u00a0
59
\u00a0
Taxation on excluded items
\u00a0\u00a0
5
\u00a0
(113)
\u00a0\u00a0
(127)
\u00a0\u00a0
(85)
\u00a0
Adjusted attributable pro\ufb01t
\u00a0\u00a0\u00a0\u00a0
722
\u00a0\u00a0
713
\u00a0\u00a0
710
\u00a0
\n
1
Acquisition and disposal-related items includes a $60m charge within operating pro\ufb01t (2022: $4m charge, 2021: $7m charge) and a $18m charge within share of result of associates
(2022: $158m charge, 2021: $5m credit) and a $nil gain on disposal of interest in associate (2022: $nil, 2021: $75m gain). See details in Note 11.
2
Restructuring and rationalisation costs include a $220m charge within operating pro\ufb01t (2022: $167m, 2021: $113m) and a $3m charge within share of result of associates (2022: $1m, 2021: $nil).
3
In 2023, amortisation and impairment of acquisition intangibles includes a $207m charge within operating pro\ufb01t (2022: $205m charge within operating pro\ufb01t, 2021: $172m charge within
operating pro\ufb01t).
4
Legal and other in 2023 includes $58m charge (2022: $75m charge, 2021: $51m charge) within operating pro\ufb01t (refer to Note 2.6) and a $6m charge (2022: $7m charge, 2021: $8m charge)
within other \ufb01nance costs for unwinding of the discount on the provision for known, anticipated and settled metal-on-metal hip claims globally.
The numerators used for basic and diluted earnings per ordinary share are the same. The denominators used for all categories of earnings
per ordinary share are as follows:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023\u00a0
\u00a0
\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
2021
Number\u00a0of\u00a0shares\u00a0(millions)
\u00a0 \u00a0 \u00a0
Basic weighted number of shares
871
872
877
Dilutive impact of share incentive schemes outstanding
2
1
1
Diluted weighted average number of shares
873
873
878
Earnings per ordinary share
\u00a0 \u00a0 \u00a0
Basic
30.2\u00a2
25.5\u00a2
59.8\u00a2
Diluted
30.1\u00a2
25.5\u00a2
59.7\u00a2
Adjusted:
\u00a0 \u00a0 \u00a0
Basic
82.8\u00a2
81.8\u00a2
80.9\u00a2
Diluted
82.7\u00a2
81.6\u00a2
80.8\u00a2
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26001": { "value": "Accounting policy
Earnings per share
Basic earnings per share is calculated by dividing the pro\ufb01t attributable to equity holders by the weighted average number of
ordinary\u00a0shares in\u00a0issue during the year, excluding shares held by the Company in the Employees\u2019 Share Trust or as treasury shares.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the basic earnings per share for the e\ufb00ect of conversion to ordinary shares
associated with\u00a0dilutive potential ordinary shares, which comprise share options and awards granted to employees.
Adjusted earnings per share
Adjusted earnings per share (or adjusted basic earnings per share) is a trend measure which presents the long-term pro\ufb01tability
of\u00a0the Group excluding the impact of speci\ufb01c transactions that management considers a\ufb00ects the Group\u2019s short-term pro\ufb01tability.
The Group presents this measure to assist investors in their understanding of trends. Adjusted attributable pro\ufb01t is the numerator
used for this measure. The Group has identi\ufb01ed the following items as those to be excluded when arriving at adjusted attributable
pro\ufb01t: acquisition and disposal-related items including amortisation and impairment of acquisition intangible assets; signi\ufb01cant
restructuring programmes; signi\ufb01cant gains and losses arising from legal disputes and other signi\ufb01cant items (including UK tax
litigation) and taxation thereon. Adjusted diluted earnings per share is calculated by adjusting the adjusted basic earnings per share
for the e\ufb00ect of conversion to ordinary shares associated with dilutive potential ordinary shares, which comprise share options and
awards granted to employees.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26499": { "value": "7
Property, plant and equipment
Accounting policy
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated to write o\ufb00 the cost of items of property, plant and equipment less their estimated residual values using
the\u00a0straight-line method over their estimated useful lives, and is ultimately recognised in pro\ufb01t or loss. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Freehold land is not depreciated. The estimated useful lives of items of property, plant and equipment is 3\u201320 years
and for buildings is 20\u201350 years.
Assets in course of construction are not depreciated until they are available for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Finance costs relating to the purchase or construction of property, plant and equipment and intangible assets that take longer than
one year to complete are capitalised based on the Group weighted average borrowing costs. All other \ufb01nance costs are expensed
as incurred.
Leased assets
The assessment of whether a contract is or contains a lease takes place at the inception of the contract. The assessment involves
whether the Group obtains substantially all the economic bene\ufb01ts from the use of that asset and whether the Group has the right
to direct the use of the asset. The Group allocates the consideration in the contract to each lease and non-lease component.
The non-lease component, where it is separately identi\ufb01able, is not included in the right-of-use asset.
The Group leases many assets including properties, motor vehicles and o\ufb03ce equipment. The Group availed itself of the exemptions
for short-term leases and leases of low-value items for leases other than those for properties and motor vehicles. The use of these
exemptions does not have a material impact. The Group recognises a right-of-use asset and a lease liability at the commencement
of the lease. The right-of-use asset is initially measured based on the present value of lease payments that are not paid at the
commencement date plus initial direct costs less any incentives received. The lease payments are discounted using an incremental
borrowing rate which is country-speci\ufb01c and re\ufb02ective of the lease term. The right-of-use asset is depreciated over the shorter
of\u00a0the\u00a0lease term or the useful life of the underlying asset.
Cash \ufb02ows arising on lease interest payments are included in operating cash \ufb02ows whereas cash \ufb02ows arising on the capital
repayments of the lease liability are included in \ufb01nancing cash \ufb02ows.
Impairment of assets
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset,
the\u00a0Group estimates the recoverable amount of the cash-generating unit to which it belongs.
An asset\u2019s recoverable amount is the higher of an asset\u2019s or cash-generating unit\u2019s fair value less costs to sell and its value-in-use.
In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using a pre-tax discount rate that re\ufb02ects
the\u00a0current market assessment of the time value of money and the risks speci\ufb01c to the asset.
Plant and equipment
Assets in
Land and
course of
buildings
Instruments
Other
construction
Total
\u00a0Notes
\u00a0
\u00a0
\u00a0
$ million
$ million
$ million
$ million
$ million
Cost
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
688
1,694
1,282
303
3,967
Exchange adjustment
\u00a0
\u00a0
(18)
(66)
(39)
(6)
(129)
Acquisitions
21
\u2013
2
\u2013
\u2013
2
Additions
\u00a0
\u00a0
51
129
24
136
340
Disposals
(45)
(58)
(49)
(1)
(153)
Impairment
\u2013
\u2013
\u2013
(3)
(3)
Transfers
\u00a0
\u00a0
50
9
114
(173)
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
726
1,710
1,332
256
4,024
Exchange adjustment
\u00a0
\u00a0
8
10
21
4
43
Additions
\u00a0
\u00a0
69
211
29
70
379
Disposals
(39)
(88)
(51)
(2)
(180)
Impairment
\u2013
\u2013
\u2013
(5)
(5)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
27
1
102
(153)
(23)
At 31 December\u00a02023
\u00a0
\u00a0
795
1,844
1,433
170
4,242
Depreciation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
249
1,292
913
\u2013
2,454
Exchange adjustment
\u00a0
\u00a0
(8)
(52)
(29)
\u2013
(89)
Charge for the\u00a0year
\u00a0
\u00a0
62
172
85
\u2013
319
Impairment
\u00a0
\u00a0
18
8
1
\u2013
27
Disposals
\u00a0
\u00a0
(37)
(58)
(47)
\u2013
(142)
Transfers
\u00a0
\u00a0
\u2013
4
(4)
\u2013
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
284
1,366
919
\u2013
2,569
Exchange adjustment
\u00a0
\u00a0
4
8
15
\u2013
27
Charge for the\u00a0year
\u00a0
\u00a0
63
154
89
\u2013
306
Impairment
\u00a0
\u00a0
21
1
4
\u2013
26
Disposals
(34)
(76)
(50)
\u2013
(160)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
\u2013
(1)
1
\u2013
\u2013
At 31 December\u00a02023
\u00a0
\u00a0
342
1,452
978
\u2013
2,772
Net book amounts
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December\u00a02023
453
392
455
170
1,470
At 31 December\u00a02022
\u00a0
\u00a0
442
344
413
256
1,455
Land and buildings includes land with a cost of $37m (2022: $22m) that is not subject to depreciation. Transfers from assets in course of
construction includes $23m (2022: $nil) of so\ufb05ware. Assets under construction in 2023 re\ufb02ect that the Group is undergoing investment
in its manufacturing facilities including expanding facilities in Costa Rica, and the development of new manufacturing facility in Hull, UK.
Group capital expenditure relating to property, plant and equipment contracted but not provided for amounted to $12m (2022: $20m).
The amount of\u00a0borrowing costs capitalised in 2023 and 2022 was minimal.
Information about the Group\u2019s right-of-use assets is outlined below:
\n \n
Land and
Plant and
buildings
equipment
2023
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Additions
45
11
Depreciation charge in the year
42
12
Net book value at 31 December
157
28
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26500": { "value": "7
Property, plant and equipment
Accounting policy
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated to write o\ufb00 the cost of items of property, plant and equipment less their estimated residual values using
the\u00a0straight-line method over their estimated useful lives, and is ultimately recognised in pro\ufb01t or loss. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Freehold land is not depreciated. The estimated useful lives of items of property, plant and equipment is 3\u201320 years
and for buildings is 20\u201350 years.
Assets in course of construction are not depreciated until they are available for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Finance costs relating to the purchase or construction of property, plant and equipment and intangible assets that take longer than
one year to complete are capitalised based on the Group weighted average borrowing costs. All other \ufb01nance costs are expensed
as incurred.
Leased assets
The assessment of whether a contract is or contains a lease takes place at the inception of the contract. The assessment involves
whether the Group obtains substantially all the economic bene\ufb01ts from the use of that asset and whether the Group has the right
to direct the use of the asset. The Group allocates the consideration in the contract to each lease and non-lease component.
The non-lease component, where it is separately identi\ufb01able, is not included in the right-of-use asset.
The Group leases many assets including properties, motor vehicles and o\ufb03ce equipment. The Group availed itself of the exemptions
for short-term leases and leases of low-value items for leases other than those for properties and motor vehicles. The use of these
exemptions does not have a material impact. The Group recognises a right-of-use asset and a lease liability at the commencement
of the lease. The right-of-use asset is initially measured based on the present value of lease payments that are not paid at the
commencement date plus initial direct costs less any incentives received. The lease payments are discounted using an incremental
borrowing rate which is country-speci\ufb01c and re\ufb02ective of the lease term. The right-of-use asset is depreciated over the shorter
of\u00a0the\u00a0lease term or the useful life of the underlying asset.
Cash \ufb02ows arising on lease interest payments are included in operating cash \ufb02ows whereas cash \ufb02ows arising on the capital
repayments of the lease liability are included in \ufb01nancing cash \ufb02ows.
Impairment of assets
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset,
the\u00a0Group estimates the recoverable amount of the cash-generating unit to which it belongs.
An asset\u2019s recoverable amount is the higher of an asset\u2019s or cash-generating unit\u2019s fair value less costs to sell and its value-in-use.
In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using a pre-tax discount rate that re\ufb02ects
the\u00a0current market assessment of the time value of money and the risks speci\ufb01c to the asset.
Plant and equipment
Assets in
Land and
course of
buildings
Instruments
Other
construction
Total
\u00a0Notes
\u00a0
\u00a0
\u00a0
$ million
$ million
$ million
$ million
$ million
Cost
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
688
1,694
1,282
303
3,967
Exchange adjustment
\u00a0
\u00a0
(18)
(66)
(39)
(6)
(129)
Acquisitions
21
\u2013
2
\u2013
\u2013
2
Additions
\u00a0
\u00a0
51
129
24
136
340
Disposals
(45)
(58)
(49)
(1)
(153)
Impairment
\u2013
\u2013
\u2013
(3)
(3)
Transfers
\u00a0
\u00a0
50
9
114
(173)
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
726
1,710
1,332
256
4,024
Exchange adjustment
\u00a0
\u00a0
8
10
21
4
43
Additions
\u00a0
\u00a0
69
211
29
70
379
Disposals
(39)
(88)
(51)
(2)
(180)
Impairment
\u2013
\u2013
\u2013
(5)
(5)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
27
1
102
(153)
(23)
At 31 December\u00a02023
\u00a0
\u00a0
795
1,844
1,433
170
4,242
Depreciation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
249
1,292
913
\u2013
2,454
Exchange adjustment
\u00a0
\u00a0
(8)
(52)
(29)
\u2013
(89)
Charge for the\u00a0year
\u00a0
\u00a0
62
172
85
\u2013
319
Impairment
\u00a0
\u00a0
18
8
1
\u2013
27
Disposals
\u00a0
\u00a0
(37)
(58)
(47)
\u2013
(142)
Transfers
\u00a0
\u00a0
\u2013
4
(4)
\u2013
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
284
1,366
919
\u2013
2,569
Exchange adjustment
\u00a0
\u00a0
4
8
15
\u2013
27
Charge for the\u00a0year
\u00a0
\u00a0
63
154
89
\u2013
306
Impairment
\u00a0
\u00a0
21
1
4
\u2013
26
Disposals
(34)
(76)
(50)
\u2013
(160)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
\u2013
(1)
1
\u2013
\u2013
At 31 December\u00a02023
\u00a0
\u00a0
342
1,452
978
\u2013
2,772
Net book amounts
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December\u00a02023
453
392
455
170
1,470
At 31 December\u00a02022
\u00a0
\u00a0
442
344
413
256
1,455
Land and buildings includes land with a cost of $37m (2022: $22m) that is not subject to depreciation. Transfers from assets in course of
construction includes $23m (2022: $nil) of so\ufb05ware. Assets under construction in 2023 re\ufb02ect that the Group is undergoing investment
in its manufacturing facilities including expanding facilities in Costa Rica, and the development of new manufacturing facility in Hull, UK.
Group capital expenditure relating to property, plant and equipment contracted but not provided for amounted to $12m (2022: $20m).
The amount of\u00a0borrowing costs capitalised in 2023 and 2022 was minimal.
Information about the Group\u2019s right-of-use assets is outlined below:
\n \n
Land and
Plant and
buildings
equipment
2023
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Additions
45
11
Depreciation charge in the year
42
12
Net book value at 31 December
157
28
15.1
Net debt
Net debt comprises borrowings and credit balances on currency swaps less cash at bank.
\u00a0
\u00a0
\u00a0
2023
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Bank overdra\ufb05s, borrowings and loans due within one\u00a0year
710
111
Corporate bond
1,550
1,510
Private placement notes
625
1,055
Borrowings
2,885
2,676
Cash at bank
(302)
(350)
Credit balance on derivatives\u00a0\u2013 currency swaps
1
\u2013
(Debit)/credit balance on derivatives\u00a0\u2013 interest rate swaps
(7)
13
Net debt
2,577
2,339
Non-current lease liabilities
144
147
Current lease liabilities
55
49
Net debt including lease liabilities
2,776
2,535
\n
Borrowings are repayable as follows:
\u00a0
Within
Between
Between
Between
Between
\u00a0 \u00a0
\u00a0
one\u00a0year\u00a0or
one\u00a0and
two\u00a0and
three\u00a0and
four\u00a0and
A\ufb05er
\u00a0
\u00a0
on\u00a0demand
two\u00a0years
three\u00a0years
four\u00a0years
\ufb01ve\u00a0years
\ufb01ve\u00a0years
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank loans
303
\u2013
\u2013
\u2013
\u2013
\u2013
303
Bank overdra\ufb05s
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,550
1,550
Private placement notes
405
\u2013
75
140
60
350
1,030
Lease liabilities
1
55
44
33
25
18
35
210
\u00a0
765
44
108
165
78
1,935
3,095
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
6
\u2013
\u2013
\u2013
\u2013
\u2013
6
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,510
1,510
Private placement notes
105
430
\u2013
75
140
410
1,160
Lease liabilities
1
49
42
32
24
18
45
210
\u00a0
160
472
32
99
158
1,965
2,886
\n
1
The lease liabilities presented above of $210m (2022: $210m) are on an undiscounted basis. The lease liabilities on a discounted basis, as outlined above, are $199m (2022:\u00a0$196m).", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26506": { "value": "Accounting policy
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated to write o\ufb00 the cost of items of property, plant and equipment less their estimated residual values using
the\u00a0straight-line method over their estimated useful lives, and is ultimately recognised in pro\ufb01t or loss. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Freehold land is not depreciated. The estimated useful lives of items of property, plant and equipment is 3\u201320 years
and for buildings is 20\u201350 years.
Assets in course of construction are not depreciated until they are available for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Finance costs relating to the purchase or construction of property, plant and equipment and intangible assets that take longer than
one year to complete are capitalised based on the Group weighted average borrowing costs. All other \ufb01nance costs are expensed
as incurred.
Leased assets
The assessment of whether a contract is or contains a lease takes place at the inception of the contract. The assessment involves
whether the Group obtains substantially all the economic bene\ufb01ts from the use of that asset and whether the Group has the right
to direct the use of the asset. The Group allocates the consideration in the contract to each lease and non-lease component.
The non-lease component, where it is separately identi\ufb01able, is not included in the right-of-use asset.
The Group leases many assets including properties, motor vehicles and o\ufb03ce equipment. The Group availed itself of the exemptions
for short-term leases and leases of low-value items for leases other than those for properties and motor vehicles. The use of these
exemptions does not have a material impact. The Group recognises a right-of-use asset and a lease liability at the commencement
of the lease. The right-of-use asset is initially measured based on the present value of lease payments that are not paid at the
commencement date plus initial direct costs less any incentives received. The lease payments are discounted using an incremental
borrowing rate which is country-speci\ufb01c and re\ufb02ective of the lease term. The right-of-use asset is depreciated over the shorter
of\u00a0the\u00a0lease term or the useful life of the underlying asset.
Cash \ufb02ows arising on lease interest payments are included in operating cash \ufb02ows whereas cash \ufb02ows arising on the capital
repayments of the lease liability are included in \ufb01nancing cash \ufb02ows.
Impairment of assets
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset,
the\u00a0Group estimates the recoverable amount of the cash-generating unit to which it belongs.
An asset\u2019s recoverable amount is the higher of an asset\u2019s or cash-generating unit\u2019s fair value less costs to sell and its value-in-use.
In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using a pre-tax discount rate that re\ufb02ects
the\u00a0current market assessment of the time value of money and the risks speci\ufb01c to the asset.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26513": { "value": "Depreciation is calculated to write o\ufb00 the cost of items of property, plant and equipment less their estimated residual values using
the\u00a0straight-line method over their estimated useful lives, and is ultimately recognised in pro\ufb01t or loss. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Freehold land is not depreciated. The estimated useful lives of items of property, plant and equipment is 3\u201320 years
and for buildings is 20\u201350 years.
Assets in course of construction are not depreciated until they are available for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26520": { "value": "Assets in course of construction are not depreciated until they are available for use.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForConstructionInProgressExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26527": { "value": "Leased assets
The assessment of whether a contract is or contains a lease takes place at the inception of the contract. The assessment involves
whether the Group obtains substantially all the economic bene\ufb01ts from the use of that asset and whether the Group has the right
to direct the use of the asset. The Group allocates the consideration in the contract to each lease and non-lease component.
The non-lease component, where it is separately identi\ufb01able, is not included in the right-of-use asset.
The Group leases many assets including properties, motor vehicles and o\ufb03ce equipment. The Group availed itself of the exemptions
for short-term leases and leases of low-value items for leases other than those for properties and motor vehicles. The use of these
exemptions does not have a material impact. The Group recognises a right-of-use asset and a lease liability at the commencement
of the lease. The right-of-use asset is initially measured based on the present value of lease payments that are not paid at the
commencement date plus initial direct costs less any incentives received. The lease payments are discounted using an incremental
borrowing rate which is country-speci\ufb01c and re\ufb02ective of the lease term. The right-of-use asset is depreciated over the shorter
of\u00a0the\u00a0lease term or the useful life of the underlying asset.
Cash \ufb02ows arising on lease interest payments are included in operating cash \ufb02ows whereas cash \ufb02ows arising on the capital
repayments of the lease liability are included in \ufb01nancing cash \ufb02ows.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26544": { "value": "Impairment of assets
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset,
the\u00a0Group estimates the recoverable amount of the cash-generating unit to which it belongs.
An asset\u2019s recoverable amount is the higher of an asset\u2019s or cash-generating unit\u2019s fair value less costs to sell and its value-in-use.
In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using a pre-tax discount rate that re\ufb02ects
the\u00a0current market assessment of the time value of money and the risks speci\ufb01c to the asset.Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which it belongs. An asset\u2019s recoverable amount is the higher of an asset\u2019s or CGU\u2019s fair value
less costs to sell and its value-in-use. In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using
a\u00a0pre-tax discount rate that re\ufb02ects the current market assessments of the time value of money and the risks speci\ufb01c to the asset.
In carrying out impairment reviews of intangible assets, a number of signi\ufb01cant assumptions have to be made when preparing cash
\ufb02ow\u00a0projections. These include the future rate of market growth, discount rates, the market demand for the products acquired,
the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals.
If actual results should di\ufb00er, or\u00a0changes in expectations should arise, impairment charges may be required which would adversely
impact operating results.The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26545": { "value": "Impairment of assets
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset,
the\u00a0Group estimates the recoverable amount of the cash-generating unit to which it belongs.
An asset\u2019s recoverable amount is the higher of an asset\u2019s or cash-generating unit\u2019s fair value less costs to sell and its value-in-use.
In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using a pre-tax discount rate that re\ufb02ects
the\u00a0current market assessment of the time value of money and the risks speci\ufb01c to the asset.Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f26584": { "value": "
Plant and equipment
Assets in
Land and
course of
buildings
Instruments
Other
construction
Total
\u00a0Notes
\u00a0
\u00a0
\u00a0
$ million
$ million
$ million
$ million
$ million
Cost
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
688
1,694
1,282
303
3,967
Exchange adjustment
\u00a0
\u00a0
(18)
(66)
(39)
(6)
(129)
Acquisitions
21
\u2013
2
\u2013
\u2013
2
Additions
\u00a0
\u00a0
51
129
24
136
340
Disposals
(45)
(58)
(49)
(1)
(153)
Impairment
\u2013
\u2013
\u2013
(3)
(3)
Transfers
\u00a0
\u00a0
50
9
114
(173)
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
726
1,710
1,332
256
4,024
Exchange adjustment
\u00a0
\u00a0
8
10
21
4
43
Additions
\u00a0
\u00a0
69
211
29
70
379
Disposals
(39)
(88)
(51)
(2)
(180)
Impairment
\u2013
\u2013
\u2013
(5)
(5)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
27
1
102
(153)
(23)
At 31 December\u00a02023
\u00a0
\u00a0
795
1,844
1,433
170
4,242
Depreciation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
\u00a0
\u00a0
249
1,292
913
\u2013
2,454
Exchange adjustment
\u00a0
\u00a0
(8)
(52)
(29)
\u2013
(89)
Charge for the\u00a0year
\u00a0
\u00a0
62
172
85
\u2013
319
Impairment
\u00a0
\u00a0
18
8
1
\u2013
27
Disposals
\u00a0
\u00a0
(37)
(58)
(47)
\u2013
(142)
Transfers
\u00a0
\u00a0
\u2013
4
(4)
\u2013
\u2013
At 31 December\u00a02022
\u00a0
\u00a0
284
1,366
919
\u2013
2,569
Exchange adjustment
\u00a0
\u00a0
4
8
15
\u2013
27
Charge for the\u00a0year
\u00a0
\u00a0
63
154
89
\u2013
306
Impairment
\u00a0
\u00a0
21
1
4
\u2013
26
Disposals
(34)
(76)
(50)
\u2013
(160)
Reclassi\ufb01cation
4
\u2013
\u2013
\u2013
4
Transfers
\u00a0
\u00a0
\u2013
(1)
1
\u2013
\u2013
At 31 December\u00a02023
\u00a0
\u00a0
342
1,452
978
\u2013
2,772
Net book amounts
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December\u00a02023
453
392
455
170
1,470
At 31 December\u00a02022
\u00a0
\u00a0
442
344
413
256
1,455
\n \n
Customer\u00a0and
Assets
Product-
distribution-
in course of
Technology
related
related
So\ufb05ware
construction
Total
Notes\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Cost
At 1 January\u00a02022
588
2,206
231
491
68
3,584
Exchange adjustment
(6)
(21)
(2)
(14)
(2)
(45)
Acquisitions
21
\u2013
44
\u2013
\u2013
\u2013
44
Additions
\u2013
3
7
32
35
77
Disposals
\u2013
\u2013
(1)
(5)
\u2013
(6)
Impairment
\u2013
\u2013
\u2013
\u2013
(1)
(1)
Transfers
\u2013
\u2013
\u2013
4
(4)
\u2013
At 31 December\u00a02022
582
2,232
235
508
96
3,653
Exchange adjustment
4
36
(1)
5
4
48
Additions
\u2013
2
2
36
64
104
Disposals
(1)
(7)
\u2013
(4)
\u2013
(12)
Transfers
(3)
10
\u2013
2
14
23
At 31 December\u00a02023
582
2,273
236
547
178
3,816
Amortisation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
180
1,482
145
379
\u2013
2,186
Exchange adjustment
(2)
(19)
(2)
(8)
\u2013
(31)
Charge for the year
46
123
17
43
\u2013
229
Impairment
4
28
\u2013
6
\u2013
38
Disposals
\u2013
\u2013
\u2013
(5)
\u2013
(5)
At 31 December\u00a02022
228
1,614
160
415
\u2013
2,417
Exchange adjustment
2
36
\u2013
4
\u2013
42
Charge for the year
46
121
16
38
\u2013
221
Impairment
\u2013
37
\u2013
\u2013
\u2013
37
Disposals
\u2013
(7)
\u2013
(4)
\u2013
(11)
At 31 December\u00a02023
276
1,801
176
453
\u2013
2,706
Net book amounts
\u00a0
\u00a0
At 31 December\u00a02023
306
472
60
94
178
1,110
At 31 December\u00a02022
354
618
75
93
96
1,236
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27258": { "value": "8
Goodwill
Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.
\u00a0 \u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Cost and net book value
\u00a0 \u00a0 \u00a0
At 1 January
\u00a0
3,031
2,989
Exchange adjustment
\u00a0
45
(42)
Impairment
\u00a0
(84)
\u2013
Acquisitions
21
\u2013
84
At 31 December
\u00a0
2,992
3,031
\n
Management has identi\ufb01ed \ufb01ve CGUs in applying the provisions of IAS 36
Impairment of Assets
: Orthopaedics, Sports Medicine, ENT,
Advanced Wound Care & Devices and Bioactives.
In 2023, ENT was identi\ufb01ed as a separate operating segment following change in the Group\u2019s management structure. Therefore, ENT
was identi\ufb01ed as a new CGU for goodwill impairment reviews.
For the purpose of goodwill impairment testing, the Advanced Wound Care & Devices and Bioactives CGUs have been aggregated
(Advanced Wound Management), as this is the level at which goodwill is monitored and level at which the economic bene\ufb01ts relating
to\u00a0the goodwill within these CGUs is realised.
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued.
The goodwill related to Engage of $84m, previously included in the Orthopaedics CGU, was fully impaired.
Goodwill is allocated to the Group\u2019s CGUs as follows:
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Orthopaedics\u00a0
\u00a0
915
953
Sports Medicine
1
1,154
1,455
ENT
1
287
\u2013
Advanced Wound Management
636
623
\u00a0
2,992
3,031
\n
1
In 2022, Sports Medicine and ENT was combined CGU whereas ENT is identi\ufb01ed as a separate CGU in 2023.
Impairment reviews were performed as of September 2023 and September 2022 by comparing the recoverable amount of each CGU
with\u00a0its carrying amount, including goodwill. These were reviewed during December, taking into account any signi\ufb01cant events that
occurred between September and December.
The current challenging economic environment, including in\ufb02ation, was considered in the goodwill impairment reviews. Additionally,
severe downside sensitivity analyses have been undertaken on the base case scenario. Although the headroom for the Orthopaedics
CGU has increased it is still considered sensitive to a reasonably possible change in assumptions, no impairment was identi\ufb01ed as a
result\u00a0of the impairment reviews and\u00a0sensitivity analyses undertaken.
For each CGU, the recoverable amounts are based on value-in-use which is calculated from pre-tax cash \ufb02ow projections for
three\u00a0years\u00a0using data from the Group\u2019s budget and strategic planning process, the results of which are reviewed and approved by
the Board. These projections were extrapolated for a further two years to re\ufb02ect expected growth in the CGUs above the terminal
growth rate which is based on long term GDP growth. The initial three-year period is in line with the Group\u2019s strategic planning
process. In determining the growth rates used in the calculations of the value-in-use, management considered annual revenue growth.
Projections are based on anticipated volume and value growth in the markets served by the Group and assumptions as to market
share movements. Each year the projections for the previous year are compared to actual results and variances are factored into
the\u00a0assumptions used in the current year.
The discount rates used in the value-in-use calculations re\ufb02ect management\u2019s assessment of risks speci\ufb01c to the assets of each CGU.
Our determination of the discount rates is based on Group\u2019s weighted average cost of capital (WACC) which includes a risk-free rate,
based on market participant\u2019s cost of equity, an equity risk premium speci\ufb01cally adjusted to the medical technology industry and
a\ufb05er-tax cost of debt and re\ufb02ects the risks inherent in the cash \ufb02ows adjusted for CGU speci\ufb01c risk.
8.1
Orthopaedics CGU
The cash \ufb02ows used in the value-in-use calculation for the Orthopaedics CGU, which includes the Reconstruction and Trauma
businesses, re\ufb02ects management\u2019s distinctive orthopaedic reconstruction strategy, which combines cutting-edge innovation,
disruptive\u00a0business models and a strong Emerging Markets platform to drive our performance.
The headroom for the Orthopaedics CGU has increased from $0.6bn in the prior year to $1.2bn in the current year, primarily due to
higher revenue growth and expected margin improvement thereon. Revenue is expected to grow above market growth rates due to
new product launches and improved commercial execution. The trading pro\ufb01t margin is expected to grow over the \ufb01ve-year period
as a result of revenue growth as well as productivity and e\ufb03ciency improvements related to the 12-Point Plan. The average growth
rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating the terminal value is 2.0%
(2022: 2.0%). The pre-tax discount rate used in the Orthopaedics CGU value-in-use calculation re\ufb02ects the geographical mix and is
10.8% (2022: 10.1%).
8.2
Sports Medicine CGU
The cash \ufb02ows used in the value-in-use calculation for the Sports Medicine CGU re\ufb02ects growth rates and cash \ufb02ows consistent with
management\u2019s strategy to maintain growth in Sports Medicine.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating
the terminal value is 2.0% (2022: 2.0%). The pre-tax discount rate used in the Sports Medicine CGU value-in-use calculation re\ufb02ects the
geographical mix of the revenues and is 10.8% (2022: 10.1%).
8.3
ENT CGU
The cash \ufb02ow used in the value-in-use calculation for the ENT CGU re\ufb02ects growth rates and cash \ufb02ows consistent with
management\u2019s strategy.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period in calculating the terminal value
is 2.0%. The pre-tax discount rate used in the ENT CGU value-in-use calculation re\ufb02ects the geographical mix of the revenues and is
10.8%.
8.4
Advanced Wound Management CGU
The aggregated Advanced Wound Management CGU comprises the Advanced Wound Care & Devices and Bioactives CGUs.
In performing the value-in-use calculation for this combined CGU, management considered the Group\u2019s focus across the wound
product, focusing on widening access to the customer, the higher added value sectors of healing chronic wounds and tissue repair using
bioactives, and by continuing to improve e\ufb03ciency.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating
the terminal value is 2.0% (2022: 2.0%). The pre tax discount rate used in the Advanced Wound Management CGU value-in-use
calculation re\ufb02ects the geographical mix and industry sector and is 10.8% (2022: 10.1%).
8.5
Sensitivity to changes in assumptions used in value-in-use calculations
Management have performed a sensitivity analysis of the value-in-use calculations for the identi\ufb01ed CGUs and there was no impact
on\u00a0the reported amounts of goodwill as a result of this review for the Sports Medicine, ENT and Advanced Wound Management CGUs.
Management do not believe a reasonably possible change in assumptions used for the Orthopaedics CGU value-in-use, other than
trading pro\ufb01t margin, could result in a material impairment. Management\u2019s consideration of this sensitivity is set out below:
Trading pro\ufb01t margin
\u2013 management has considered the impact of a decrease in the trading pro\ufb01t margin. This sensitivity analysis
shows\u00a0that for the recoverable amount of the Orthopaedics CGU to be less than its carrying value, the terminal period and year 5
trading\u00a0pro\ufb01t margin would have\u00a0to decrease by more than 550 basis points.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27259": { "value": "8
Goodwill
Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.
\u00a0 \u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Notes\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Cost and net book value
\u00a0 \u00a0 \u00a0
At 1 January
\u00a0
3,031
2,989
Exchange adjustment
\u00a0
45
(42)
Impairment
\u00a0
(84)
\u2013
Acquisitions
21
\u2013
84
At 31 December
\u00a0
2,992
3,031
\n
Management has identi\ufb01ed \ufb01ve CGUs in applying the provisions of IAS 36
Impairment of Assets
: Orthopaedics, Sports Medicine, ENT,
Advanced Wound Care & Devices and Bioactives.
In 2023, ENT was identi\ufb01ed as a separate operating segment following change in the Group\u2019s management structure. Therefore, ENT
was identi\ufb01ed as a new CGU for goodwill impairment reviews.
For the purpose of goodwill impairment testing, the Advanced Wound Care & Devices and Bioactives CGUs have been aggregated
(Advanced Wound Management), as this is the level at which goodwill is monitored and level at which the economic bene\ufb01ts relating
to\u00a0the goodwill within these CGUs is realised.
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued.
The goodwill related to Engage of $84m, previously included in the Orthopaedics CGU, was fully impaired.
Goodwill is allocated to the Group\u2019s CGUs as follows:
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Orthopaedics\u00a0
\u00a0
915
953
Sports Medicine
1
1,154
1,455
ENT
1
287
\u2013
Advanced Wound Management
636
623
\u00a0
2,992
3,031
\n
1
In 2022, Sports Medicine and ENT was combined CGU whereas ENT is identi\ufb01ed as a separate CGU in 2023.
Impairment reviews were performed as of September 2023 and September 2022 by comparing the recoverable amount of each CGU
with\u00a0its carrying amount, including goodwill. These were reviewed during December, taking into account any signi\ufb01cant events that
occurred between September and December.
The current challenging economic environment, including in\ufb02ation, was considered in the goodwill impairment reviews. Additionally,
severe downside sensitivity analyses have been undertaken on the base case scenario. Although the headroom for the Orthopaedics
CGU has increased it is still considered sensitive to a reasonably possible change in assumptions, no impairment was identi\ufb01ed as a
result\u00a0of the impairment reviews and\u00a0sensitivity analyses undertaken.
For each CGU, the recoverable amounts are based on value-in-use which is calculated from pre-tax cash \ufb02ow projections for
three\u00a0years\u00a0using data from the Group\u2019s budget and strategic planning process, the results of which are reviewed and approved by
the Board. These projections were extrapolated for a further two years to re\ufb02ect expected growth in the CGUs above the terminal
growth rate which is based on long term GDP growth. The initial three-year period is in line with the Group\u2019s strategic planning
process. In determining the growth rates used in the calculations of the value-in-use, management considered annual revenue growth.
Projections are based on anticipated volume and value growth in the markets served by the Group and assumptions as to market
share movements. Each year the projections for the previous year are compared to actual results and variances are factored into
the\u00a0assumptions used in the current year.
The discount rates used in the value-in-use calculations re\ufb02ect management\u2019s assessment of risks speci\ufb01c to the assets of each CGU.
Our determination of the discount rates is based on Group\u2019s weighted average cost of capital (WACC) which includes a risk-free rate,
based on market participant\u2019s cost of equity, an equity risk premium speci\ufb01cally adjusted to the medical technology industry and
a\ufb05er-tax cost of debt and re\ufb02ects the risks inherent in the cash \ufb02ows adjusted for CGU speci\ufb01c risk.
8.1
Orthopaedics CGU
The cash \ufb02ows used in the value-in-use calculation for the Orthopaedics CGU, which includes the Reconstruction and Trauma
businesses, re\ufb02ects management\u2019s distinctive orthopaedic reconstruction strategy, which combines cutting-edge innovation,
disruptive\u00a0business models and a strong Emerging Markets platform to drive our performance.
The headroom for the Orthopaedics CGU has increased from $0.6bn in the prior year to $1.2bn in the current year, primarily due to
higher revenue growth and expected margin improvement thereon. Revenue is expected to grow above market growth rates due to
new product launches and improved commercial execution. The trading pro\ufb01t margin is expected to grow over the \ufb01ve-year period
as a result of revenue growth as well as productivity and e\ufb03ciency improvements related to the 12-Point Plan. The average growth
rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating the terminal value is 2.0%
(2022: 2.0%). The pre-tax discount rate used in the Orthopaedics CGU value-in-use calculation re\ufb02ects the geographical mix and is
10.8% (2022: 10.1%).
8.2
Sports Medicine CGU
The cash \ufb02ows used in the value-in-use calculation for the Sports Medicine CGU re\ufb02ects growth rates and cash \ufb02ows consistent with
management\u2019s strategy to maintain growth in Sports Medicine.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating
the terminal value is 2.0% (2022: 2.0%). The pre-tax discount rate used in the Sports Medicine CGU value-in-use calculation re\ufb02ects the
geographical mix of the revenues and is 10.8% (2022: 10.1%).
8.3
ENT CGU
The cash \ufb02ow used in the value-in-use calculation for the ENT CGU re\ufb02ects growth rates and cash \ufb02ows consistent with
management\u2019s strategy.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period in calculating the terminal value
is 2.0%. The pre-tax discount rate used in the ENT CGU value-in-use calculation re\ufb02ects the geographical mix of the revenues and is
10.8%.
8.4
Advanced Wound Management CGU
The aggregated Advanced Wound Management CGU comprises the Advanced Wound Care & Devices and Bioactives CGUs.
In performing the value-in-use calculation for this combined CGU, management considered the Group\u2019s focus across the wound
product, focusing on widening access to the customer, the higher added value sectors of healing chronic wounds and tissue repair using
bioactives, and by continuing to improve e\ufb03ciency.
The weighted average growth rate used to extrapolate the cash \ufb02ows beyond the \ufb01ve-year period (2022: \ufb01ve-year period) in calculating
the terminal value is 2.0% (2022: 2.0%). The pre tax discount rate used in the Advanced Wound Management CGU value-in-use
calculation re\ufb02ects the geographical mix and industry sector and is 10.8% (2022: 10.1%).
8.5
Sensitivity to changes in assumptions used in value-in-use calculations
Management have performed a sensitivity analysis of the value-in-use calculations for the identi\ufb01ed CGUs and there was no impact
on\u00a0the reported amounts of goodwill as a result of this review for the Sports Medicine, ENT and Advanced Wound Management CGUs.
Management do not believe a reasonably possible change in assumptions used for the Orthopaedics CGU value-in-use, other than
trading pro\ufb01t margin, could result in a material impairment. Management\u2019s consideration of this sensitivity is set out below:
Trading pro\ufb01t margin
\u2013 management has considered the impact of a decrease in the trading pro\ufb01t margin. This sensitivity analysis
shows\u00a0that for the recoverable amount of the Orthopaedics CGU to be less than its carrying value, the terminal period and year 5
trading\u00a0pro\ufb01t margin would have\u00a0to decrease by more than 550 basis points.
9
Intangible assets
Accounting policy
Intangible assets
Intangible assets acquired separately from a business combination (including purchased patents, know-how, trademarks, licences
and\u00a0distribution rights) are initially measured at cost. The cost of intangible assets acquired in a material business combination
(referred to as acquisition intangibles) is the fair value as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any\u00a0accumulated amortisation and any accumulated impairment losses. All intangible assets are amortised on a
straight-line basis over their estimated useful economic lives. The estimated useful economic life of so\ufb05ware ranges between three
and seven years. The estimated useful economic life of technology assets ranges between 6\u201320 years, product-related assets ranges
between 2\u201320 years, and customer and distribution assets ranges between 2\u201314 years. Internally-generated intangible assets are
expensed in the income statement as incurred. Purchased computer so\ufb05ware and certain costs of information technology projects
are capitalised as intangible assets. So\ufb05ware that is integral to computer hardware is capitalised as plant and equipment.
Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which it belongs. An asset\u2019s recoverable amount is the higher of an asset\u2019s or CGU\u2019s fair value
less costs to sell and its value-in-use. In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using
a\u00a0pre-tax discount rate that re\ufb02ects the current market assessments of the time value of money and the risks speci\ufb01c to the asset.
In carrying out impairment reviews of intangible assets, a number of signi\ufb01cant assumptions have to be made when preparing cash
\ufb02ow\u00a0projections. These include the future rate of market growth, discount rates, the market demand for the products acquired,
the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals.
If actual results should di\ufb00er, or\u00a0changes in expectations should arise, impairment charges may be required which would adversely
impact operating results.
\n \n
Customer\u00a0and
Assets
Product-
distribution-
in course of
Technology
related
related
So\ufb05ware
construction
Total
Notes\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Cost
At 1 January\u00a02022
588
2,206
231
491
68
3,584
Exchange adjustment
(6)
(21)
(2)
(14)
(2)
(45)
Acquisitions
21
\u2013
44
\u2013
\u2013
\u2013
44
Additions
\u2013
3
7
32
35
77
Disposals
\u2013
\u2013
(1)
(5)
\u2013
(6)
Impairment
\u2013
\u2013
\u2013
\u2013
(1)
(1)
Transfers
\u2013
\u2013
\u2013
4
(4)
\u2013
At 31 December\u00a02022
582
2,232
235
508
96
3,653
Exchange adjustment
4
36
(1)
5
4
48
Additions
\u2013
2
2
36
64
104
Disposals
(1)
(7)
\u2013
(4)
\u2013
(12)
Transfers
(3)
10
\u2013
2
14
23
At 31 December\u00a02023
582
2,273
236
547
178
3,816
Amortisation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
180
1,482
145
379
\u2013
2,186
Exchange adjustment
(2)
(19)
(2)
(8)
\u2013
(31)
Charge for the year
46
123
17
43
\u2013
229
Impairment
4
28
\u2013
6
\u2013
38
Disposals
\u2013
\u2013
\u2013
(5)
\u2013
(5)
At 31 December\u00a02022
228
1,614
160
415
\u2013
2,417
Exchange adjustment
2
36
\u2013
4
\u2013
42
Charge for the year
46
121
16
38
\u2013
221
Impairment
\u2013
37
\u2013
\u2013
\u2013
37
Disposals
\u2013
(7)
\u2013
(4)
\u2013
(11)
At 31 December\u00a02023
276
1,801
176
453
\u2013
2,706
Net book amounts
\u00a0
\u00a0
At 31 December\u00a02023
306
472
60
94
178
1,110
At 31 December\u00a02022
354
618
75
93
96
1,236
Transfers into so\ufb05ware and assets in course of construction includes $23m (2022: $nil) of so\ufb05ware transferred from property,
plant\u00a0and equipment. Group capital expenditure relating to so\ufb05ware contracted but not provided for amounted to $7m (2022: $7m).
Amortisation and impairment of acquisition intangibles is set out below:
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Technology
46
51
Product-related
150
142
Customer and distribution-related
11
12
Total
207
205
\n
In 2023, the Group impaired $37m of Engage\u2019s intangible assets as a result of the voluntary product discontinuation. In 2022,
$32m of\u00a0impairment charges were booked in relation to immaterial product assets in acquisition intangibles.
Management have assessed the acquisition intangible assets held by the Group to identify any indicators of impairment as of
September\u00a02023. These were updated during December to take into account any signi\ufb01cant events that occurred between September
and December. Where an impairment indicator has arisen, impairment reviews have been undertaken by comparing the expected
recoverable value of assets to the carrying value of assets.
The table below provides further detail on the largest intangible assets and their remaining amortisation period:
\u00a0 \u00a0
Remaining
\u00a0
Carrying value
amortisation
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
period
Intangibles acquired as part of the ArthroCare acquisition
257
10 years
Intangibles acquired as part of the Osiris acquisition
171
1\u20135 years
Intangibles acquired as part of the Healthpoint acquisition
143
4 years
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27266": { "value": "Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27269": { "value": "Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is measured at fair value, as are the identi\ufb01able net assets acquired. Any goodwill
that\u00a0arises is tested annually for\u00a0impairment. Any gain on a bargain purchase is recognised in pro\ufb01t or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classi\ufb01ed
as\u00a0equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value
of\u00a0the\u00a0contingent consideration are recognised in pro\ufb01t or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27270": { "value": "Accounting policy
Goodwill is not amortised but is reviewed for impairment annually. Goodwill is allocated to the cash-generating unit (CGU) that is
expected to bene\ufb01t from the acquisition. The goodwill is tested annually for impairment by comparing the recoverable amount to
the\u00a0carrying value of the CGUs. The CGUs identi\ufb01ed by management are at the aggregated product operating levels of Orthopaedics,
Sports Medicine, ENT and Advanced Wound Management, in the way the core assets are used to generate cash \ufb02ows.
If the recoverable amount of the CGU is less than its carrying amount then an impairment loss is determined to have occurred.
Any impairment losses that arise are recognised immediately in the income statement and are allocated \ufb01rst to reduce the
carrying\u00a0amount of goodwill and then to the carrying amounts of the other assets of the CGU.
When an acquired business included within a CGU ceases to operate permanently, then the acquired business no longer forms part
of the CGU and is therefore tested for impairment on a standalone basis. The portion of goodwill allocated to this acquired business
is\u00a0measured based on its relative value within the CGU, unless another method is considered more appropriate.
In carrying out impairment reviews of goodwill, a number of signi\ufb01cant assumptions have to be made when preparing cash \ufb02ow
projections. These include the future rate of market growth, discount rates, the market demand for the products acquired, the future
pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals. If actual results
should di\ufb00er, or changes in expectations arise, impairment charges may be required which would adversely impact\u00a0operating results.
When the composition of CGUs changed, goodwill would be allocated using a relative value approach at the date of the reorganisation
similar to that used when an operation within a CGU is disposed of or a method that could provide a better allocation of goodwill to
the reorganised units.Accounting policy
Intangible assets
Intangible assets acquired separately from a business combination (including purchased patents, know-how, trademarks, licences
and\u00a0distribution rights) are initially measured at cost. The cost of intangible assets acquired in a material business combination
(referred to as acquisition intangibles) is the fair value as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any\u00a0accumulated amortisation and any accumulated impairment losses. All intangible assets are amortised on a
straight-line basis over their estimated useful economic lives. The estimated useful economic life of so\ufb05ware ranges between three
and seven years. The estimated useful economic life of technology assets ranges between 6\u201320 years, product-related assets ranges
between 2\u201320 years, and customer and distribution assets ranges between 2\u201314 years. Internally-generated intangible assets are
expensed in the income statement as incurred. Purchased computer so\ufb05ware and certain costs of information technology projects
are capitalised as intangible assets. So\ufb05ware that is integral to computer hardware is capitalised as plant and equipment.
Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which it belongs. An asset\u2019s recoverable amount is the higher of an asset\u2019s or CGU\u2019s fair value
less costs to sell and its value-in-use. In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using
a\u00a0pre-tax discount rate that re\ufb02ects the current market assessments of the time value of money and the risks speci\ufb01c to the asset.
In carrying out impairment reviews of intangible assets, a number of signi\ufb01cant assumptions have to be made when preparing cash
\ufb02ow\u00a0projections. These include the future rate of market growth, discount rates, the market demand for the products acquired,
the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals.
If actual results should di\ufb00er, or\u00a0changes in expectations should arise, impairment charges may be required which would adversely
impact operating results.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27578": { "value": "9
Intangible assets
Accounting policy
Intangible assets
Intangible assets acquired separately from a business combination (including purchased patents, know-how, trademarks, licences
and\u00a0distribution rights) are initially measured at cost. The cost of intangible assets acquired in a material business combination
(referred to as acquisition intangibles) is the fair value as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any\u00a0accumulated amortisation and any accumulated impairment losses. All intangible assets are amortised on a
straight-line basis over their estimated useful economic lives. The estimated useful economic life of so\ufb05ware ranges between three
and seven years. The estimated useful economic life of technology assets ranges between 6\u201320 years, product-related assets ranges
between 2\u201320 years, and customer and distribution assets ranges between 2\u201314 years. Internally-generated intangible assets are
expensed in the income statement as incurred. Purchased computer so\ufb05ware and certain costs of information technology projects
are capitalised as intangible assets. So\ufb05ware that is integral to computer hardware is capitalised as plant and equipment.
Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which it belongs. An asset\u2019s recoverable amount is the higher of an asset\u2019s or CGU\u2019s fair value
less costs to sell and its value-in-use. In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using
a\u00a0pre-tax discount rate that re\ufb02ects the current market assessments of the time value of money and the risks speci\ufb01c to the asset.
In carrying out impairment reviews of intangible assets, a number of signi\ufb01cant assumptions have to be made when preparing cash
\ufb02ow\u00a0projections. These include the future rate of market growth, discount rates, the market demand for the products acquired,
the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals.
If actual results should di\ufb00er, or\u00a0changes in expectations should arise, impairment charges may be required which would adversely
impact operating results.
\n \n
Customer\u00a0and
Assets
Product-
distribution-
in course of
Technology
related
related
So\ufb05ware
construction
Total
Notes\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Cost
At 1 January\u00a02022
588
2,206
231
491
68
3,584
Exchange adjustment
(6)
(21)
(2)
(14)
(2)
(45)
Acquisitions
21
\u2013
44
\u2013
\u2013
\u2013
44
Additions
\u2013
3
7
32
35
77
Disposals
\u2013
\u2013
(1)
(5)
\u2013
(6)
Impairment
\u2013
\u2013
\u2013
\u2013
(1)
(1)
Transfers
\u2013
\u2013
\u2013
4
(4)
\u2013
At 31 December\u00a02022
582
2,232
235
508
96
3,653
Exchange adjustment
4
36
(1)
5
4
48
Additions
\u2013
2
2
36
64
104
Disposals
(1)
(7)
\u2013
(4)
\u2013
(12)
Transfers
(3)
10
\u2013
2
14
23
At 31 December\u00a02023
582
2,273
236
547
178
3,816
Amortisation and impairment
\u00a0
\u00a0
At 1 January\u00a02022
180
1,482
145
379
\u2013
2,186
Exchange adjustment
(2)
(19)
(2)
(8)
\u2013
(31)
Charge for the year
46
123
17
43
\u2013
229
Impairment
4
28
\u2013
6
\u2013
38
Disposals
\u2013
\u2013
\u2013
(5)
\u2013
(5)
At 31 December\u00a02022
228
1,614
160
415
\u2013
2,417
Exchange adjustment
2
36
\u2013
4
\u2013
42
Charge for the year
46
121
16
38
\u2013
221
Impairment
\u2013
37
\u2013
\u2013
\u2013
37
Disposals
\u2013
(7)
\u2013
(4)
\u2013
(11)
At 31 December\u00a02023
276
1,801
176
453
\u2013
2,706
Net book amounts
\u00a0
\u00a0
At 31 December\u00a02023
306
472
60
94
178
1,110
At 31 December\u00a02022
354
618
75
93
96
1,236
Transfers into so\ufb05ware and assets in course of construction includes $23m (2022: $nil) of so\ufb05ware transferred from property,
plant\u00a0and equipment. Group capital expenditure relating to so\ufb05ware contracted but not provided for amounted to $7m (2022: $7m).
Amortisation and impairment of acquisition intangibles is set out below:
\n\n\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Technology
46
51
Product-related
150
142
Customer and distribution-related
11
12
Total
207
205
\n
In 2023, the Group impaired $37m of Engage\u2019s intangible assets as a result of the voluntary product discontinuation. In 2022,
$32m of\u00a0impairment charges were booked in relation to immaterial product assets in acquisition intangibles.
Management have assessed the acquisition intangible assets held by the Group to identify any indicators of impairment as of
September\u00a02023. These were updated during December to take into account any signi\ufb01cant events that occurred between September
and December. Where an impairment indicator has arisen, impairment reviews have been undertaken by comparing the expected
recoverable value of assets to the carrying value of assets.
The table below provides further detail on the largest intangible assets and their remaining amortisation period:
\u00a0 \u00a0
Remaining
\u00a0
Carrying value
amortisation
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
period
Intangibles acquired as part of the ArthroCare acquisition
257
10 years
Intangibles acquired as part of the Osiris acquisition
171
1\u20135 years
Intangibles acquired as part of the Healthpoint acquisition
143
4 years
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f27583": { "value": "Accounting policy
Intangible assets
Intangible assets acquired separately from a business combination (including purchased patents, know-how, trademarks, licences
and\u00a0distribution rights) are initially measured at cost. The cost of intangible assets acquired in a material business combination
(referred to as acquisition intangibles) is the fair value as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any\u00a0accumulated amortisation and any accumulated impairment losses. All intangible assets are amortised on a
straight-line basis over their estimated useful economic lives. The estimated useful economic life of so\ufb05ware ranges between three
and seven years. The estimated useful economic life of technology assets ranges between 6\u201320 years, product-related assets ranges
between 2\u201320 years, and customer and distribution assets ranges between 2\u201314 years. Internally-generated intangible assets are
expensed in the income statement as incurred. Purchased computer so\ufb05ware and certain costs of information technology projects
are capitalised as intangible assets. So\ufb05ware that is integral to computer hardware is capitalised as plant and equipment.
Impairment of intangible assets
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying
value may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the CGU to which it belongs. An asset\u2019s recoverable amount is the higher of an asset\u2019s or CGU\u2019s fair value
less costs to sell and its value-in-use. In assessing value-in-use, its estimated future cash \ufb02ow is discounted to its present value using
a\u00a0pre-tax discount rate that re\ufb02ects the current market assessments of the time value of money and the risks speci\ufb01c to the asset.
In carrying out impairment reviews of intangible assets, a number of signi\ufb01cant assumptions have to be made when preparing cash
\ufb02ow\u00a0projections. These include the future rate of market growth, discount rates, the market demand for the products acquired,
the future pro\ufb01tability of acquired businesses or products, levels of reimbursement and success in obtaining regulatory approvals.
If actual results should di\ufb00er, or\u00a0changes in expectations should arise, impairment charges may be required which would adversely
impact operating results.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28564": { "value": "10
Investments
Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January
12
10
Additions
\u2013
2
Fair value remeasurement
(4)
\u2013
At 31 December
8
12
\n13
Trade and other receivables
Accounting policy
Trade and other receivables are carried at amortised cost, less any allowances for uncollectable amounts. They are included
in\u00a0current\u00a0assets, except for maturities greater than 12 months a\ufb05er the balance sheet date when they are classi\ufb01ed as
non-current assets.
The Group manages credit risk through credit limits which require authorisation commensurate with the size of the limit and
which are regularly reviewed. Credit limit decisions are made based on available \ufb01nancial information and the business case.
Signi\ufb01cant receivables are regularly reviewed and monitored at Group level. The Group has no signi\ufb01cant concentration of credit risk,
with exposure spread over a large number of customers and geographies. Furthermore, the Group\u2019s principal customers are backed
by government and public or private medical insurance funding, which historically represent a lower risk of default. The maximum
exposure to credit risk at the reporting date is the fair value of each class of\u00a0receivable. The Group does not hold any collateral as
security. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).
\u00a0
\u00a0
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other receivables due within one year
\u00a0 \u00a0
Trade receivables
1,104
1,076
Less: loss allowance
(45)
(49)
Trade receivables\u00a0\u2013 net
1,059
1,027
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
27
47
Other receivables
122
114
Prepayments
92
76
\u00a0
1,300
1,264
Due a\ufb05er more than one year
\u00a0 \u00a0
Other non-current assets
18
12
\u00a0
1,318
1,276
\n
Other non-current assets primarily relate to long-term prepayments and in 2023 interest rate contracts. Management considers
that the carrying amount of trade and other receivables\u00a0approximates the fair value. Allowance losses are calculated by reviewing
lifetime expected credit losses using historic and forward-looking data on credit risk. The loss allowance relating to other receivables
is\u00a0de minimis.
The loss allowance expense for the year was $3m (2022: $4m, 2021: $3m).
The following table provides information about the ageing of and expected credit losses for trade receivables:
\u00a0
2023 Weighted
\u00a0
2023 Gross
2022 Gross
\u00a0
average loss
2023 Loss
carrying
carrying
\u00a0
rate
allowance
amount
amount\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
%\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Not past due
-0.1%
(1)
788
610
Past due not more than 3 months
-0.6%
(1)
180
228
Past due more than 3 months
-3.9%
(2)
51
97
Past due more than 6 months
-48.2%
(41)
85
141
\u00a0 \u00a0
(45)
1,104
1,076
Loss allowance
\u00a0 \u00a0
(45)
(49)
Trade receivables\u00a0\u2013 net
\u00a0 \u00a0
1,059
1,027
The Group\u2019s expected credit loss accounting policy includes guidance on how the expected credit loss percentages should be
determined; it\u00a0does not include present limits as the customer groups and risk pro\ufb01les are not consistent across all of our markets.
Each market determines their own percentages based on historic experience and future expectations, and in line with the
general\u00a0guidance in\u00a0the Group\u2019s policy.
Movements in the loss allowance were as follows:
\u00a0
\u00a0
\u00a0\u00a0
2023\u00a0
\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
At 1 January
\u00a0
49
\u00a0
\u00a0
57
\u00a0
Exchange adjustment
\u00a0
1
\u00a0
\u00a0
(3)
\u00a0
Net receivables provided during the\u00a0year
\u00a0
3
\u00a0
\u00a0
4
\u00a0
Utilisation of provision
\u00a0
(8)
\u00a0
\u00a0
(9)
\u00a0
At 31 December
\u00a0
45
\u00a0
\u00a0
49
\u00a0
\n
Trade receivables include amounts denominated in the following major currencies:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
US Dollar
506
\u00a0
465
Sterling
39
\u00a0
37
Euro
224
\u00a0
215
Other
290
\u00a0
310
Trade receivables\u00a0\u2013 net
1,059
\u00a0
1,027
\n
14
Trade and other payables
\u00a0
\u00a0
\u00a0
2023
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other payables due within one\u00a0year
\u00a0 \u00a0
Trade and other payables
1,016
1,029
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
28
43
Acquisition consideration
11
26
\u00a0
1,055
1,098
Other payables due a\ufb05er one\u00a0year
\u00a0 \u00a0
Acquisition consideration
25
66
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
\u2013
13
Other payables
10
11
\u00a0
35
90
\n
The acquisition consideration includes $32m (2022: $78m) contingent upon future events.
The acquisition consideration due a\ufb05er more than one year is expected to be payable as follows: $9m in 2025, $2m in 2026
and\u00a0$14m\u00a0in\u00a02027 (2022: $29m in 2024, $35m in 2025, $2m\u00a0in\u00a02026).
15
Cash and borrowings
15.1
Net debt
Net debt comprises borrowings and credit balances on currency swaps less cash at bank.
\u00a0
\u00a0
\u00a0
2023
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Bank overdra\ufb05s, borrowings and loans due within one\u00a0year
710
111
Corporate bond
1,550
1,510
Private placement notes
625
1,055
Borrowings
2,885
2,676
Cash at bank
(302)
(350)
Credit balance on derivatives\u00a0\u2013 currency swaps
1
\u2013
(Debit)/credit balance on derivatives\u00a0\u2013 interest rate swaps
(7)
13
Net debt
2,577
2,339
Non-current lease liabilities
144
147
Current lease liabilities
55
49
Net debt including lease liabilities
2,776
2,535
\n
Borrowings are repayable as follows:
\u00a0
Within
Between
Between
Between
Between
\u00a0 \u00a0
\u00a0
one\u00a0year\u00a0or
one\u00a0and
two\u00a0and
three\u00a0and
four\u00a0and
A\ufb05er
\u00a0
\u00a0
on\u00a0demand
two\u00a0years
three\u00a0years
four\u00a0years
\ufb01ve\u00a0years
\ufb01ve\u00a0years
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank loans
303
\u2013
\u2013
\u2013
\u2013
\u2013
303
Bank overdra\ufb05s
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,550
1,550
Private placement notes
405
\u2013
75
140
60
350
1,030
Lease liabilities
1
55
44
33
25
18
35
210
\u00a0
765
44
108
165
78
1,935
3,095
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
6
\u2013
\u2013
\u2013
\u2013
\u2013
6
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,510
1,510
Private placement notes
105
430
\u2013
75
140
410
1,160
Lease liabilities
1
49
42
32
24
18
45
210
\u00a0
160
472
32
99
158
1,965
2,886
\n
1
The lease liabilities presented above of $210m (2022: $210m) are on an undiscounted basis. The lease liabilities on a discounted basis, as outlined above, are $199m (2022:\u00a0$196m).
15.2
Liquidity risk exposures
The Board has established a set of policies to manage funding and currency risks. The Group only uses derivative \ufb01nancial instruments
to\u00a0manage the \ufb01nancial risks associated with underlying business activities and their \ufb01nancing. Liquidity risk is the risk that the Group is
not able to settle or meet its obligations on time or at a reasonable price. The Group\u2019s policy is to ensure that there is su\ufb03cient funding
and\u00a0facilities in place to meet foreseeable borrowing requirements. The Group manages and monitors liquidity risk through regular
reporting of current cash and borrowing balances and periodic preparation and review of short-and\u00a0medium-term cash forecasts,
having\u00a0regard to the maturities of investments and borrowing facilities. The Group has available committed facilities of $3.6bn
(2022:\u00a0$3.7bn). During 2022, the Group issued its debut EUR Corporate Bond, in the form of \u20ac500m (before expenses and underwriting
discounts) of\u00a0notes bearing an interest rate of 4.565% repayable in 2029. In 2023, the Group repaid $130m of private placement debt.
The interest payable on borrowings under committed facilities is either at\u00a0\ufb01xed\u00a0or \ufb02oating rates. Euro \ufb02oating rates are typically
based\u00a0on\u00a0EURIBOR and US Dollar rates are typically based on the Term Secured Overnight Financing Rate (Term SOFR). The Company is
subject to \ufb01nancial covenants under its private placement agreements. The \ufb01nancial covenants are tested at the end of each half year
for the 12 months ending on the last day of the testing period. As of 31 December 2023, the Company was in compliance with these
covenants. The facilities are also subject to\u00a0customary events of default, none of which are currently anticipated to occur.
The Group re\ufb01nanced its $1bn Revolving Credit Facility (\u201cRCF\u201d) in Q4 2023. This extends the facility maturity to 2028, with options to
extend the maturity to 2030.
The Group\u2019s committed facilities at 31 December 2023 are:
Facility
\u00a0
\u00a0
\u00a0
\u00a0
Date due
$100 million 3.89% Senior Notes
January 2024
$305 million 3.36% Senior Notes
November 2024
$75 million 3.99% Senior Notes
January 2026
$140 million 2.83% Senior Notes
June 2027
$60 million 2.90% Senior Notes
June 2028
$1.0 billion syndicated revolving credit facility
October 2028
$100 million 2.97% Senior Notes
June 2029
\u20ac500 million 4.565% EUR Corporate Bond
October 2029
$95 million 2.99% Senior Notes
June 2030
$1.0 billion 2.032% USD Corporate Bond
October 2030
$155 million 3.09% Senior Notes
June 2032
\n
15.3
Year end \ufb01nancial liabilities by contractual maturity
The table below analyses the Group\u2019s year end \ufb01nancial liabilities by contractual maturity date, including contractual interest payments
and excluding the impact of netting arrangements:
\u00a0
\u00a0
\u00a0
Within\u00a0one
Between
Between
\u00a0 \u00a0
\u00a0
year\u00a0or\u00a0on
one\u00a0and
two\u00a0and
A\ufb05er
\u00a0
\u00a0
demand
two\u00a0years
\ufb01ve\u00a0years
\ufb01ve\u00a0years
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Non-derivative \ufb01nancial liabilities:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s and loans
\u00a0
305
\u2013
\u2013
\u2013
305
Corporate bond
\u00a0
53
53
158
1,614
1,878
Trade and other payables
\u00a0
1,016
\u2013
\u2013
\u2013
1,016
Private placement notes
\u00a0
434
19
317
373
1,143
Acquisition consideration
\u00a0
11
9
2
15
37
Derivative \ufb01nancial instruments:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Currency swaps/forward foreign exchange contracts\u00a0\u2013 out\ufb02ow
\u00a0
2,913
\u2013
\u2013
\u2013
2,913
Currency swaps/forward foreign exchange contracts\u00a0\u2013 in\ufb02ow
\u00a0
(2,912)
\u2013
\u2013
\u2013
(2,912)
\u00a0
\u00a0
1,820
81
477
2,002
4,380
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Non-derivative \ufb01nancial liabilities:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s and loans
\u00a0
6
\u2013
\u2013
\u2013
6
Corporate bond
37
37
111
1,620
1,805
Trade and other payables
\u00a0
1,029
\u2013
\u2013
\u2013
1,029
Private placement notes
\u00a0
143
461
265
444
1,313
Acquisition consideration
\u00a0
26
31
39
\u2013
96
Derivative \ufb01nancial instruments:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Currency swaps/forward foreign exchange contracts\u00a0\u2013 out\ufb02ow
\u00a0
2,598
\u2013
\u2013
\u2013
2,598
Currency swaps/forward foreign exchange contracts\u00a0\u2013 in\ufb02ow
\u00a0
(2,601)
\u2013
\u2013
\u2013
(2,601)
\u00a0
\u00a0
1,238
529
415
2,064
4,246
\n
The amounts in the tables above are undiscounted cash \ufb02ows, which di\ufb00er from the amounts included in the balance sheet where the
underlying cash \ufb02ows have been discounted.
15.4
Liquidity and capital resources
The Group\u2019s policy is to ensure that it has su\ufb03cient funding and facilities to meet foreseeable borrowing requirements.
At 31 December 2023, the Group held $300m (2022: $344m, 2021: $1,285m) in cash net of bank overdra\ufb05s. The Group had committed
facilities available of $3.6bn at 31 December 2023 of which $2.9bn was drawn.
The principal variations in the Group\u2019s borrowing requirements result from the timing of dividend payments, acquisitions and disposals
of businesses, timing of capital expenditure and working capital \ufb02uctuations. Smith+Nephew believes that its capital expenditure needs
and its working capital funding for 2024, as well as its other known or expected commitments or liabilities, can be met from its existing
resources and facilities. The Group\u2019s net debt including leases increased from $2.5bn at the beginning of 2023 to $2.8bn at the end
of\u00a02023, representing an overall increase of $0.3bn.
16
Financial instruments and risk management
Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.
On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.
16.1
Foreign exchange risk management
The Group operates in many countries and as a consequence has transactional and translational foreign exchange exposure. It is the
Group\u2019s\u00a0policy for operating units not to hold material unhedged monetary assets or liabilities other than in their functional currencies.
Foreign exchange variations a\ufb00ect trading results in two ways. Firstly, on translation of overseas sales and pro\ufb01ts into US Dollars
and\u00a0secondly, transactional exposures arising where some, or all of the costs of sale are incurred in a di\ufb00erent currency from the sale.
The principal transactional exposures arise as the proportion of costs in US Dollars, Sterling and Swiss Francs exceed the proportion
of\u00a0sales in each of these currencies and correspondingly the proportion of sales in Euros exceeds the proportion of costs in Euros.
The impact of currency movements on the cost of purchases is partly mitigated by the use of forward foreign exchange contracts.
The Group uses forward foreign exchange contracts, designated as cash \ufb02ow hedges, to hedge forecast third-party trading cash \ufb02ows
up\u00a0to\u00a0one year. When a commitment is entered into, forward foreign exchange contracts are normally used to increase the hedge
to 100% of the exposure. Cash \ufb02ows relating to cash \ufb02ow hedges are expected to occur within 12 months of inception and pro\ufb01ts
and losses on hedges are expected to enter into the determination of pro\ufb01t (within cost of goods sold) within a further 12-month
period. The principal currencies hedged by forward foreign exchange contracts are US Dollars, Euros, Sterling and Singapore Dollars.
At 31 December 2023, the Group had contracted to exchange within one year the equivalent of $2.4bn (2022: $2.2bn). Based on
the Group\u2019s net borrowings as at 31 December 2023, if the US Dollar were to weaken against all currencies by 10%, the Group\u2019s
net\u00a0borrowings would increase by\u00a0$37m (2022: $41m) principally due to the Euro-denominated term loans.
If the US Dollar were to weaken by 10% against all other currencies, then the fair value of the forward foreign exchange contracts as
at 31 December 2023 would have been $67m lower (2022: $50m lower). Similarly, if the Euro were to weaken by 10% against all other
currencies, then the fair value of the forward foreign exchange contracts as at 31 December 2023 would have been $38m higher
(2022:\u00a0$35m higher). Movements in the fair value of forward foreign exchange contracts would be recognised in other comprehensive
income or in the income statement.
A 10% strengthening of the US Dollar or Euro against all other currencies at 31 December 2023 would have had the equal but opposite
e\ufb00ect to the amounts shown above, on the basis that all other variables remain constant.
The Group\u2019s policy is to hedge all actual foreign exchange exposures and the Group\u2019s forward foreign exchange contracts are designated
as cash \ufb02ow hedges. The net impact of transaction-related foreign exchange on the income statement from a movement in exchange
rates on the value of forward foreign exchange contracts is not signi\ufb01cant. In addition, the movements in the fair value of other \ufb01nancial
instruments used for hedging such as currency swaps for which hedge accounting is not applied o\ufb00set movements in the values of
assets and liabilities and are recognised through the income statement. Hedge ine\ufb00ectiveness is caused by actual cash \ufb02ows in foreign
currencies varying from forecast cash \ufb02ows.
16.2
Interest rate risk management
The Group is exposed to interest rate risk on cash, borrowings and certain currency and interest rate swaps which are at \ufb02oating
rates. When required the Group uses interest rate derivatives to meet its objective of protecting borrowing costs within parameters
set by the\u00a0Board. These interest rate derivatives are accounted for as cash \ufb02ow hedges and, as such, changes in fair value resulting
from changes in market interest rates are recognised in other comprehensive income and accumulated in the hedging reserve, with
the fair\u00a0value of the interest rate derivatives recorded in the balance sheet. Additionally, the Group uses interest rate swaps to reduce
the overall level of \ufb01xed rate debt, within parameters set by the Board. When used in this way, interest rate derivatives are accounted
for\u00a0as\u00a0fair value hedges. The fair value movement of the derivative is o\ufb00set in the income statement against the fair value movement
in\u00a0the\u00a0underlying \ufb01xed rate debt.
In 2022, the Group entered into a new \u20ac500m \ufb01xed to \ufb02oating interest rate swap.
Based on the Group\u2019s gross borrowings and cash as at 31 December 2023, if interest rates were to increase by 100 basis points in all
currencies, then the annual net interest charge would increase by $5m (2022: $4m). A decrease in interest rates by 100 basis points
in\u00a0all\u00a0currencies would have an equal but opposite e\ufb00ect to the amounts shown above.
16.3
Credit risk management
The Group limits exposure to credit risk on counterparties used for \ufb01nancial instruments through a system of internal credit limits.
The \ufb01nancial exposure of a counterparty is determined as the total of cash and deposits, plus the risk on derivative instruments,
assessed as the fair value of the instrument plus a risk element based on the nominal value and the historic volatility of the market
value of the instrument. The Group does not anticipate non-performance of counterparties and believes it is not subject to material
concentration of credit risk as the Group operates within a policy of counterparty limits designed to reduce exposure to any
single counterparty.
The maximum credit risk exposure on derivatives at 31 December 2023 was $27m (2022: $47m), being the total debit fair values
on\u00a0forward foreign exchange contracts and currency swaps. The maximum credit risk exposure on cash at bank at 31 December
2023 was\u00a0$302m (2022: $350m). The\u00a0Group\u2019s exposure to credit risk on cash is mitigated as the amounts are held in a wide number
of\u00a0high\u00a0credit quality \ufb01nancial institutions. Credit risk on trade receivables is detailed in Note 13.
The amounts relating to items designated as hedging instruments were as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Carrying
Carrying
Changes in
Hedge
Amounts reclassi\ufb01ed
\u00a0
\u00a0
Nominal
amount
amount
fair value
ine\ufb00ectiveness
from hedging reserve
\u00a0
\u00a0
amount
assets
liabilities
in OCI
in pro\ufb01t or loss
to pro\ufb01t or loss
Line item in
\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
pro\ufb01t or loss
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,913
27
(28)
(3)
\u2013
(25)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
7
\u2013
\u2013
\u2013
\u2013
Fair value hedge
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,598
47
(43)
(13)
\u2013
(37)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
\u2013
(13)
\u2013
\u2013
\u2013
Fair value hedge
\n
1
Presented in Trade and other receivables and Trade and other payables on the Balance Sheet. The nominal amount is in $ million.
2
Presented in Non-current other receivables in 2023 and in Non-current other payables in 2022 on the Balance Sheet. The nominal amount is in \u20ac million.
16.4
Net investment hedge
Part of the Group\u2019s net investment in its Euro subsidiaries is hedged by \u20ac500m ($552m equivalent) of our debut EUR Corporate Bond
which mitigates the\u00a0foreign currency risk arising from the subsidiaries\u2019 net assets. The Bond is designated as a hedging instrument for
the\u00a0changes in\u00a0the\u00a0value of the net investment that is attributable to changes in the EUR/USD spot rate.
To assess hedge e\ufb00ectiveness, the Group determines the economic relationship between the hedging instrument and the hedged item
by comparing changes in the carrying amount of the debt that is attributable to a change in the spot rate with changes in the investment
in the foreign operation due to movements in the spot rate (the o\ufb00set method). The Group\u2019s policy is to hedge the net investment only
to\u00a0the extent of the debt principal. Hedge ine\ufb00ectiveness occurs if the value of the Euro-denominated Corporate Bond exceeds the
value\u00a0of\u00a0the Euro subsidiaries.
16.5
Currency and interest rate pro\ufb01le of interest bearing liabilities and assets
Short-term receivables and payables are excluded from the following disclosures.
Currency and interest rate pro\ufb01le of interest bearing liabilities:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Fixed rate liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Weighted\u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
average
\u00a0 \u00a0 \u00a0
Interest
\u00a0 \u00a0 \u00a0
Weighted
time\u00a0
\u00a0
Gross
Currency
rate
Total
Floating
Fixed\u00a0rate
average
for\u00a0which
\u00a0
borrowings
swaps
swaps
liabilities
rate liabilities
liabilities
interest\u00a0rate
rate\u00a0is\u00a0\ufb01xed
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
%\u00a0
\u00a0
\u00a0
Years
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
(2,324)
(329)
\u2013
(2,653)
(628)
(2,025)
2.7
5.1
Other
(561)
(219)
\u2013
(780)
(224)
(556)
\u00a0 \u00a0
Total interest bearing liabilities
(2,885)
(548)
\u2013
(3,433)
(852)
(2,581)
\u00a0 \u00a0
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
(2,159)
(163)
\u2013
(2,322)
(193)
(2,129)
2.7
5.9
Other
(517)
(206)
(13)
(736)
(220)
(516)
\u00a0 \u00a0
Total interest bearing liabilities
(2,676)
(369)
(13)
(3,058)
(413)
(2,645)
\u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
In 2023, the Group also had liabilities due for deferred and contingent acquisition consideration (denominated in US Dollars, Swiss Francs
and Euros) totalling $36m (2022: $92m, 2021: $91m) on which no interest was payable (see Note 14). There were no other\u00a0signi\ufb01cant
interest bearing or non-interest bearing \ufb01nancial liabilities. Euro \ufb02oating rates are typically based on EURIBOR and US Dollar rates are
typically based on Term SOFR. The\u00a0weighted average interest rate on \ufb02oating rate borrowings as at\u00a031 December 2023 was almost 6%
(2022:\u00a0over than 3%).
Currency and interest rate pro\ufb01le of interest bearing assets:
\u00a0
\u00a0
\u00a0
Cash
Currency\u00a0
Interest rate\u00a0
 \u00a0
\u00a0
\u00a0
Floating
Fixed\u00a0
\u00a0
at\u00a0bank
swaps\u00a0
swaps\u00a0
Total\u00a0assets
rate\u00a0assets
rate\u00a0assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
98
217
\u2013
315
315
\u2013
Other
204
331
7
542
542
\u2013
Total interest bearing assets
302
548
7
857
857
\u2013
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
207
205
\u2013
412
412
\u2013
Other
143
164
\u2013
307
307
\u2013
Total interest bearing assets
350
369
\u2013
719
719
\u2013
\n
Floating rates on assets are typically based on the short-term deposit rates relevant to the currency concerned.
16.6
Fair value of \ufb01nancial assets and liabilities
Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.
There has been no change in the classi\ufb01cation of \ufb01nancial assets and liabilities, the method and assumptions used in determining fair
value and the categorisation of \ufb01nancial assets and liabilities within the fair value hierarchy from those disclosed in the Annual Report
for\u00a0the year ended 31 December 2022.
The Group enters into derivative \ufb01nancial instruments with \ufb01nancial institutions with investment grade credit ratings. The fair value
of forward foreign exchange contracts is calculated by reference to quoted market forward exchange rates for contracts with similar
maturity pro\ufb01les. The fair value of currency swaps is determined by reference to quoted market spot rates. As a result, foreign forward
exchange contracts and currency swaps are classi\ufb01ed as Level 2 within the fair value hierarchy. The changes in counterparty credit
risk had no material e\ufb00ect on the hedge e\ufb00ectiveness for derivatives designated in hedge relationships and other \ufb01nancial instruments
recognised at fair value. The fair value of investments is based upon third-party pricing models for share issues. As a result, investments
are considered Level 3 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during 2023 and 2022. For cash
and cash equivalents, short-term loans and receivables, overdra\ufb05s and other short-term liabilities which have a maturity of less than
three\u00a0months, the book values approximate the fair values\u00a0because of\u00a0their short-term nature.
Long-term borrowings are measured in the balance sheet at amortised cost. The corporate bonds issued in October 2020 and October
2022 are publicly listed and a market price is available. The Group\u2019s other long-term borrowings are not quoted publicly, their fair values
are estimated by\u00a0discounting future contractual cash \ufb02ows to net present\u00a0values at the current market interest rates available to the
Group for similar\u00a0\ufb01nancial instruments as at the year end. The fair\u00a0value of\u00a0the\u00a0private placement notes is determined using a discounted
cash \ufb02ow model based on prevailing market rates.
The following table shows the carrying amounts and fair values of \ufb01nancial assets and \ufb01nancial liabilities, including their levels in the
fair\u00a0value hierarchy. It does not include fair value information for \ufb01nancial assets and \ufb01nancial liabilities not measured at fair value.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Carrying
\u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
amount
\u00a0 \u00a0
Fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0
Fair value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0
Fair value
through
Other
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
hedging
Amortised
through
pro\ufb01t
\ufb01nancial
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
instruments
cost
OCI
or loss
liabilities
Total
Level\u00a02
Level\u00a03
Total
At\u00a031\u00a0December\u00a02023
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward foreign exchange contracts
25
\u2013
\u2013
\u2013
\u2013
25
25
\u2013
25
Investments
\u2013
\u2013
\u2013
8
\u2013
8
\u2013
8
8
Contingent consideration receivable
\u2013
\u2013
\u2013
18
\u2013
18
\u2013
18
18
Interest rate swaps
7
\u2013
\u2013
\u2013
\u2013
7
7
\u2013
7
Currency swaps
\u2013
\u2013
2
\u2013
\u2013
2
2
\u2013
2
\u00a0
32
\u2013
2
26
\u2013
60
\u00a0 \u00a0 \u00a0
Financial liabilities measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
(32)
\u2013
(32)
\u2013
(32)
(32)
Forward foreign exchange contracts
(25)
\u2013
\u2013
\u2013
\u2013
(25)
(25)
\u2013
(25)
Currency swaps
\u2013
\u2013
(3)
\u2013
\u2013
(3)
(3)
\u2013
(3)
\u00a0
(25)
\u2013
(3)
(32)
\u2013
(60)
\u00a0 \u00a0 \u00a0
Financial assets not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Trade and other receivables
1,163
\u2013
\u2013
\u2013
\u2013
1,163
\u00a0 \u00a0 \u00a0
Cash at bank
\u2013
302
\u2013
\u2013
\u2013
302
\u00a0 \u00a0 \u00a0
\u00a0
1,163
302
\u2013
\u2013
\u2013
1,465
\u00a0 \u00a0 \u00a0
Financial liabilities not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
\u2013
(4)
(4)
\u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
\u2013
\u2013
\u2013
\u2013
(2)
(2)
\u00a0 \u00a0 \u00a0
Bank loans
\u2013
\u2013
\u2013
\u2013
(303)
(303)
\u00a0 \u00a0 \u00a0
Corporate bond not in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(995)
(995)
\u00a0 \u00a0 \u00a0
Corporate bond in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(555)
(555)
\u00a0 \u00a0 \u00a0
Private placement debt not in a
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
hedge relationship
\u2013
\u2013
\u2013
\u2013
(1,030)
(1,030)
\u00a0 \u00a0 \u00a0
Trade and other payables
\u2013
\u2013
\u2013
\u2013
(1,026)
(1,026)
\u00a0 \u00a0 \u00a0
\u00a0
\u2013
\u2013
\u2013
\u2013
(3,915)
(3,915)
\u00a0 \u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2023, the book value and market value of the USD corporate bond were $995m and $826m respectively (2022: $994m
and $783m), the book value and market value of the EUR Corporate bond were $555m and $585m respectively (2022: $516m and $531m).
The book value and fair value of the private placement debt were $1,030m and $959m respectively (2022: $1,160m and $987m).
During the year ended 31 December 2023, acquisition consideration decreased by $56m due to $21m of payments for acquisitions
made in prior years, and $35m of remeasurement and discount unwind. The fair value of contingent consideration is\u00a0estimated
using a discounted cash \ufb02ow model. The valuation model considers the present value of expected payment, discounted using a risk-
adjusted discount rate. The expected payment is determined by considering the possible scenarios, which relate\u00a0to the achievement
of established milestones and targets, the amount to\u00a0be paid under each scenario and the probability of\u00a0each\u00a0scenario. As a\u00a0result,
contingent consideration is classi\ufb01ed as Level 3 within the fair value hierarchy.
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Carrying
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
amount
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0
through
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
hedging
\u00a0\u00a0
Amortised
\u00a0\u00a0
through
\u00a0\u00a0
pro\ufb01t
\u00a0\u00a0
\ufb01nancial
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
instruments
\u00a0\u00a0
cost
\u00a0\u00a0
OCI
\u00a0\u00a0
or loss
\u00a0\u00a0
liabilities
\u00a0\u00a0
Total
\u00a0\u00a0
Level\u00a02
\u00a0\u00a0
Level\u00a03
\u00a0\u00a0
Total
At\u00a031\u00a0December\u00a02022
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
46
\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
46
Investments
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
12
\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
18
\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
18
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0
1
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
30
\u00a0
\u2013
\u00a0\u00a0
77
\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
(78)
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(42)
\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(42)
Interest rate swaps
\u00a0\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(13)
\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(13)
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0
(1)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0\u00a0
(55)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(134)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial assets not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Trade and other receivables
\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,123
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Cash at bank
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,473
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial liabilities not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(14)
\u00a0\u00a0
(14)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Bank overdra\ufb05s
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(6)
\u00a0\u00a0
(6)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond not in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(994)
\u00a0\u00a0
(994)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(516)
\u00a0\u00a0
(516)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Private placement debt not in a
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
hedge relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,160)
\u00a0\u00a0
(1,160)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Trade and other payables
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,040)
\u00a0\u00a0
(1,040)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(3,730)
\u00a0\u00a0
(3,730)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
The fair value of contingent acquisition consideration is estimated using a discounted cash \ufb02ow model. The valuation model considers
the present value of risk adjusted expected payments, discounted using a risk-free discount rate. The expected payment is determined
by considering the possible scenarios, which relate to the achievement of established milestones and targets, the amount to be paid
under each scenario and the probability of each scenario. As a result, contingent acquisition consideration is classi\ufb01ed as Level 3 within
the fair value hierarchy.
The fair value of investments is based upon third-party pricing models for share issues. As a result, investments are considered Level 3
in\u00a0the fair value hierarchy.
The movements in 2023 and 2022 for \ufb01nancial instruments measured using Level 3 valuation methods are presented below:
\u00a0\u00a0\u00a0
2023
\u00a0\u00a0
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
Investments
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
12
\u00a0\u00a0
10
Additions
\u00a0\u00a0
\u2013
\u00a0\u00a0
2
Fair value remeasurement
\u00a0\u00a0
(4)
\u00a0\u00a0
\u2013
At 31 December
\u00a0\u00a0
8
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
18
\u00a0\u00a0
20
Receipts
\u00a0\u00a0
\u2013
\u00a0\u00a0
(2)
At 31 December
\u00a0\u00a0
18
\u00a0\u00a0
18
Acquisition consideration liability
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
(78)
\u00a0\u00a0
(84)
Arising on acquisitions
\u00a0\u00a0
\u2013
\u00a0\u00a0
(32)
Payments
\u00a0\u00a0
13
\u00a0\u00a0
20
Remeasurements
\u00a0\u00a0
33
\u00a0\u00a0
19
Discount unwind
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
At 31 December
\u00a0\u00a0
(32)
\u00a0\u00a0
(78)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28565": { "value": "10
Investments
Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January
12
10
Additions
\u2013
2
Fair value remeasurement
(4)
\u2013
At 31 December
8
12
\n16.6
Fair value of \ufb01nancial assets and liabilities
Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.
There has been no change in the classi\ufb01cation of \ufb01nancial assets and liabilities, the method and assumptions used in determining fair
value and the categorisation of \ufb01nancial assets and liabilities within the fair value hierarchy from those disclosed in the Annual Report
for\u00a0the year ended 31 December 2022.
The Group enters into derivative \ufb01nancial instruments with \ufb01nancial institutions with investment grade credit ratings. The fair value
of forward foreign exchange contracts is calculated by reference to quoted market forward exchange rates for contracts with similar
maturity pro\ufb01les. The fair value of currency swaps is determined by reference to quoted market spot rates. As a result, foreign forward
exchange contracts and currency swaps are classi\ufb01ed as Level 2 within the fair value hierarchy. The changes in counterparty credit
risk had no material e\ufb00ect on the hedge e\ufb00ectiveness for derivatives designated in hedge relationships and other \ufb01nancial instruments
recognised at fair value. The fair value of investments is based upon third-party pricing models for share issues. As a result, investments
are considered Level 3 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during 2023 and 2022. For cash
and cash equivalents, short-term loans and receivables, overdra\ufb05s and other short-term liabilities which have a maturity of less than
three\u00a0months, the book values approximate the fair values\u00a0because of\u00a0their short-term nature.
Long-term borrowings are measured in the balance sheet at amortised cost. The corporate bonds issued in October 2020 and October
2022 are publicly listed and a market price is available. The Group\u2019s other long-term borrowings are not quoted publicly, their fair values
are estimated by\u00a0discounting future contractual cash \ufb02ows to net present\u00a0values at the current market interest rates available to the
Group for similar\u00a0\ufb01nancial instruments as at the year end. The fair\u00a0value of\u00a0the\u00a0private placement notes is determined using a discounted
cash \ufb02ow model based on prevailing market rates.
The following table shows the carrying amounts and fair values of \ufb01nancial assets and \ufb01nancial liabilities, including their levels in the
fair\u00a0value hierarchy. It does not include fair value information for \ufb01nancial assets and \ufb01nancial liabilities not measured at fair value.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Carrying
\u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
amount
\u00a0 \u00a0
Fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0
Fair value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0
Fair value
through
Other
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
hedging
Amortised
through
pro\ufb01t
\ufb01nancial
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
instruments
cost
OCI
or loss
liabilities
Total
Level\u00a02
Level\u00a03
Total
At\u00a031\u00a0December\u00a02023
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward foreign exchange contracts
25
\u2013
\u2013
\u2013
\u2013
25
25
\u2013
25
Investments
\u2013
\u2013
\u2013
8
\u2013
8
\u2013
8
8
Contingent consideration receivable
\u2013
\u2013
\u2013
18
\u2013
18
\u2013
18
18
Interest rate swaps
7
\u2013
\u2013
\u2013
\u2013
7
7
\u2013
7
Currency swaps
\u2013
\u2013
2
\u2013
\u2013
2
2
\u2013
2
\u00a0
32
\u2013
2
26
\u2013
60
\u00a0 \u00a0 \u00a0
Financial liabilities measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
(32)
\u2013
(32)
\u2013
(32)
(32)
Forward foreign exchange contracts
(25)
\u2013
\u2013
\u2013
\u2013
(25)
(25)
\u2013
(25)
Currency swaps
\u2013
\u2013
(3)
\u2013
\u2013
(3)
(3)
\u2013
(3)
\u00a0
(25)
\u2013
(3)
(32)
\u2013
(60)
\u00a0 \u00a0 \u00a0
Financial assets not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Trade and other receivables
1,163
\u2013
\u2013
\u2013
\u2013
1,163
\u00a0 \u00a0 \u00a0
Cash at bank
\u2013
302
\u2013
\u2013
\u2013
302
\u00a0 \u00a0 \u00a0
\u00a0
1,163
302
\u2013
\u2013
\u2013
1,465
\u00a0 \u00a0 \u00a0
Financial liabilities not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
\u2013
(4)
(4)
\u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
\u2013
\u2013
\u2013
\u2013
(2)
(2)
\u00a0 \u00a0 \u00a0
Bank loans
\u2013
\u2013
\u2013
\u2013
(303)
(303)
\u00a0 \u00a0 \u00a0
Corporate bond not in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(995)
(995)
\u00a0 \u00a0 \u00a0
Corporate bond in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(555)
(555)
\u00a0 \u00a0 \u00a0
Private placement debt not in a
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
hedge relationship
\u2013
\u2013
\u2013
\u2013
(1,030)
(1,030)
\u00a0 \u00a0 \u00a0
Trade and other payables
\u2013
\u2013
\u2013
\u2013
(1,026)
(1,026)
\u00a0 \u00a0 \u00a0
\u00a0
\u2013
\u2013
\u2013
\u2013
(3,915)
(3,915)
\u00a0 \u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2023, the book value and market value of the USD corporate bond were $995m and $826m respectively (2022: $994m
and $783m), the book value and market value of the EUR Corporate bond were $555m and $585m respectively (2022: $516m and $531m).
The book value and fair value of the private placement debt were $1,030m and $959m respectively (2022: $1,160m and $987m).
During the year ended 31 December 2023, acquisition consideration decreased by $56m due to $21m of payments for acquisitions
made in prior years, and $35m of remeasurement and discount unwind. The fair value of contingent consideration is\u00a0estimated
using a discounted cash \ufb02ow model. The valuation model considers the present value of expected payment, discounted using a risk-
adjusted discount rate. The expected payment is determined by considering the possible scenarios, which relate\u00a0to the achievement
of established milestones and targets, the amount to\u00a0be paid under each scenario and the probability of\u00a0each\u00a0scenario. As a\u00a0result,
contingent consideration is classi\ufb01ed as Level 3 within the fair value hierarchy.
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Carrying
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
amount
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0
through
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
hedging
\u00a0\u00a0
Amortised
\u00a0\u00a0
through
\u00a0\u00a0
pro\ufb01t
\u00a0\u00a0
\ufb01nancial
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
instruments
\u00a0\u00a0
cost
\u00a0\u00a0
OCI
\u00a0\u00a0
or loss
\u00a0\u00a0
liabilities
\u00a0\u00a0
Total
\u00a0\u00a0
Level\u00a02
\u00a0\u00a0
Level\u00a03
\u00a0\u00a0
Total
At\u00a031\u00a0December\u00a02022
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
46
\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
46
Investments
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
12
\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
18
\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
18
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0
1
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
30
\u00a0
\u2013
\u00a0\u00a0
77
\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
(78)
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(42)
\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(42)
Interest rate swaps
\u00a0\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(13)
\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(13)
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0
(1)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0\u00a0
(55)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(134)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial assets not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Trade and other receivables
\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,123
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Cash at bank
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,473
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial liabilities not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(14)
\u00a0\u00a0
(14)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Bank overdra\ufb05s
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(6)
\u00a0\u00a0
(6)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond not in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(994)
\u00a0\u00a0
(994)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(516)
\u00a0\u00a0
(516)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Private placement debt not in a
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
hedge relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,160)
\u00a0\u00a0
(1,160)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Trade and other payables
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,040)
\u00a0\u00a0
(1,040)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(3,730)
\u00a0\u00a0
(3,730)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
The fair value of contingent acquisition consideration is estimated using a discounted cash \ufb02ow model. The valuation model considers
the present value of risk adjusted expected payments, discounted using a risk-free discount rate. The expected payment is determined
by considering the possible scenarios, which relate to the achievement of established milestones and targets, the amount to be paid
under each scenario and the probability of each scenario. As a result, contingent acquisition consideration is classi\ufb01ed as Level 3 within
the fair value hierarchy.
The fair value of investments is based upon third-party pricing models for share issues. As a result, investments are considered Level 3
in\u00a0the fair value hierarchy.
The movements in 2023 and 2022 for \ufb01nancial instruments measured using Level 3 valuation methods are presented below:
\u00a0\u00a0\u00a0
2023
\u00a0\u00a0
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
Investments
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
12
\u00a0\u00a0
10
Additions
\u00a0\u00a0
\u2013
\u00a0\u00a0
2
Fair value remeasurement
\u00a0\u00a0
(4)
\u00a0\u00a0
\u2013
At 31 December
\u00a0\u00a0
8
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
18
\u00a0\u00a0
20
Receipts
\u00a0\u00a0
\u2013
\u00a0\u00a0
(2)
At 31 December
\u00a0\u00a0
18
\u00a0\u00a0
18
Acquisition consideration liability
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
(78)
\u00a0\u00a0
(84)
Arising on acquisitions
\u00a0\u00a0
\u2013
\u00a0\u00a0
(32)
Payments
\u00a0\u00a0
13
\u00a0\u00a0
20
Remeasurements
\u00a0\u00a0
33
\u00a0\u00a0
19
Discount unwind
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
At 31 December
\u00a0\u00a0
(32)
\u00a0\u00a0
(78)
21
Acquisitions
Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is measured at fair value, as are the identi\ufb01able net assets acquired. Any goodwill
that\u00a0arises is tested annually for\u00a0impairment. Any gain on a bargain purchase is recognised in pro\ufb01t or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classi\ufb01ed
as\u00a0equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value
of\u00a0the\u00a0contingent consideration are recognised in pro\ufb01t or loss.
Year ended 31 December 2023
No acquisitions were completed in the year ended 31 December 2023.
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued
(see\u00a0Note 2.2 for further details).
Year ended 31 December 2022
On 18 January 2022, the Group completed the acquisition of 100% of the share capital of Engage Uni, LLC (doing business as Engage
Surgical), owner of the only cementless unicompartmental (partial) knee system commercially available in the US. The maximum
consideration, all payable in cash, is $135m and the provisional fair value consideration is $131m and includes $32m of contingent
consideration. The goodwill represents the control premium, the acquired workforce and the synergies expected from integrating
Engage Surgical into the Group\u2019s existing business. The majority of the consideration is expected to be deductible for tax purposes.
The fair value of assets acquired and liabilities assumed is set out below:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Engage
\u00a0\u00a0\u00a0\u00a0
Surgical
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Intangible assets \u2013 Product-related
\u00a0\u00a0\u00a0
44
Property, plant and equipment
\u00a0\u00a0\u00a0
2
Inventory
\u00a0\u00a0\u00a0
2
Trade and other payables
\u00a0\u00a0\u00a0
(1)
Net assets
\u00a0\u00a0\u00a0
47
Goodwill
\u00a0\u00a0\u00a0
84
Consideration (net of $nil cash acquired)
\u00a0\u00a0\u00a0
131
\n
The product-related intangible assets were valued using a relief-from-royalty methodology with the key inputs being revenue,
pro\ufb01t and\u00a0discount rate. The cash out\ufb02ow from acquisitions of $113m (2021: $285m) comprises payments of consideration of
$89m\u00a0(2021:\u00a0$236m) relating to acquisitions in the current year and payments of deferred and contingent consideration of $24m
(2021:\u00a0$49m) relating to acquisitions completed in prior years.
The carrying value of goodwill increased from $2,989m at 31 December 2021 to $3,031m at 31 December 2022. The acquisition in
the\u00a0year ended 31 December 2022 increased goodwill by $84m, this was partially o\ufb00set by foreign exchange movements of $42m.
For the year ended 31 December 2022, the contribution from Engage Surgical to revenue and to pro\ufb01t was immaterial. If the business
combination had occurred at the beginning of the year the contribution to revenue and pro\ufb01t would not have been materially di\ufb00erent.
Year ended 31 December 2021
On 4 January 2021, the Group completed the acquisition of the Extremity Orthopaedics business of Integra LifeSciences Holdings
Corporation (\u2018Extremity Orthopaedics\u2019). The acquisition signi\ufb01cantly strengthens the Group\u2019s extremities business by adding a
combination of a focused sales channel, complementary shoulder replacement and upper and lower extremities portfolio, and
a new product pipeline. The transaction comprised the acquisition of the entire issued share capital of two wholly owned US
subsidiaries of Integra LifeSciences Holdings Corporation group and certain assets of the Extremity Orthopaedics business held both
in and outside the US. The maximum consideration is $240m and the fair value of consideration is $236m and includes no deferred
or\u00a0contingent consideration.
The goodwill represents the control premium, the acquired workforce and the synergies expected from integrating Extremity
Orthopaedics into the Group\u2019s existing business, and is expected to be partly deductible for tax purposes.
The fair value of assets acquired and liabilities assumed is set out below:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Extremity
\u00a0
Orthopaedics
\u00a0
$ million
Intangible assets \u2013 Product-related
101
Intangible assets \u2013 Customer-related
11
Property, plant and equipment
22
Inventory
41
Other payables
(23)
Net deferred tax asset
(12)
Net assets
140
Goodwill
96
Consideration (net of $nil cash acquired)
236
\n
The product-related intangible assets were valued using an excess earnings methodology with the key inputs being revenue, pro\ufb01t
and\u00a0discount rate. The cash out\ufb02ow from acquisitions of $285m (2020: $170m) comprises payments of consideration of $236m
(2020:\u00a0$117m) relating to the acquisition which completed in the current year and payments of deferred and contingent consideration
of\u00a0$49m (2020: $53m) relating to acquisitions completed in prior years.
The carrying value of goodwill increased from $2,928m at 31 December 2020 to $2,989m at 31 December 2021. The acquisition in
the\u00a0year ended 31 December 2021 increased goodwill by $96m, this was partially o\ufb00set by foreign exchange movements of $35m.
For the year ended 31 December 2021, the contribution from Extremity Orthopaedics to revenue was $82m and to pro\ufb01t was
immaterial. If the business combination had occurred at the beginning of the year the contribution to revenue and pro\ufb01t would not
have\u00a0been materially di\ufb00erent.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28566": { "value": "10
Investments
Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January
12
10
Additions
\u2013
2
Fair value remeasurement
(4)
\u2013
At 31 December
8
12
\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Carrying
\u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
amount
\u00a0 \u00a0
Fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0
Fair value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0
Fair value
through
Other
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
hedging
Amortised
through
pro\ufb01t
\ufb01nancial
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
instruments
cost
OCI
or loss
liabilities
Total
Level\u00a02
Level\u00a03
Total
At\u00a031\u00a0December\u00a02023
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward foreign exchange contracts
25
\u2013
\u2013
\u2013
\u2013
25
25
\u2013
25
Investments
\u2013
\u2013
\u2013
8
\u2013
8
\u2013
8
8
Contingent consideration receivable
\u2013
\u2013
\u2013
18
\u2013
18
\u2013
18
18
Interest rate swaps
7
\u2013
\u2013
\u2013
\u2013
7
7
\u2013
7
Currency swaps
\u2013
\u2013
2
\u2013
\u2013
2
2
\u2013
2
\u00a0
32
\u2013
2
26
\u2013
60
\u00a0 \u00a0 \u00a0
Financial liabilities measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
(32)
\u2013
(32)
\u2013
(32)
(32)
Forward foreign exchange contracts
(25)
\u2013
\u2013
\u2013
\u2013
(25)
(25)
\u2013
(25)
Currency swaps
\u2013
\u2013
(3)
\u2013
\u2013
(3)
(3)
\u2013
(3)
\u00a0
(25)
\u2013
(3)
(32)
\u2013
(60)
\u00a0 \u00a0 \u00a0
Financial assets not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Trade and other receivables
1,163
\u2013
\u2013
\u2013
\u2013
1,163
\u00a0 \u00a0 \u00a0
Cash at bank
\u2013
302
\u2013
\u2013
\u2013
302
\u00a0 \u00a0 \u00a0
\u00a0
1,163
302
\u2013
\u2013
\u2013
1,465
\u00a0 \u00a0 \u00a0
Financial liabilities not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
\u2013
(4)
(4)
\u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
\u2013
\u2013
\u2013
\u2013
(2)
(2)
\u00a0 \u00a0 \u00a0
Bank loans
\u2013
\u2013
\u2013
\u2013
(303)
(303)
\u00a0 \u00a0 \u00a0
Corporate bond not in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(995)
(995)
\u00a0 \u00a0 \u00a0
Corporate bond in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(555)
(555)
\u00a0 \u00a0 \u00a0
Private placement debt not in a
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
hedge relationship
\u2013
\u2013
\u2013
\u2013
(1,030)
(1,030)
\u00a0 \u00a0 \u00a0
Trade and other payables
\u2013
\u2013
\u2013
\u2013
(1,026)
(1,026)
\u00a0 \u00a0 \u00a0
\u00a0
\u2013
\u2013
\u2013
\u2013
(3,915)
(3,915)
\u00a0 \u00a0 \u00a0
\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Carrying
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
amount
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0
through
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
hedging
\u00a0\u00a0
Amortised
\u00a0\u00a0
through
\u00a0\u00a0
pro\ufb01t
\u00a0\u00a0
\ufb01nancial
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
instruments
\u00a0\u00a0
cost
\u00a0\u00a0
OCI
\u00a0\u00a0
or loss
\u00a0\u00a0
liabilities
\u00a0\u00a0
Total
\u00a0\u00a0
Level\u00a02
\u00a0\u00a0
Level\u00a03
\u00a0\u00a0
Total
At\u00a031\u00a0December\u00a02022
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
46
\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
46
Investments
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
12
\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
18
\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
18
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0
1
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
30
\u00a0
\u2013
\u00a0\u00a0
77
\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
(78)
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(42)
\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(42)
Interest rate swaps
\u00a0\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(13)
\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(13)
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0
(1)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0\u00a0
(55)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(134)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial assets not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Trade and other receivables
\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,123
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Cash at bank
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,473
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial liabilities not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(14)
\u00a0\u00a0
(14)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Bank overdra\ufb05s
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(6)
\u00a0\u00a0
(6)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond not in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(994)
\u00a0\u00a0
(994)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(516)
\u00a0\u00a0
(516)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Private placement debt not in a
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
hedge relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,160)
\u00a0\u00a0
(1,160)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Trade and other payables
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,040)
\u00a0\u00a0
(1,040)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(3,730)
\u00a0\u00a0
(3,730)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28567": { "value": "10
Investments
Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January
12
10
Additions
\u2013
2
Fair value remeasurement
(4)
\u2013
At 31 December
8
12
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28568": { "value": "10
Investments
Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January
12
10
Additions
\u2013
2
Fair value remeasurement
(4)
\u2013
At 31 December
8
12
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28577": { "value": "Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28578": { "value": "Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.Accounting policy
Trade and other receivables are carried at amortised cost, less any allowances for uncollectable amounts. They are included
in\u00a0current\u00a0assets, except for maturities greater than 12 months a\ufb05er the balance sheet date when they are classi\ufb01ed as
non-current assets.
The Group manages credit risk through credit limits which require authorisation commensurate with the size of the limit and
which are regularly reviewed. Credit limit decisions are made based on available \ufb01nancial information and the business case.
Signi\ufb01cant receivables are regularly reviewed and monitored at Group level. The Group has no signi\ufb01cant concentration of credit risk,
with exposure spread over a large number of customers and geographies. Furthermore, the Group\u2019s principal customers are backed
by government and public or private medical insurance funding, which historically represent a lower risk of default. The maximum
exposure to credit risk at the reporting date is the fair value of each class of\u00a0receivable. The Group does not hold any collateral as
security. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28579": { "value": "Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28580": { "value": "Accounting policy
Investments, other than those related to associates, are initially recorded at fair value plus any directly attributable transaction costs
on the trade date. The Group has investments in unquoted entities and an entity that holds mainly unquoted equity securities, which
by their nature have no \ufb01xed maturity date or coupon rate. These investments are classed as fair value through pro\ufb01t or loss. The fair
value of these investments is based on the underlying fair value of the equity securities: marketable securities are valued by reference
to closing prices in the market; non-marketable securities are estimated considering factors including the purchase price; prices of
recent signi\ufb01cant private placements of securities of the same issuer; and estimates of liquidation value. Changes in fair value based
on externally observable valuation events are recognised in pro\ufb01t or loss.Accounting policy
Trade and other receivables are carried at amortised cost, less any allowances for uncollectable amounts. They are included
in\u00a0current\u00a0assets, except for maturities greater than 12 months a\ufb05er the balance sheet date when they are classi\ufb01ed as
non-current assets.
The Group manages credit risk through credit limits which require authorisation commensurate with the size of the limit and
which are regularly reviewed. Credit limit decisions are made based on available \ufb01nancial information and the business case.
Signi\ufb01cant receivables are regularly reviewed and monitored at Group level. The Group has no signi\ufb01cant concentration of credit risk,
with exposure spread over a large number of customers and geographies. Furthermore, the Group\u2019s principal customers are backed
by government and public or private medical insurance funding, which historically represent a lower risk of default. The maximum
exposure to credit risk at the reporting date is the fair value of each class of\u00a0receivable. The Group does not hold any collateral as
security. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28648": { "value": "11
Investments in associates
Accounting policy
Investments in associates, being those entities over which the Group has a signi\ufb01cant in\ufb02uence and which is neither a subsidiary
nor\u00a0a\u00a0joint\u00a0venture, are accounted for using the equity method, with the Group recording its share of the associates\u2019 pro\ufb01t and loss
and\u00a0other comprehensive income. The Group\u2019s share of associates\u2019 pro\ufb01t or loss is included in one separate income statement line
and\u00a0is\u00a0calculated a\ufb05er\u00a0deduction of their respective taxes.
The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.
At 31 December 2023, the Group holds 27.96% (2022: 28.3%) of Bioventus Inc. (Bioventus) which is the holding company of
Bioventus\u00a0LLC. The decrease in the Group\u2019s holding between 2023 and 2022 was because of the exercise of Bioventus employee share
options. The company\u2019s headquarters is located in Durham, North Carolina, US, and its medical product development is focused around
active healing therapies and the surgical performance of orthobiologics. The active healing therapies product line supports accelerated
and\u00a0more complete healing of bone fractures, and treats the chronic pain associated with osteoarthritis.
The loss a\ufb05er taxation recognised in the income statement relating to Bioventus was $30m (2022: $141m loss) which comprises
the\u00a0Group\u2019s share of loss of $30m (2022: $32m loss), and an impairment loss of $nil (2022: $109m). The balance sheet carrying value
relating to Bioventus is $16m (2022: $46m). The Group\u2019s ability to recover the value of its investment is\u00a0dependent upon the ongoing
clinical and commercial success of these products.
The Group did not identify any impairment indicator for Bioventus as part of 2023 impairment assessment. In 2022, Bioventus\u2019 trading
share price decreased signi\ufb01cantly and the company disclosed a substantial doubt about their ability to continue as a going concern.
Given these impairment indicators, management recorded an impairment loss of $109m in 2022.
The amounts recognised in the balance sheet and income statement for associates are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Balance sheet
16
46
Income statement loss
(30)
(32)
Impairment of interest in associate
\u2013
(109)
\n
Summarised \ufb01nancial information for signi\ufb01cant associates
Set out below is the summarised \ufb01nancial information for Bioventus, adjusted for di\ufb00erences with Group accounting policies. For the
2023 \ufb01nancial year, full-year information for Bioventus has not been released at the date of approval of these \ufb01nancial statements and
is\u00a0market sensitive given Bioventus is a publicly traded company. Accordingly, the summary \ufb01nancial information for 2023 is presented
for a nine-month period, with adjustments made for any signi\ufb01cant transactions or events which occur in the fourth quarter.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Summarised statement of comprehensive income
\u00a0 \u00a0
Revenue
377
386
Attributable loss for the\u00a0year
(152)
(129)
Group adjustments
1
46
17
Total comprehensive loss
(106)
(112)
Group share of loss for the\u00a0year at 27.96% (2022: 28.3%)
(30)
(32)
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Summarised balance sheet
\u00a0 \u00a0
Non-current assets
562
1,128
Current assets
249
271
Non-current liabilities
(424)
(730)
Current liabilities
(160)
(288)
Net assets
227
381
Net equity attributable to owners
227
381
Group\u2019s share of net assets at 27.96% (2022: 28.3%)
64
108
Group adjustments
1,2
(48)
47
Impairment loss
\u2013
(109)
Group\u2019s carrying amount of investment at 27.96% (2022: 28.3%)
16
46
\n
1
Group adjustments include adjustments to align with Group policy.
2
In 2023, Group adjustments also include impairment loss of share in associates of $109m from 2022.
The investment in Bioventus had a fair value less costs of disposal of $93m as at 31 December 2023.
During the year, the Group received a $nil (2022: $1m) cash distribution from its associates.
At 31 December 2023, the Group held equity investments in two other associates (2022: two) with a carrying value of $nil (2022: $nil).", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28649": { "value": "11
Investments in associates
Accounting policy
Investments in associates, being those entities over which the Group has a signi\ufb01cant in\ufb02uence and which is neither a subsidiary
nor\u00a0a\u00a0joint\u00a0venture, are accounted for using the equity method, with the Group recording its share of the associates\u2019 pro\ufb01t and loss
and\u00a0other comprehensive income. The Group\u2019s share of associates\u2019 pro\ufb01t or loss is included in one separate income statement line
and\u00a0is\u00a0calculated a\ufb05er\u00a0deduction of their respective taxes.
The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.
At 31 December 2023, the Group holds 27.96% (2022: 28.3%) of Bioventus Inc. (Bioventus) which is the holding company of
Bioventus\u00a0LLC. The decrease in the Group\u2019s holding between 2023 and 2022 was because of the exercise of Bioventus employee share
options. The company\u2019s headquarters is located in Durham, North Carolina, US, and its medical product development is focused around
active healing therapies and the surgical performance of orthobiologics. The active healing therapies product line supports accelerated
and\u00a0more complete healing of bone fractures, and treats the chronic pain associated with osteoarthritis.
The loss a\ufb05er taxation recognised in the income statement relating to Bioventus was $30m (2022: $141m loss) which comprises
the\u00a0Group\u2019s share of loss of $30m (2022: $32m loss), and an impairment loss of $nil (2022: $109m). The balance sheet carrying value
relating to Bioventus is $16m (2022: $46m). The Group\u2019s ability to recover the value of its investment is\u00a0dependent upon the ongoing
clinical and commercial success of these products.
The Group did not identify any impairment indicator for Bioventus as part of 2023 impairment assessment. In 2022, Bioventus\u2019 trading
share price decreased signi\ufb01cantly and the company disclosed a substantial doubt about their ability to continue as a going concern.
Given these impairment indicators, management recorded an impairment loss of $109m in 2022.
The amounts recognised in the balance sheet and income statement for associates are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Balance sheet
16
46
Income statement loss
(30)
(32)
Impairment of interest in associate
\u2013
(109)
\n
Summarised \ufb01nancial information for signi\ufb01cant associates
Set out below is the summarised \ufb01nancial information for Bioventus, adjusted for di\ufb00erences with Group accounting policies. For the
2023 \ufb01nancial year, full-year information for Bioventus has not been released at the date of approval of these \ufb01nancial statements and
is\u00a0market sensitive given Bioventus is a publicly traded company. Accordingly, the summary \ufb01nancial information for 2023 is presented
for a nine-month period, with adjustments made for any signi\ufb01cant transactions or events which occur in the fourth quarter.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Summarised statement of comprehensive income
\u00a0 \u00a0
Revenue
377
386
Attributable loss for the\u00a0year
(152)
(129)
Group adjustments
1
46
17
Total comprehensive loss
(106)
(112)
Group share of loss for the\u00a0year at 27.96% (2022: 28.3%)
(30)
(32)
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Summarised balance sheet
\u00a0 \u00a0
Non-current assets
562
1,128
Current assets
249
271
Non-current liabilities
(424)
(730)
Current liabilities
(160)
(288)
Net assets
227
381
Net equity attributable to owners
227
381
Group\u2019s share of net assets at 27.96% (2022: 28.3%)
64
108
Group adjustments
1,2
(48)
47
Impairment loss
\u2013
(109)
Group\u2019s carrying amount of investment at 27.96% (2022: 28.3%)
16
46
\n
1
Group adjustments include adjustments to align with Group policy.
2
In 2023, Group adjustments also include impairment loss of share in associates of $109m from 2022.
The investment in Bioventus had a fair value less costs of disposal of $93m as at 31 December 2023.
During the year, the Group received a $nil (2022: $1m) cash distribution from its associates.
At 31 December 2023, the Group held equity investments in two other associates (2022: two) with a carrying value of $nil (2022: $nil).", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28655": { "value": "Accounting policy
Investments in associates, being those entities over which the Group has a signi\ufb01cant in\ufb02uence and which is neither a subsidiary
nor\u00a0a\u00a0joint\u00a0venture, are accounted for using the equity method, with the Group recording its share of the associates\u2019 pro\ufb01t and loss
and\u00a0other comprehensive income. The Group\u2019s share of associates\u2019 pro\ufb01t or loss is included in one separate income statement line
and\u00a0is\u00a0calculated a\ufb05er\u00a0deduction of their respective taxes.
The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28656": { "value": "Accounting policy
Investments in associates, being those entities over which the Group has a signi\ufb01cant in\ufb02uence and which is neither a subsidiary
nor\u00a0a\u00a0joint\u00a0venture, are accounted for using the equity method, with the Group recording its share of the associates\u2019 pro\ufb01t and loss
and\u00a0other comprehensive income. The Group\u2019s share of associates\u2019 pro\ufb01t or loss is included in one separate income statement line
and\u00a0is\u00a0calculated a\ufb05er\u00a0deduction of their respective taxes.
The carrying amounts of investments in associates are reviewed for impairment as at the balance sheet date. For the purposes
of impairment testing, the recoverable amounts of these investments would be based on their observable market value.
Any impairment loss is subsequently reversed only to the extent that the recoverable amounts of\u00a0the investments increase.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28957": { "value": "12
Inventories
Accounting policy
Finished goods and work-in-progress are valued at factory cost, including appropriate overheads, on a \ufb01rst-in \ufb01rst-out basis.
Raw materials and bought-in \ufb01nished goods are valued at purchase price. All inventories are reduced to net realisable value where
lower than cost. Inventory acquired as\u00a0part of a business acquisition is valued at selling price less costs to sell and a pro\ufb01t allowance
for\u00a0selling e\ufb00orts.
Orthopaedic instruments are generally not sold but provided to customers and distributors for use in surgery. They are recorded
as inventory until they are deployed at which point they are transferred to plant and equipment and depreciated over their useful
economic lives of between three and seven years.
A feature of the orthopaedic business is the high level of product inventory required, some of which is located at customer premises
and is available for customers\u2019 immediate use (referred to as consignment inventory). Complete sets of product, including large and
small sizes, have to be made available in this way. These outer sizes are used less frequently than standard sizes and towards the
end of the product life cycle are inevitably in excess of requirements. Adjustments to carrying value are therefore required to be
made to orthopaedic inventory to anticipate this situation. These adjustments are calculated in accordance with a formula based on
levels of inventory compared with historical or forecast usage. This formula is applied on an individual product line basis and is \ufb01rst
applied when a product group has been on the market for two years. This method of calculation is considered appropriate based
on\u00a0experience but it involves management judgements on e\ufb00ectiveness of\u00a0inventory deployment, length of product lives, phase-out
of\u00a0old products and e\ufb03ciency of manufacturing planning systems.
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Raw materials and consumables
503
474
Work-in-progress
60
78
Finished goods and goods for resale
1,832
1,653
\u00a0
2,395
2,205
\n
Management have not changed their policy for calculating the\u00a0provision since 31 December 2022, nor is a change in the key assumptions
underlying the methodology expected in the next 12 months. As a result of increased inventory levels, the provision has increased
from $504m at 31 December 2022 to $544m at 31 December 2023. The provision, however, increased as a result of foreign exchange
movements of\u00a0$3m. The determination of the estimate of excess and obsolete inventory is a critical accounting estimate and includes
assumptions on the future usage of all di\ufb00erent items of \ufb01nished goods. The provision for excess and obsolete inventory is not considered
to have a range of potential outcomes that is signi\ufb01cantly di\ufb00erent to the $544m at 31 December 2023 in the next 12 months.
The provision has a high degree of estimation uncertainty given the range of products and sizes, with a potential range of reasonable
outcomes that could be material over the longer term.
The cost of inventories recognised as an expense and included in cost of goods sold amounted to $1,459m (2022: $1,302m, 2021:
$1,407m). In addition, $106m was recognised as an expense within cost of goods sold resulting from inventory write-o\ufb00s and provision
increases (2022: $117m, 2021: $105m).
In 2023, management wrote o\ufb00 $21m related to Engage\u2019s inventory as a result of the voluntary product discontinuation.
Notwithstanding inventory acquired within acquisitions, no inventory is carried at fair value less costs to sell in any year.", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f28962": { "value": "Accounting policy
Finished goods and work-in-progress are valued at factory cost, including appropriate overheads, on a \ufb01rst-in \ufb01rst-out basis.
Raw materials and bought-in \ufb01nished goods are valued at purchase price. All inventories are reduced to net realisable value where
lower than cost. Inventory acquired as\u00a0part of a business acquisition is valued at selling price less costs to sell and a pro\ufb01t allowance
for\u00a0selling e\ufb00orts.
Orthopaedic instruments are generally not sold but provided to customers and distributors for use in surgery. They are recorded
as inventory until they are deployed at which point they are transferred to plant and equipment and depreciated over their useful
economic lives of between three and seven years.
A feature of the orthopaedic business is the high level of product inventory required, some of which is located at customer premises
and is available for customers\u2019 immediate use (referred to as consignment inventory). Complete sets of product, including large and
small sizes, have to be made available in this way. These outer sizes are used less frequently than standard sizes and towards the
end of the product life cycle are inevitably in excess of requirements. Adjustments to carrying value are therefore required to be
made to orthopaedic inventory to anticipate this situation. These adjustments are calculated in accordance with a formula based on
levels of inventory compared with historical or forecast usage. This formula is applied on an individual product line basis and is \ufb01rst
applied when a product group has been on the market for two years. This method of calculation is considered appropriate based
on\u00a0experience but it involves management judgements on e\ufb00ectiveness of\u00a0inventory deployment, length of product lives, phase-out
of\u00a0old products and e\ufb03ciency of manufacturing planning systems.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29066": { "value": "13
Trade and other receivables
Accounting policy
Trade and other receivables are carried at amortised cost, less any allowances for uncollectable amounts. They are included
in\u00a0current\u00a0assets, except for maturities greater than 12 months a\ufb05er the balance sheet date when they are classi\ufb01ed as
non-current assets.
The Group manages credit risk through credit limits which require authorisation commensurate with the size of the limit and
which are regularly reviewed. Credit limit decisions are made based on available \ufb01nancial information and the business case.
Signi\ufb01cant receivables are regularly reviewed and monitored at Group level. The Group has no signi\ufb01cant concentration of credit risk,
with exposure spread over a large number of customers and geographies. Furthermore, the Group\u2019s principal customers are backed
by government and public or private medical insurance funding, which historically represent a lower risk of default. The maximum
exposure to credit risk at the reporting date is the fair value of each class of\u00a0receivable. The Group does not hold any collateral as
security. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).
\u00a0
\u00a0
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other receivables due within one year
\u00a0 \u00a0
Trade receivables
1,104
1,076
Less: loss allowance
(45)
(49)
Trade receivables\u00a0\u2013 net
1,059
1,027
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
27
47
Other receivables
122
114
Prepayments
92
76
\u00a0
1,300
1,264
Due a\ufb05er more than one year
\u00a0 \u00a0
Other non-current assets
18
12
\u00a0
1,318
1,276
\n
Other non-current assets primarily relate to long-term prepayments and in 2023 interest rate contracts. Management considers
that the carrying amount of trade and other receivables\u00a0approximates the fair value. Allowance losses are calculated by reviewing
lifetime expected credit losses using historic and forward-looking data on credit risk. The loss allowance relating to other receivables
is\u00a0de minimis.
The loss allowance expense for the year was $3m (2022: $4m, 2021: $3m).
The following table provides information about the ageing of and expected credit losses for trade receivables:
\u00a0
2023 Weighted
\u00a0
2023 Gross
2022 Gross
\u00a0
average loss
2023 Loss
carrying
carrying
\u00a0
rate
allowance
amount
amount\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
%\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Not past due
-0.1%
(1)
788
610
Past due not more than 3 months
-0.6%
(1)
180
228
Past due more than 3 months
-3.9%
(2)
51
97
Past due more than 6 months
-48.2%
(41)
85
141
\u00a0 \u00a0
(45)
1,104
1,076
Loss allowance
\u00a0 \u00a0
(45)
(49)
Trade receivables\u00a0\u2013 net
\u00a0 \u00a0
1,059
1,027
The Group\u2019s expected credit loss accounting policy includes guidance on how the expected credit loss percentages should be
determined; it\u00a0does not include present limits as the customer groups and risk pro\ufb01les are not consistent across all of our markets.
Each market determines their own percentages based on historic experience and future expectations, and in line with the
general\u00a0guidance in\u00a0the Group\u2019s policy.
Movements in the loss allowance were as follows:
\u00a0
\u00a0
\u00a0\u00a0
2023\u00a0
\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
At 1 January
\u00a0
49
\u00a0
\u00a0
57
\u00a0
Exchange adjustment
\u00a0
1
\u00a0
\u00a0
(3)
\u00a0
Net receivables provided during the\u00a0year
\u00a0
3
\u00a0
\u00a0
4
\u00a0
Utilisation of provision
\u00a0
(8)
\u00a0
\u00a0
(9)
\u00a0
At 31 December
\u00a0
45
\u00a0
\u00a0
49
\u00a0
\n
Trade receivables include amounts denominated in the following major currencies:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
US Dollar
506
\u00a0
465
Sterling
39
\u00a0
37
Euro
224
\u00a0
215
Other
290
\u00a0
310
Trade receivables\u00a0\u2013 net
1,059
\u00a0
1,027
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29073": { "value": "Accounting policy
Trade and other receivables are carried at amortised cost, less any allowances for uncollectable amounts. They are included
in\u00a0current\u00a0assets, except for maturities greater than 12 months a\ufb05er the balance sheet date when they are classi\ufb01ed as
non-current assets.
The Group manages credit risk through credit limits which require authorisation commensurate with the size of the limit and
which are regularly reviewed. Credit limit decisions are made based on available \ufb01nancial information and the business case.
Signi\ufb01cant receivables are regularly reviewed and monitored at Group level. The Group has no signi\ufb01cant concentration of credit risk,
with exposure spread over a large number of customers and geographies. Furthermore, the Group\u2019s principal customers are backed
by government and public or private medical insurance funding, which historically represent a lower risk of default. The maximum
exposure to credit risk at the reporting date is the fair value of each class of\u00a0receivable. The Group does not hold any collateral as
security. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29090": { "value": "Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking data on
credit risk. The Group performed the calculation of expected credit loss rates separately for customer groups which were segmented
based on common risk characteristics such as credit risk grade and type of customer (such as government and non-government).", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29101": { "value": "
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other receivables due within one year
\u00a0 \u00a0
Trade receivables
1,104
1,076
Less: loss allowance
(45)
(49)
Trade receivables\u00a0\u2013 net
1,059
1,027
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
27
47
Other receivables
122
114
Prepayments
92
76
\u00a0
1,300
1,264
Due a\ufb05er more than one year
\u00a0 \u00a0
Other non-current assets
18
12
\u00a0
1,318
1,276
\n
Other non-current assets primarily relate to long-term prepayments and in 2023 interest rate contracts. Management considers
that the carrying amount of trade and other receivables\u00a0approximates the fair value. Allowance losses are calculated by reviewing
lifetime expected credit losses using historic and forward-looking data on credit risk. The loss allowance relating to other receivables
is\u00a0de minimis.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29102": { "value": "
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other receivables due within one year
\u00a0 \u00a0
Trade receivables
1,104
1,076
Less: loss allowance
(45)
(49)
Trade receivables\u00a0\u2013 net
1,059
1,027
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
27
47
Other receivables
122
114
Prepayments
92
76
\u00a0
1,300
1,264
Due a\ufb05er more than one year
\u00a0 \u00a0
Other non-current assets
18
12
\u00a0
1,318
1,276
\n
Other non-current assets primarily relate to long-term prepayments and in 2023 interest rate contracts. Management considers
that the carrying amount of trade and other receivables\u00a0approximates the fair value. Allowance losses are calculated by reviewing
lifetime expected credit losses using historic and forward-looking data on credit risk. The loss allowance relating to other receivables
is\u00a0de minimis.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29103": { "value": "
\u00a0
2023
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other receivables due within one year
\u00a0 \u00a0
Trade receivables
1,104
1,076
Less: loss allowance
(45)
(49)
Trade receivables\u00a0\u2013 net
1,059
1,027
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
27
47
Other receivables
122
114
Prepayments
92
76
\u00a0
1,300
1,264
Due a\ufb05er more than one year
\u00a0 \u00a0
Other non-current assets
18
12
\u00a0
1,318
1,276
\n
Other non-current assets primarily relate to long-term prepayments and in 2023 interest rate contracts. Management considers
that the carrying amount of trade and other receivables\u00a0approximates the fair value. Allowance losses are calculated by reviewing
lifetime expected credit losses using historic and forward-looking data on credit risk. The loss allowance relating to other receivables
is\u00a0de minimis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29198": { "value": "Allowance losses are calculated by reviewing
lifetime expected credit losses using historic and forward-looking data on credit risk. The loss allowance relating to other receivables
is\u00a0de minimis.
The loss allowance expense for the year was $3m (2022: $4m, 2021: $3m).
The following table provides information about the ageing of and expected credit losses for trade receivables:
\u00a0
2023 Weighted
\u00a0
2023 Gross
2022 Gross
\u00a0
average loss
2023 Loss
carrying
carrying
\u00a0
rate
allowance
amount
amount\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
%\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Not past due
-0.1%
(1)
788
610
Past due not more than 3 months
-0.6%
(1)
180
228
Past due more than 3 months
-3.9%
(2)
51
97
Past due more than 6 months
-48.2%
(41)
85
141
\u00a0 \u00a0
(45)
1,104
1,076
Loss allowance
\u00a0 \u00a0
(45)
(49)
Trade receivables\u00a0\u2013 net
\u00a0 \u00a0
1,059
1,027
The Group\u2019s expected credit loss accounting policy includes guidance on how the expected credit loss percentages should be
determined; it\u00a0does not include present limits as the customer groups and risk pro\ufb01les are not consistent across all of our markets.
Each market determines their own percentages based on historic experience and future expectations, and in line with the
general\u00a0guidance in\u00a0the Group\u2019s policy.
Movements in the loss allowance were as follows:
\u00a0
\u00a0
\u00a0\u00a0
2023\u00a0
\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
At 1 January
\u00a0
49
\u00a0
\u00a0
57
\u00a0
Exchange adjustment
\u00a0
1
\u00a0
\u00a0
(3)
\u00a0
Net receivables provided during the\u00a0year
\u00a0
3
\u00a0
\u00a0
4
\u00a0
Utilisation of provision
\u00a0
(8)
\u00a0
\u00a0
(9)
\u00a0
At 31 December
\u00a0
45
\u00a0
\u00a0
49
\u00a0
\n
Trade receivables include amounts denominated in the following major currencies:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
US Dollar
506
\u00a0
465
Sterling
39
\u00a0
37
Euro
224
\u00a0
215
Other
290
\u00a0
310
Trade receivables\u00a0\u2013 net
1,059
\u00a0
1,027
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29544": { "value": "14
Trade and other payables
\u00a0
\u00a0
\u00a0
2023
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Trade and other payables due within one\u00a0year
\u00a0 \u00a0
Trade and other payables
1,016
1,029
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
28
43
Acquisition consideration
11
26
\u00a0
1,055
1,098
Other payables due a\ufb05er one\u00a0year
\u00a0 \u00a0
Acquisition consideration
25
66
Derivatives\u00a0\u2013 forward foreign exchange, currency swaps and interest rate contracts
\u2013
13
Other payables
10
11
\u00a0
35
90
\n
The acquisition consideration includes $32m (2022: $78m) contingent upon future events.
The acquisition consideration due a\ufb05er more than one year is expected to be payable as follows: $9m in 2025, $2m in 2026
and\u00a0$14m\u00a0in\u00a02027 (2022: $29m in 2024, $35m in 2025, $2m\u00a0in\u00a02026).", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29665": { "value": "15
Cash and borrowings
15.1
Net debt
Net debt comprises borrowings and credit balances on currency swaps less cash at bank.
\u00a0
\u00a0
\u00a0
2023
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Bank overdra\ufb05s, borrowings and loans due within one\u00a0year
710
111
Corporate bond
1,550
1,510
Private placement notes
625
1,055
Borrowings
2,885
2,676
Cash at bank
(302)
(350)
Credit balance on derivatives\u00a0\u2013 currency swaps
1
\u2013
(Debit)/credit balance on derivatives\u00a0\u2013 interest rate swaps
(7)
13
Net debt
2,577
2,339
Non-current lease liabilities
144
147
Current lease liabilities
55
49
Net debt including lease liabilities
2,776
2,535
\n
Borrowings are repayable as follows:
\u00a0
Within
Between
Between
Between
Between
\u00a0 \u00a0
\u00a0
one\u00a0year\u00a0or
one\u00a0and
two\u00a0and
three\u00a0and
four\u00a0and
A\ufb05er
\u00a0
\u00a0
on\u00a0demand
two\u00a0years
three\u00a0years
four\u00a0years
\ufb01ve\u00a0years
\ufb01ve\u00a0years
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank loans
303
\u2013
\u2013
\u2013
\u2013
\u2013
303
Bank overdra\ufb05s
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,550
1,550
Private placement notes
405
\u2013
75
140
60
350
1,030
Lease liabilities
1
55
44
33
25
18
35
210
\u00a0
765
44
108
165
78
1,935
3,095
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
6
\u2013
\u2013
\u2013
\u2013
\u2013
6
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,510
1,510
Private placement notes
105
430
\u2013
75
140
410
1,160
Lease liabilities
1
49
42
32
24
18
45
210
\u00a0
160
472
32
99
158
1,965
2,886
\n
1
The lease liabilities presented above of $210m (2022: $210m) are on an undiscounted basis. The lease liabilities on a discounted basis, as outlined above, are $199m (2022:\u00a0$196m).
15.2
Liquidity risk exposures
The Board has established a set of policies to manage funding and currency risks. The Group only uses derivative \ufb01nancial instruments
to\u00a0manage the \ufb01nancial risks associated with underlying business activities and their \ufb01nancing. Liquidity risk is the risk that the Group is
not able to settle or meet its obligations on time or at a reasonable price. The Group\u2019s policy is to ensure that there is su\ufb03cient funding
and\u00a0facilities in place to meet foreseeable borrowing requirements. The Group manages and monitors liquidity risk through regular
reporting of current cash and borrowing balances and periodic preparation and review of short-and\u00a0medium-term cash forecasts,
having\u00a0regard to the maturities of investments and borrowing facilities. The Group has available committed facilities of $3.6bn
(2022:\u00a0$3.7bn). During 2022, the Group issued its debut EUR Corporate Bond, in the form of \u20ac500m (before expenses and underwriting
discounts) of\u00a0notes bearing an interest rate of 4.565% repayable in 2029. In 2023, the Group repaid $130m of private placement debt.
The interest payable on borrowings under committed facilities is either at\u00a0\ufb01xed\u00a0or \ufb02oating rates. Euro \ufb02oating rates are typically
based\u00a0on\u00a0EURIBOR and US Dollar rates are typically based on the Term Secured Overnight Financing Rate (Term SOFR). The Company is
subject to \ufb01nancial covenants under its private placement agreements. The \ufb01nancial covenants are tested at the end of each half year
for the 12 months ending on the last day of the testing period. As of 31 December 2023, the Company was in compliance with these
covenants. The facilities are also subject to\u00a0customary events of default, none of which are currently anticipated to occur.
The Group re\ufb01nanced its $1bn Revolving Credit Facility (\u201cRCF\u201d) in Q4 2023. This extends the facility maturity to 2028, with options to
extend the maturity to 2030.
The Group\u2019s committed facilities at 31 December 2023 are:
Facility
\u00a0
\u00a0
\u00a0
\u00a0
Date due
$100 million 3.89% Senior Notes
January 2024
$305 million 3.36% Senior Notes
November 2024
$75 million 3.99% Senior Notes
January 2026
$140 million 2.83% Senior Notes
June 2027
$60 million 2.90% Senior Notes
June 2028
$1.0 billion syndicated revolving credit facility
October 2028
$100 million 2.97% Senior Notes
June 2029
\u20ac500 million 4.565% EUR Corporate Bond
October 2029
$95 million 2.99% Senior Notes
June 2030
$1.0 billion 2.032% USD Corporate Bond
October 2030
$155 million 3.09% Senior Notes
June 2032
\n
15.3
Year end \ufb01nancial liabilities by contractual maturity
The table below analyses the Group\u2019s year end \ufb01nancial liabilities by contractual maturity date, including contractual interest payments
and excluding the impact of netting arrangements:
\u00a0
\u00a0
\u00a0
Within\u00a0one
Between
Between
\u00a0 \u00a0
\u00a0
year\u00a0or\u00a0on
one\u00a0and
two\u00a0and
A\ufb05er
\u00a0
\u00a0
demand
two\u00a0years
\ufb01ve\u00a0years
\ufb01ve\u00a0years
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Non-derivative \ufb01nancial liabilities:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s and loans
\u00a0
305
\u2013
\u2013
\u2013
305
Corporate bond
\u00a0
53
53
158
1,614
1,878
Trade and other payables
\u00a0
1,016
\u2013
\u2013
\u2013
1,016
Private placement notes
\u00a0
434
19
317
373
1,143
Acquisition consideration
\u00a0
11
9
2
15
37
Derivative \ufb01nancial instruments:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Currency swaps/forward foreign exchange contracts\u00a0\u2013 out\ufb02ow
\u00a0
2,913
\u2013
\u2013
\u2013
2,913
Currency swaps/forward foreign exchange contracts\u00a0\u2013 in\ufb02ow
\u00a0
(2,912)
\u2013
\u2013
\u2013
(2,912)
\u00a0
\u00a0
1,820
81
477
2,002
4,380
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Non-derivative \ufb01nancial liabilities:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s and loans
\u00a0
6
\u2013
\u2013
\u2013
6
Corporate bond
37
37
111
1,620
1,805
Trade and other payables
\u00a0
1,029
\u2013
\u2013
\u2013
1,029
Private placement notes
\u00a0
143
461
265
444
1,313
Acquisition consideration
\u00a0
26
31
39
\u2013
96
Derivative \ufb01nancial instruments:
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Currency swaps/forward foreign exchange contracts\u00a0\u2013 out\ufb02ow
\u00a0
2,598
\u2013
\u2013
\u2013
2,598
Currency swaps/forward foreign exchange contracts\u00a0\u2013 in\ufb02ow
\u00a0
(2,601)
\u2013
\u2013
\u2013
(2,601)
\u00a0
\u00a0
1,238
529
415
2,064
4,246
\n
The amounts in the tables above are undiscounted cash \ufb02ows, which di\ufb00er from the amounts included in the balance sheet where the
underlying cash \ufb02ows have been discounted.
15.4
Liquidity and capital resources
The Group\u2019s policy is to ensure that it has su\ufb03cient funding and facilities to meet foreseeable borrowing requirements.
At 31 December 2023, the Group held $300m (2022: $344m, 2021: $1,285m) in cash net of bank overdra\ufb05s. The Group had committed
facilities available of $3.6bn at 31 December 2023 of which $2.9bn was drawn.
The principal variations in the Group\u2019s borrowing requirements result from the timing of dividend payments, acquisitions and disposals
of businesses, timing of capital expenditure and working capital \ufb02uctuations. Smith+Nephew believes that its capital expenditure needs
and its working capital funding for 2024, as well as its other known or expected commitments or liabilities, can be met from its existing
resources and facilities. The Group\u2019s net debt including leases increased from $2.5bn at the beginning of 2023 to $2.8bn at the end
of\u00a02023, representing an overall increase of $0.3bn.", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f29670": { "value": "15.1
Net debt
Net debt comprises borrowings and credit balances on currency swaps less cash at bank.
\u00a0
\u00a0
\u00a0
2023
2022\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Bank overdra\ufb05s, borrowings and loans due within one\u00a0year
710
111
Corporate bond
1,550
1,510
Private placement notes
625
1,055
Borrowings
2,885
2,676
Cash at bank
(302)
(350)
Credit balance on derivatives\u00a0\u2013 currency swaps
1
\u2013
(Debit)/credit balance on derivatives\u00a0\u2013 interest rate swaps
(7)
13
Net debt
2,577
2,339
Non-current lease liabilities
144
147
Current lease liabilities
55
49
Net debt including lease liabilities
2,776
2,535
\n
Borrowings are repayable as follows:
\u00a0
Within
Between
Between
Between
Between
\u00a0 \u00a0
\u00a0
one\u00a0year\u00a0or
one\u00a0and
two\u00a0and
three\u00a0and
four\u00a0and
A\ufb05er
\u00a0
\u00a0
on\u00a0demand
two\u00a0years
three\u00a0years
four\u00a0years
\ufb01ve\u00a0years
\ufb01ve\u00a0years
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank loans
303
\u2013
\u2013
\u2013
\u2013
\u2013
303
Bank overdra\ufb05s
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,550
1,550
Private placement notes
405
\u2013
75
140
60
350
1,030
Lease liabilities
1
55
44
33
25
18
35
210
\u00a0
765
44
108
165
78
1,935
3,095
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
6
\u2013
\u2013
\u2013
\u2013
\u2013
6
Corporate bond
\u2013
\u2013
\u2013
\u2013
\u2013
1,510
1,510
Private placement notes
105
430
\u2013
75
140
410
1,160
Lease liabilities
1
49
42
32
24
18
45
210
\u00a0
160
472
32
99
158
1,965
2,886
\n
1
The lease liabilities presented above of $210m (2022: $210m) are on an undiscounted basis. The lease liabilities on a discounted basis, as outlined above, are $199m (2022:\u00a0$196m).", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30108": { "value": "15.2
Liquidity risk exposures
The Board has established a set of policies to manage funding and currency risks. The Group only uses derivative \ufb01nancial instruments
to\u00a0manage the \ufb01nancial risks associated with underlying business activities and their \ufb01nancing. Liquidity risk is the risk that the Group is
not able to settle or meet its obligations on time or at a reasonable price. The Group\u2019s policy is to ensure that there is su\ufb03cient funding
and\u00a0facilities in place to meet foreseeable borrowing requirements. The Group manages and monitors liquidity risk through regular
reporting of current cash and borrowing balances and periodic preparation and review of short-and\u00a0medium-term cash forecasts,
having\u00a0regard to the maturities of investments and borrowing facilities. The Group has available committed facilities of $3.6bn
(2022:\u00a0$3.7bn). During 2022, the Group issued its debut EUR Corporate Bond, in the form of \u20ac500m (before expenses and underwriting
discounts) of\u00a0notes bearing an interest rate of 4.565% repayable in 2029. In 2023, the Group repaid $130m of private placement debt.
The interest payable on borrowings under committed facilities is either at\u00a0\ufb01xed\u00a0or \ufb02oating rates. Euro \ufb02oating rates are typically
based\u00a0on\u00a0EURIBOR and US Dollar rates are typically based on the Term Secured Overnight Financing Rate (Term SOFR). The Company is
subject to \ufb01nancial covenants under its private placement agreements. The \ufb01nancial covenants are tested at the end of each half year
for the 12 months ending on the last day of the testing period. As of 31 December 2023, the Company was in compliance with these
covenants. The facilities are also subject to\u00a0customary events of default, none of which are currently anticipated to occur.
The Group re\ufb01nanced its $1bn Revolving Credit Facility (\u201cRCF\u201d) in Q4 2023. This extends the facility maturity to 2028, with options to
extend the maturity to 2030.
The Group\u2019s committed facilities at 31 December 2023 are:
Facility
\u00a0
\u00a0
\u00a0
\u00a0
Date due
$100 million 3.89% Senior Notes
January 2024
$305 million 3.36% Senior Notes
November 2024
$75 million 3.99% Senior Notes
January 2026
$140 million 2.83% Senior Notes
June 2027
$60 million 2.90% Senior Notes
June 2028
$1.0 billion syndicated revolving credit facility
October 2028
$100 million 2.97% Senior Notes
June 2029
\u20ac500 million 4.565% EUR Corporate Bond
October 2029
$95 million 2.99% Senior Notes
June 2030
$1.0 billion 2.032% USD Corporate Bond
October 2030
$155 million 3.09% Senior Notes
June 2032
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30568": { "value": "15.4
Liquidity and capital resources
The Group\u2019s policy is to ensure that it has su\ufb03cient funding and facilities to meet foreseeable borrowing requirements.
At 31 December 2023, the Group held $300m (2022: $344m, 2021: $1,285m) in cash net of bank overdra\ufb05s. The Group had committed
facilities available of $3.6bn at 31 December 2023 of which $2.9bn was drawn.
The principal variations in the Group\u2019s borrowing requirements result from the timing of dividend payments, acquisitions and disposals
of businesses, timing of capital expenditure and working capital \ufb02uctuations. Smith+Nephew believes that its capital expenditure needs
and its working capital funding for 2024, as well as its other known or expected commitments or liabilities, can be met from its existing
resources and facilities. The Group\u2019s net debt including leases increased from $2.5bn at the beginning of 2023 to $2.8bn at the end
of\u00a02023, representing an overall increase of $0.3bn.", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30610": { "value": "16
Financial instruments and risk management
Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.
On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.
16.1
Foreign exchange risk management
The Group operates in many countries and as a consequence has transactional and translational foreign exchange exposure. It is the
Group\u2019s\u00a0policy for operating units not to hold material unhedged monetary assets or liabilities other than in their functional currencies.
Foreign exchange variations a\ufb00ect trading results in two ways. Firstly, on translation of overseas sales and pro\ufb01ts into US Dollars
and\u00a0secondly, transactional exposures arising where some, or all of the costs of sale are incurred in a di\ufb00erent currency from the sale.
The principal transactional exposures arise as the proportion of costs in US Dollars, Sterling and Swiss Francs exceed the proportion
of\u00a0sales in each of these currencies and correspondingly the proportion of sales in Euros exceeds the proportion of costs in Euros.
The impact of currency movements on the cost of purchases is partly mitigated by the use of forward foreign exchange contracts.
The Group uses forward foreign exchange contracts, designated as cash \ufb02ow hedges, to hedge forecast third-party trading cash \ufb02ows
up\u00a0to\u00a0one year. When a commitment is entered into, forward foreign exchange contracts are normally used to increase the hedge
to 100% of the exposure. Cash \ufb02ows relating to cash \ufb02ow hedges are expected to occur within 12 months of inception and pro\ufb01ts
and losses on hedges are expected to enter into the determination of pro\ufb01t (within cost of goods sold) within a further 12-month
period. The principal currencies hedged by forward foreign exchange contracts are US Dollars, Euros, Sterling and Singapore Dollars.
At 31 December 2023, the Group had contracted to exchange within one year the equivalent of $2.4bn (2022: $2.2bn). Based on
the Group\u2019s net borrowings as at 31 December 2023, if the US Dollar were to weaken against all currencies by 10%, the Group\u2019s
net\u00a0borrowings would increase by\u00a0$37m (2022: $41m) principally due to the Euro-denominated term loans.
If the US Dollar were to weaken by 10% against all other currencies, then the fair value of the forward foreign exchange contracts as
at 31 December 2023 would have been $67m lower (2022: $50m lower). Similarly, if the Euro were to weaken by 10% against all other
currencies, then the fair value of the forward foreign exchange contracts as at 31 December 2023 would have been $38m higher
(2022:\u00a0$35m higher). Movements in the fair value of forward foreign exchange contracts would be recognised in other comprehensive
income or in the income statement.
A 10% strengthening of the US Dollar or Euro against all other currencies at 31 December 2023 would have had the equal but opposite
e\ufb00ect to the amounts shown above, on the basis that all other variables remain constant.
The Group\u2019s policy is to hedge all actual foreign exchange exposures and the Group\u2019s forward foreign exchange contracts are designated
as cash \ufb02ow hedges. The net impact of transaction-related foreign exchange on the income statement from a movement in exchange
rates on the value of forward foreign exchange contracts is not signi\ufb01cant. In addition, the movements in the fair value of other \ufb01nancial
instruments used for hedging such as currency swaps for which hedge accounting is not applied o\ufb00set movements in the values of
assets and liabilities and are recognised through the income statement. Hedge ine\ufb00ectiveness is caused by actual cash \ufb02ows in foreign
currencies varying from forecast cash \ufb02ows.
16.2
Interest rate risk management
The Group is exposed to interest rate risk on cash, borrowings and certain currency and interest rate swaps which are at \ufb02oating
rates. When required the Group uses interest rate derivatives to meet its objective of protecting borrowing costs within parameters
set by the\u00a0Board. These interest rate derivatives are accounted for as cash \ufb02ow hedges and, as such, changes in fair value resulting
from changes in market interest rates are recognised in other comprehensive income and accumulated in the hedging reserve, with
the fair\u00a0value of the interest rate derivatives recorded in the balance sheet. Additionally, the Group uses interest rate swaps to reduce
the overall level of \ufb01xed rate debt, within parameters set by the Board. When used in this way, interest rate derivatives are accounted
for\u00a0as\u00a0fair value hedges. The fair value movement of the derivative is o\ufb00set in the income statement against the fair value movement
in\u00a0the\u00a0underlying \ufb01xed rate debt.
In 2022, the Group entered into a new \u20ac500m \ufb01xed to \ufb02oating interest rate swap.
Based on the Group\u2019s gross borrowings and cash as at 31 December 2023, if interest rates were to increase by 100 basis points in all
currencies, then the annual net interest charge would increase by $5m (2022: $4m). A decrease in interest rates by 100 basis points
in\u00a0all\u00a0currencies would have an equal but opposite e\ufb00ect to the amounts shown above.
16.3
Credit risk management
The Group limits exposure to credit risk on counterparties used for \ufb01nancial instruments through a system of internal credit limits.
The \ufb01nancial exposure of a counterparty is determined as the total of cash and deposits, plus the risk on derivative instruments,
assessed as the fair value of the instrument plus a risk element based on the nominal value and the historic volatility of the market
value of the instrument. The Group does not anticipate non-performance of counterparties and believes it is not subject to material
concentration of credit risk as the Group operates within a policy of counterparty limits designed to reduce exposure to any
single counterparty.
The maximum credit risk exposure on derivatives at 31 December 2023 was $27m (2022: $47m), being the total debit fair values
on\u00a0forward foreign exchange contracts and currency swaps. The maximum credit risk exposure on cash at bank at 31 December
2023 was\u00a0$302m (2022: $350m). The\u00a0Group\u2019s exposure to credit risk on cash is mitigated as the amounts are held in a wide number
of\u00a0high\u00a0credit quality \ufb01nancial institutions. Credit risk on trade receivables is detailed in Note 13.
The amounts relating to items designated as hedging instruments were as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Carrying
Carrying
Changes in
Hedge
Amounts reclassi\ufb01ed
\u00a0
\u00a0
Nominal
amount
amount
fair value
ine\ufb00ectiveness
from hedging reserve
\u00a0
\u00a0
amount
assets
liabilities
in OCI
in pro\ufb01t or loss
to pro\ufb01t or loss
Line item in
\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
pro\ufb01t or loss
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,913
27
(28)
(3)
\u2013
(25)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
7
\u2013
\u2013
\u2013
\u2013
Fair value hedge
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,598
47
(43)
(13)
\u2013
(37)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
\u2013
(13)
\u2013
\u2013
\u2013
Fair value hedge
\n
1
Presented in Trade and other receivables and Trade and other payables on the Balance Sheet. The nominal amount is in $ million.
2
Presented in Non-current other receivables in 2023 and in Non-current other payables in 2022 on the Balance Sheet. The nominal amount is in \u20ac million.
16.4
Net investment hedge
Part of the Group\u2019s net investment in its Euro subsidiaries is hedged by \u20ac500m ($552m equivalent) of our debut EUR Corporate Bond
which mitigates the\u00a0foreign currency risk arising from the subsidiaries\u2019 net assets. The Bond is designated as a hedging instrument for
the\u00a0changes in\u00a0the\u00a0value of the net investment that is attributable to changes in the EUR/USD spot rate.
To assess hedge e\ufb00ectiveness, the Group determines the economic relationship between the hedging instrument and the hedged item
by comparing changes in the carrying amount of the debt that is attributable to a change in the spot rate with changes in the investment
in the foreign operation due to movements in the spot rate (the o\ufb00set method). The Group\u2019s policy is to hedge the net investment only
to\u00a0the extent of the debt principal. Hedge ine\ufb00ectiveness occurs if the value of the Euro-denominated Corporate Bond exceeds the
value\u00a0of\u00a0the Euro subsidiaries.
16.5
Currency and interest rate pro\ufb01le of interest bearing liabilities and assets
Short-term receivables and payables are excluded from the following disclosures.
Currency and interest rate pro\ufb01le of interest bearing liabilities:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Fixed rate liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Weighted\u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
average
\u00a0 \u00a0 \u00a0
Interest
\u00a0 \u00a0 \u00a0
Weighted
time\u00a0
\u00a0
Gross
Currency
rate
Total
Floating
Fixed\u00a0rate
average
for\u00a0which
\u00a0
borrowings
swaps
swaps
liabilities
rate liabilities
liabilities
interest\u00a0rate
rate\u00a0is\u00a0\ufb01xed
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
%\u00a0
\u00a0
\u00a0
Years
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
(2,324)
(329)
\u2013
(2,653)
(628)
(2,025)
2.7
5.1
Other
(561)
(219)
\u2013
(780)
(224)
(556)
\u00a0 \u00a0
Total interest bearing liabilities
(2,885)
(548)
\u2013
(3,433)
(852)
(2,581)
\u00a0 \u00a0
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
(2,159)
(163)
\u2013
(2,322)
(193)
(2,129)
2.7
5.9
Other
(517)
(206)
(13)
(736)
(220)
(516)
\u00a0 \u00a0
Total interest bearing liabilities
(2,676)
(369)
(13)
(3,058)
(413)
(2,645)
\u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
In 2023, the Group also had liabilities due for deferred and contingent acquisition consideration (denominated in US Dollars, Swiss Francs
and Euros) totalling $36m (2022: $92m, 2021: $91m) on which no interest was payable (see Note 14). There were no other\u00a0signi\ufb01cant
interest bearing or non-interest bearing \ufb01nancial liabilities. Euro \ufb02oating rates are typically based on EURIBOR and US Dollar rates are
typically based on Term SOFR. The\u00a0weighted average interest rate on \ufb02oating rate borrowings as at\u00a031 December 2023 was almost 6%
(2022:\u00a0over than 3%).
Currency and interest rate pro\ufb01le of interest bearing assets:
\u00a0
\u00a0
\u00a0
Cash
Currency\u00a0
Interest rate\u00a0
 \u00a0
\u00a0
\u00a0
Floating
Fixed\u00a0
\u00a0
at\u00a0bank
swaps\u00a0
swaps\u00a0
Total\u00a0assets
rate\u00a0assets
rate\u00a0assets
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
98
217
\u2013
315
315
\u2013
Other
204
331
7
542
542
\u2013
Total interest bearing assets
302
548
7
857
857
\u2013
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
US Dollar
207
205
\u2013
412
412
\u2013
Other
143
164
\u2013
307
307
\u2013
Total interest bearing assets
350
369
\u2013
719
719
\u2013
\n
Floating rates on assets are typically based on the short-term deposit rates relevant to the currency concerned.
16.6
Fair value of \ufb01nancial assets and liabilities
Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.
There has been no change in the classi\ufb01cation of \ufb01nancial assets and liabilities, the method and assumptions used in determining fair
value and the categorisation of \ufb01nancial assets and liabilities within the fair value hierarchy from those disclosed in the Annual Report
for\u00a0the year ended 31 December 2022.
The Group enters into derivative \ufb01nancial instruments with \ufb01nancial institutions with investment grade credit ratings. The fair value
of forward foreign exchange contracts is calculated by reference to quoted market forward exchange rates for contracts with similar
maturity pro\ufb01les. The fair value of currency swaps is determined by reference to quoted market spot rates. As a result, foreign forward
exchange contracts and currency swaps are classi\ufb01ed as Level 2 within the fair value hierarchy. The changes in counterparty credit
risk had no material e\ufb00ect on the hedge e\ufb00ectiveness for derivatives designated in hedge relationships and other \ufb01nancial instruments
recognised at fair value. The fair value of investments is based upon third-party pricing models for share issues. As a result, investments
are considered Level 3 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during 2023 and 2022. For cash
and cash equivalents, short-term loans and receivables, overdra\ufb05s and other short-term liabilities which have a maturity of less than
three\u00a0months, the book values approximate the fair values\u00a0because of\u00a0their short-term nature.
Long-term borrowings are measured in the balance sheet at amortised cost. The corporate bonds issued in October 2020 and October
2022 are publicly listed and a market price is available. The Group\u2019s other long-term borrowings are not quoted publicly, their fair values
are estimated by\u00a0discounting future contractual cash \ufb02ows to net present\u00a0values at the current market interest rates available to the
Group for similar\u00a0\ufb01nancial instruments as at the year end. The fair\u00a0value of\u00a0the\u00a0private placement notes is determined using a discounted
cash \ufb02ow model based on prevailing market rates.
The following table shows the carrying amounts and fair values of \ufb01nancial assets and \ufb01nancial liabilities, including their levels in the
fair\u00a0value hierarchy. It does not include fair value information for \ufb01nancial assets and \ufb01nancial liabilities not measured at fair value.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Carrying
\u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
amount
\u00a0 \u00a0
Fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0
Fair value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0
Fair value
through
Other
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
hedging
Amortised
through
pro\ufb01t
\ufb01nancial
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
instruments
cost
OCI
or loss
liabilities
Total
Level\u00a02
Level\u00a03
Total
At\u00a031\u00a0December\u00a02023
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward foreign exchange contracts
25
\u2013
\u2013
\u2013
\u2013
25
25
\u2013
25
Investments
\u2013
\u2013
\u2013
8
\u2013
8
\u2013
8
8
Contingent consideration receivable
\u2013
\u2013
\u2013
18
\u2013
18
\u2013
18
18
Interest rate swaps
7
\u2013
\u2013
\u2013
\u2013
7
7
\u2013
7
Currency swaps
\u2013
\u2013
2
\u2013
\u2013
2
2
\u2013
2
\u00a0
32
\u2013
2
26
\u2013
60
\u00a0 \u00a0 \u00a0
Financial liabilities measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
(32)
\u2013
(32)
\u2013
(32)
(32)
Forward foreign exchange contracts
(25)
\u2013
\u2013
\u2013
\u2013
(25)
(25)
\u2013
(25)
Currency swaps
\u2013
\u2013
(3)
\u2013
\u2013
(3)
(3)
\u2013
(3)
\u00a0
(25)
\u2013
(3)
(32)
\u2013
(60)
\u00a0 \u00a0 \u00a0
Financial assets not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Trade and other receivables
1,163
\u2013
\u2013
\u2013
\u2013
1,163
\u00a0 \u00a0 \u00a0
Cash at bank
\u2013
302
\u2013
\u2013
\u2013
302
\u00a0 \u00a0 \u00a0
\u00a0
1,163
302
\u2013
\u2013
\u2013
1,465
\u00a0 \u00a0 \u00a0
Financial liabilities not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
\u2013
(4)
(4)
\u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
\u2013
\u2013
\u2013
\u2013
(2)
(2)
\u00a0 \u00a0 \u00a0
Bank loans
\u2013
\u2013
\u2013
\u2013
(303)
(303)
\u00a0 \u00a0 \u00a0
Corporate bond not in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(995)
(995)
\u00a0 \u00a0 \u00a0
Corporate bond in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(555)
(555)
\u00a0 \u00a0 \u00a0
Private placement debt not in a
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
hedge relationship
\u2013
\u2013
\u2013
\u2013
(1,030)
(1,030)
\u00a0 \u00a0 \u00a0
Trade and other payables
\u2013
\u2013
\u2013
\u2013
(1,026)
(1,026)
\u00a0 \u00a0 \u00a0
\u00a0
\u2013
\u2013
\u2013
\u2013
(3,915)
(3,915)
\u00a0 \u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2023, the book value and market value of the USD corporate bond were $995m and $826m respectively (2022: $994m
and $783m), the book value and market value of the EUR Corporate bond were $555m and $585m respectively (2022: $516m and $531m).
The book value and fair value of the private placement debt were $1,030m and $959m respectively (2022: $1,160m and $987m).
During the year ended 31 December 2023, acquisition consideration decreased by $56m due to $21m of payments for acquisitions
made in prior years, and $35m of remeasurement and discount unwind. The fair value of contingent consideration is\u00a0estimated
using a discounted cash \ufb02ow model. The valuation model considers the present value of expected payment, discounted using a risk-
adjusted discount rate. The expected payment is determined by considering the possible scenarios, which relate\u00a0to the achievement
of established milestones and targets, the amount to\u00a0be paid under each scenario and the probability of\u00a0each\u00a0scenario. As a\u00a0result,
contingent consideration is classi\ufb01ed as Level 3 within the fair value hierarchy.
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Carrying
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
amount
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0
through
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
hedging
\u00a0\u00a0
Amortised
\u00a0\u00a0
through
\u00a0\u00a0
pro\ufb01t
\u00a0\u00a0
\ufb01nancial
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
instruments
\u00a0\u00a0
cost
\u00a0\u00a0
OCI
\u00a0\u00a0
or loss
\u00a0\u00a0
liabilities
\u00a0\u00a0
Total
\u00a0\u00a0
Level\u00a02
\u00a0\u00a0
Level\u00a03
\u00a0\u00a0
Total
At\u00a031\u00a0December\u00a02022
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
46
\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
46
Investments
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
12
\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
18
\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
18
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0
1
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
30
\u00a0
\u2013
\u00a0\u00a0
77
\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
(78)
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(42)
\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(42)
Interest rate swaps
\u00a0\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(13)
\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(13)
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0
(1)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0\u00a0
(55)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(134)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial assets not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Trade and other receivables
\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,123
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Cash at bank
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,473
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial liabilities not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(14)
\u00a0\u00a0
(14)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Bank overdra\ufb05s
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(6)
\u00a0\u00a0
(6)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond not in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(994)
\u00a0\u00a0
(994)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(516)
\u00a0\u00a0
(516)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Private placement debt not in a
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
hedge relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,160)
\u00a0\u00a0
(1,160)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Trade and other payables
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,040)
\u00a0\u00a0
(1,040)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(3,730)
\u00a0\u00a0
(3,730)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
The fair value of contingent acquisition consideration is estimated using a discounted cash \ufb02ow model. The valuation model considers
the present value of risk adjusted expected payments, discounted using a risk-free discount rate. The expected payment is determined
by considering the possible scenarios, which relate to the achievement of established milestones and targets, the amount to be paid
under each scenario and the probability of each scenario. As a result, contingent acquisition consideration is classi\ufb01ed as Level 3 within
the fair value hierarchy.
The fair value of investments is based upon third-party pricing models for share issues. As a result, investments are considered Level 3
in\u00a0the fair value hierarchy.
The movements in 2023 and 2022 for \ufb01nancial instruments measured using Level 3 valuation methods are presented below:
\u00a0\u00a0\u00a0
2023
\u00a0\u00a0
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
Investments
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
12
\u00a0\u00a0
10
Additions
\u00a0\u00a0
\u2013
\u00a0\u00a0
2
Fair value remeasurement
\u00a0\u00a0
(4)
\u00a0\u00a0
\u2013
At 31 December
\u00a0\u00a0
8
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
18
\u00a0\u00a0
20
Receipts
\u00a0\u00a0
\u2013
\u00a0\u00a0
(2)
At 31 December
\u00a0\u00a0
18
\u00a0\u00a0
18
Acquisition consideration liability
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
(78)
\u00a0\u00a0
(84)
Arising on acquisitions
\u00a0\u00a0
\u2013
\u00a0\u00a0
(32)
Payments
\u00a0\u00a0
13
\u00a0\u00a0
20
Remeasurements
\u00a0\u00a0
33
\u00a0\u00a0
19
Discount unwind
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
At 31 December
\u00a0\u00a0
(32)
\u00a0\u00a0
(78)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30615": { "value": "Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.
On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30616": { "value": "Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.
On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30617": { "value": "Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.
On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30620": { "value": "Accounting policy
Derivative \ufb01nancial instruments
Derivative \ufb01nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivative \ufb01nancial
instruments that are designated and e\ufb00ective as cash \ufb02ow hedges of forecast third-party transactions are recognised in other
comprehensive income until the associated asset or liability is recognised. Amounts taken to other comprehensive income are
transferred to the income statement in the period in which the hedged transaction a\ufb00ects pro\ufb01t and loss. Where the hedged item
is\u00a0the cost of a non-\ufb01nancial asset, the amounts taken to other comprehensive income are transferred to the initial carrying value
of\u00a0the asset.On adoption of IFRS 9 on 1 January 2018, the Group elected to continue to apply the hedge accounting guidance in IAS 39
Financial
Instruments: Recognition and Measurement
. Changes in the fair values of hedging instruments that are designated and e\ufb00ective as
net investment hedges are matched in other comprehensive income against changes in value of the related net assets. Interest rate
derivatives transacted to \ufb01x interest rates on \ufb02oating rate borrowings are accounted for as cash \ufb02ow hedges and changes in the
fair values resulting from changes in market interest rates are recognised in other comprehensive income. Amounts taken to other
comprehensive income are transferred to the income statement when the hedged transaction a\ufb00ects pro\ufb01t and loss. Interest rate
derivatives transacted to convert \ufb01xed rate borrowings into \ufb02oating rate borrowings are accounted for as fair value hedges and
changes in the fair values resulting from changes in market interest rates are recognised in the income statement. Any ine\ufb00ectiveness
on hedging instruments and changes in the fair value of derivative \ufb01nancial instruments that do not qualify for hedge accounting
are\u00a0recognised in the income statement within other\u00a0\ufb01nance costs as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer quali\ufb01es for
hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained there until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive income is transferred to the income statement.Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30670": { "value": "16.1
Foreign exchange risk management
The Group operates in many countries and as a consequence has transactional and translational foreign exchange exposure. It is the
Group\u2019s\u00a0policy for operating units not to hold material unhedged monetary assets or liabilities other than in their functional currencies.
Foreign exchange variations a\ufb00ect trading results in two ways. Firstly, on translation of overseas sales and pro\ufb01ts into US Dollars
and\u00a0secondly, transactional exposures arising where some, or all of the costs of sale are incurred in a di\ufb00erent currency from the sale.
The principal transactional exposures arise as the proportion of costs in US Dollars, Sterling and Swiss Francs exceed the proportion
of\u00a0sales in each of these currencies and correspondingly the proportion of sales in Euros exceeds the proportion of costs in Euros.
The impact of currency movements on the cost of purchases is partly mitigated by the use of forward foreign exchange contracts.
The Group uses forward foreign exchange contracts, designated as cash \ufb02ow hedges, to hedge forecast third-party trading cash \ufb02ows
up\u00a0to\u00a0one year. When a commitment is entered into, forward foreign exchange contracts are normally used to increase the hedge
to 100% of the exposure. Cash \ufb02ows relating to cash \ufb02ow hedges are expected to occur within 12 months of inception and pro\ufb01ts
and losses on hedges are expected to enter into the determination of pro\ufb01t (within cost of goods sold) within a further 12-month
period. The principal currencies hedged by forward foreign exchange contracts are US Dollars, Euros, Sterling and Singapore Dollars.
At 31 December 2023, the Group had contracted to exchange within one year the equivalent of $2.4bn (2022: $2.2bn). Based on
the Group\u2019s net borrowings as at 31 December 2023, if the US Dollar were to weaken against all currencies by 10%, the Group\u2019s
net\u00a0borrowings would increase by\u00a0$37m (2022: $41m) principally due to the Euro-denominated term loans.
If the US Dollar were to weaken by 10% against all other currencies, then the fair value of the forward foreign exchange contracts as
at 31 December 2023 would have been $67m lower (2022: $50m lower). Similarly, if the Euro were to weaken by 10% against all other
currencies, then the fair value of the forward foreign exchange contracts as at 31 December 2023 would have been $38m higher
(2022:\u00a0$35m higher). Movements in the fair value of forward foreign exchange contracts would be recognised in other comprehensive
income or in the income statement.
A 10% strengthening of the US Dollar or Euro against all other currencies at 31 December 2023 would have had the equal but opposite
e\ufb00ect to the amounts shown above, on the basis that all other variables remain constant.
The Group\u2019s policy is to hedge all actual foreign exchange exposures and the Group\u2019s forward foreign exchange contracts are designated
as cash \ufb02ow hedges. The net impact of transaction-related foreign exchange on the income statement from a movement in exchange
rates on the value of forward foreign exchange contracts is not signi\ufb01cant. In addition, the movements in the fair value of other \ufb01nancial
instruments used for hedging such as currency swaps for which hedge accounting is not applied o\ufb00set movements in the values of
assets and liabilities and are recognised through the income statement. Hedge ine\ufb00ectiveness is caused by actual cash \ufb02ows in foreign
currencies varying from forecast cash \ufb02ows.
16.2
Interest rate risk management
The Group is exposed to interest rate risk on cash, borrowings and certain currency and interest rate swaps which are at \ufb02oating
rates. When required the Group uses interest rate derivatives to meet its objective of protecting borrowing costs within parameters
set by the\u00a0Board. These interest rate derivatives are accounted for as cash \ufb02ow hedges and, as such, changes in fair value resulting
from changes in market interest rates are recognised in other comprehensive income and accumulated in the hedging reserve, with
the fair\u00a0value of the interest rate derivatives recorded in the balance sheet. Additionally, the Group uses interest rate swaps to reduce
the overall level of \ufb01xed rate debt, within parameters set by the Board. When used in this way, interest rate derivatives are accounted
for\u00a0as\u00a0fair value hedges. The fair value movement of the derivative is o\ufb00set in the income statement against the fair value movement
in\u00a0the\u00a0underlying \ufb01xed rate debt.
In 2022, the Group entered into a new \u20ac500m \ufb01xed to \ufb02oating interest rate swap.
Based on the Group\u2019s gross borrowings and cash as at 31 December 2023, if interest rates were to increase by 100 basis points in all
currencies, then the annual net interest charge would increase by $5m (2022: $4m). A decrease in interest rates by 100 basis points
in\u00a0all\u00a0currencies would have an equal but opposite e\ufb00ect to the amounts shown above.
16.3
Credit risk management
The Group limits exposure to credit risk on counterparties used for \ufb01nancial instruments through a system of internal credit limits.
The \ufb01nancial exposure of a counterparty is determined as the total of cash and deposits, plus the risk on derivative instruments,
assessed as the fair value of the instrument plus a risk element based on the nominal value and the historic volatility of the market
value of the instrument. The Group does not anticipate non-performance of counterparties and believes it is not subject to material
concentration of credit risk as the Group operates within a policy of counterparty limits designed to reduce exposure to any
single counterparty.
The maximum credit risk exposure on derivatives at 31 December 2023 was $27m (2022: $47m), being the total debit fair values
on\u00a0forward foreign exchange contracts and currency swaps. The maximum credit risk exposure on cash at bank at 31 December
2023 was\u00a0$302m (2022: $350m). The\u00a0Group\u2019s exposure to credit risk on cash is mitigated as the amounts are held in a wide number
of\u00a0high\u00a0credit quality \ufb01nancial institutions. Credit risk on trade receivables is detailed in Note 13.
The amounts relating to items designated as hedging instruments were as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Carrying
Carrying
Changes in
Hedge
Amounts reclassi\ufb01ed
\u00a0
\u00a0
Nominal
amount
amount
fair value
ine\ufb00ectiveness
from hedging reserve
\u00a0
\u00a0
amount
assets
liabilities
in OCI
in pro\ufb01t or loss
to pro\ufb01t or loss
Line item in
\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
pro\ufb01t or loss
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,913
27
(28)
(3)
\u2013
(25)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
7
\u2013
\u2013
\u2013
\u2013
Fair value hedge
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,598
47
(43)
(13)
\u2013
(37)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
\u2013
(13)
\u2013
\u2013
\u2013
Fair value hedge
\n
1
Presented in Trade and other receivables and Trade and other payables on the Balance Sheet. The nominal amount is in $ million.
2
Presented in Non-current other receivables in 2023 and in Non-current other payables in 2022 on the Balance Sheet. The nominal amount is in \u20ac million.
16.4
Net investment hedge
Part of the Group\u2019s net investment in its Euro subsidiaries is hedged by \u20ac500m ($552m equivalent) of our debut EUR Corporate Bond
which mitigates the\u00a0foreign currency risk arising from the subsidiaries\u2019 net assets. The Bond is designated as a hedging instrument for
the\u00a0changes in\u00a0the\u00a0value of the net investment that is attributable to changes in the EUR/USD spot rate.
To assess hedge e\ufb00ectiveness, the Group determines the economic relationship between the hedging instrument and the hedged item
by comparing changes in the carrying amount of the debt that is attributable to a change in the spot rate with changes in the investment
in the foreign operation due to movements in the spot rate (the o\ufb00set method). The Group\u2019s policy is to hedge the net investment only
to\u00a0the extent of the debt principal. Hedge ine\ufb00ectiveness occurs if the value of the Euro-denominated Corporate Bond exceeds the
value\u00a0of\u00a0the Euro subsidiaries. 16.6
Fair value of \ufb01nancial assets and liabilities
Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.
There has been no change in the classi\ufb01cation of \ufb01nancial assets and liabilities, the method and assumptions used in determining fair
value and the categorisation of \ufb01nancial assets and liabilities within the fair value hierarchy from those disclosed in the Annual Report
for\u00a0the year ended 31 December 2022.
The Group enters into derivative \ufb01nancial instruments with \ufb01nancial institutions with investment grade credit ratings. The fair value
of forward foreign exchange contracts is calculated by reference to quoted market forward exchange rates for contracts with similar
maturity pro\ufb01les. The fair value of currency swaps is determined by reference to quoted market spot rates. As a result, foreign forward
exchange contracts and currency swaps are classi\ufb01ed as Level 2 within the fair value hierarchy. The changes in counterparty credit
risk had no material e\ufb00ect on the hedge e\ufb00ectiveness for derivatives designated in hedge relationships and other \ufb01nancial instruments
recognised at fair value. The fair value of investments is based upon third-party pricing models for share issues. As a result, investments
are considered Level 3 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during 2023 and 2022. For cash
and cash equivalents, short-term loans and receivables, overdra\ufb05s and other short-term liabilities which have a maturity of less than
three\u00a0months, the book values approximate the fair values\u00a0because of\u00a0their short-term nature.
Long-term borrowings are measured in the balance sheet at amortised cost. The corporate bonds issued in October 2020 and October
2022 are publicly listed and a market price is available. The Group\u2019s other long-term borrowings are not quoted publicly, their fair values
are estimated by\u00a0discounting future contractual cash \ufb02ows to net present\u00a0values at the current market interest rates available to the
Group for similar\u00a0\ufb01nancial instruments as at the year end. The fair\u00a0value of\u00a0the\u00a0private placement notes is determined using a discounted
cash \ufb02ow model based on prevailing market rates.
The following table shows the carrying amounts and fair values of \ufb01nancial assets and \ufb01nancial liabilities, including their levels in the
fair\u00a0value hierarchy. It does not include fair value information for \ufb01nancial assets and \ufb01nancial liabilities not measured at fair value.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Carrying
\u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
amount
\u00a0 \u00a0
Fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0
Fair value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0
Fair value
through
Other
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
hedging
Amortised
through
pro\ufb01t
\ufb01nancial
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
instruments
cost
OCI
or loss
liabilities
Total
Level\u00a02
Level\u00a03
Total
At\u00a031\u00a0December\u00a02023
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward foreign exchange contracts
25
\u2013
\u2013
\u2013
\u2013
25
25
\u2013
25
Investments
\u2013
\u2013
\u2013
8
\u2013
8
\u2013
8
8
Contingent consideration receivable
\u2013
\u2013
\u2013
18
\u2013
18
\u2013
18
18
Interest rate swaps
7
\u2013
\u2013
\u2013
\u2013
7
7
\u2013
7
Currency swaps
\u2013
\u2013
2
\u2013
\u2013
2
2
\u2013
2
\u00a0
32
\u2013
2
26
\u2013
60
\u00a0 \u00a0 \u00a0
Financial liabilities measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
(32)
\u2013
(32)
\u2013
(32)
(32)
Forward foreign exchange contracts
(25)
\u2013
\u2013
\u2013
\u2013
(25)
(25)
\u2013
(25)
Currency swaps
\u2013
\u2013
(3)
\u2013
\u2013
(3)
(3)
\u2013
(3)
\u00a0
(25)
\u2013
(3)
(32)
\u2013
(60)
\u00a0 \u00a0 \u00a0
Financial assets not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Trade and other receivables
1,163
\u2013
\u2013
\u2013
\u2013
1,163
\u00a0 \u00a0 \u00a0
Cash at bank
\u2013
302
\u2013
\u2013
\u2013
302
\u00a0 \u00a0 \u00a0
\u00a0
1,163
302
\u2013
\u2013
\u2013
1,465
\u00a0 \u00a0 \u00a0
Financial liabilities not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
\u2013
(4)
(4)
\u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
\u2013
\u2013
\u2013
\u2013
(2)
(2)
\u00a0 \u00a0 \u00a0
Bank loans
\u2013
\u2013
\u2013
\u2013
(303)
(303)
\u00a0 \u00a0 \u00a0
Corporate bond not in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(995)
(995)
\u00a0 \u00a0 \u00a0
Corporate bond in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(555)
(555)
\u00a0 \u00a0 \u00a0
Private placement debt not in a
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
hedge relationship
\u2013
\u2013
\u2013
\u2013
(1,030)
(1,030)
\u00a0 \u00a0 \u00a0
Trade and other payables
\u2013
\u2013
\u2013
\u2013
(1,026)
(1,026)
\u00a0 \u00a0 \u00a0
\u00a0
\u2013
\u2013
\u2013
\u2013
(3,915)
(3,915)
\u00a0 \u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2023, the book value and market value of the USD corporate bond were $995m and $826m respectively (2022: $994m
and $783m), the book value and market value of the EUR Corporate bond were $555m and $585m respectively (2022: $516m and $531m).
The book value and fair value of the private placement debt were $1,030m and $959m respectively (2022: $1,160m and $987m).
During the year ended 31 December 2023, acquisition consideration decreased by $56m due to $21m of payments for acquisitions
made in prior years, and $35m of remeasurement and discount unwind. The fair value of contingent consideration is\u00a0estimated
using a discounted cash \ufb02ow model. The valuation model considers the present value of expected payment, discounted using a risk-
adjusted discount rate. The expected payment is determined by considering the possible scenarios, which relate\u00a0to the achievement
of established milestones and targets, the amount to\u00a0be paid under each scenario and the probability of\u00a0each\u00a0scenario. As a\u00a0result,
contingent consideration is classi\ufb01ed as Level 3 within the fair value hierarchy.
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Carrying
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
amount
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0
through
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
hedging
\u00a0\u00a0
Amortised
\u00a0\u00a0
through
\u00a0\u00a0
pro\ufb01t
\u00a0\u00a0
\ufb01nancial
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
instruments
\u00a0\u00a0
cost
\u00a0\u00a0
OCI
\u00a0\u00a0
or loss
\u00a0\u00a0
liabilities
\u00a0\u00a0
Total
\u00a0\u00a0
Level\u00a02
\u00a0\u00a0
Level\u00a03
\u00a0\u00a0
Total
At\u00a031\u00a0December\u00a02022
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
46
\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
46
Investments
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
12
\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
18
\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
18
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0
1
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
30
\u00a0
\u2013
\u00a0\u00a0
77
\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
(78)
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(42)
\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(42)
Interest rate swaps
\u00a0\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(13)
\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(13)
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0
(1)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0\u00a0
(55)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(134)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial assets not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Trade and other receivables
\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,123
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Cash at bank
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,473
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial liabilities not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(14)
\u00a0\u00a0
(14)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Bank overdra\ufb05s
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(6)
\u00a0\u00a0
(6)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond not in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(994)
\u00a0\u00a0
(994)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(516)
\u00a0\u00a0
(516)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Private placement debt not in a
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
hedge relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,160)
\u00a0\u00a0
(1,160)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Trade and other payables
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,040)
\u00a0\u00a0
(1,040)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(3,730)
\u00a0\u00a0
(3,730)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
The fair value of contingent acquisition consideration is estimated using a discounted cash \ufb02ow model. The valuation model considers
the present value of risk adjusted expected payments, discounted using a risk-free discount rate. The expected payment is determined
by considering the possible scenarios, which relate to the achievement of established milestones and targets, the amount to be paid
under each scenario and the probability of each scenario. As a result, contingent acquisition consideration is classi\ufb01ed as Level 3 within
the fair value hierarchy.
The fair value of investments is based upon third-party pricing models for share issues. As a result, investments are considered Level 3
in\u00a0the fair value hierarchy.
The movements in 2023 and 2022 for \ufb01nancial instruments measured using Level 3 valuation methods are presented below:
\u00a0\u00a0\u00a0
2023
\u00a0\u00a0
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
Investments
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
12
\u00a0\u00a0
10
Additions
\u00a0\u00a0
\u2013
\u00a0\u00a0
2
Fair value remeasurement
\u00a0\u00a0
(4)
\u00a0\u00a0
\u2013
At 31 December
\u00a0\u00a0
8
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
18
\u00a0\u00a0
20
Receipts
\u00a0\u00a0
\u2013
\u00a0\u00a0
(2)
At 31 December
\u00a0\u00a0
18
\u00a0\u00a0
18
Acquisition consideration liability
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
(78)
\u00a0\u00a0
(84)
Arising on acquisitions
\u00a0\u00a0
\u2013
\u00a0\u00a0
(32)
Payments
\u00a0\u00a0
13
\u00a0\u00a0
20
Remeasurements
\u00a0\u00a0
33
\u00a0\u00a0
19
Discount unwind
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
At 31 December
\u00a0\u00a0
(32)
\u00a0\u00a0
(78)
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30671": { "value": "16.1
Foreign exchange risk management
The Group operates in many countries and as a consequence has transactional and translational foreign exchange exposure. It is the
Group\u2019s\u00a0policy for operating units not to hold material unhedged monetary assets or liabilities other than in their functional currencies.
Foreign exchange variations a\ufb00ect trading results in two ways. Firstly, on translation of overseas sales and pro\ufb01ts into US Dollars
and\u00a0secondly, transactional exposures arising where some, or all of the costs of sale are incurred in a di\ufb00erent currency from the sale.
The principal transactional exposures arise as the proportion of costs in US Dollars, Sterling and Swiss Francs exceed the proportion
of\u00a0sales in each of these currencies and correspondingly the proportion of sales in Euros exceeds the proportion of costs in Euros.
The impact of currency movements on the cost of purchases is partly mitigated by the use of forward foreign exchange contracts.
The Group uses forward foreign exchange contracts, designated as cash \ufb02ow hedges, to hedge forecast third-party trading cash \ufb02ows
up\u00a0to\u00a0one year. When a commitment is entered into, forward foreign exchange contracts are normally used to increase the hedge
to 100% of the exposure. Cash \ufb02ows relating to cash \ufb02ow hedges are expected to occur within 12 months of inception and pro\ufb01ts
and losses on hedges are expected to enter into the determination of pro\ufb01t (within cost of goods sold) within a further 12-month
period. The principal currencies hedged by forward foreign exchange contracts are US Dollars, Euros, Sterling and Singapore Dollars.
At 31 December 2023, the Group had contracted to exchange within one year the equivalent of $2.4bn (2022: $2.2bn). Based on
the Group\u2019s net borrowings as at 31 December 2023, if the US Dollar were to weaken against all currencies by 10%, the Group\u2019s
net\u00a0borrowings would increase by\u00a0$37m (2022: $41m) principally due to the Euro-denominated term loans.
If the US Dollar were to weaken by 10% against all other currencies, then the fair value of the forward foreign exchange contracts as
at 31 December 2023 would have been $67m lower (2022: $50m lower). Similarly, if the Euro were to weaken by 10% against all other
currencies, then the fair value of the forward foreign exchange contracts as at 31 December 2023 would have been $38m higher
(2022:\u00a0$35m higher). Movements in the fair value of forward foreign exchange contracts would be recognised in other comprehensive
income or in the income statement.
A 10% strengthening of the US Dollar or Euro against all other currencies at 31 December 2023 would have had the equal but opposite
e\ufb00ect to the amounts shown above, on the basis that all other variables remain constant.
The Group\u2019s policy is to hedge all actual foreign exchange exposures and the Group\u2019s forward foreign exchange contracts are designated
as cash \ufb02ow hedges. The net impact of transaction-related foreign exchange on the income statement from a movement in exchange
rates on the value of forward foreign exchange contracts is not signi\ufb01cant. In addition, the movements in the fair value of other \ufb01nancial
instruments used for hedging such as currency swaps for which hedge accounting is not applied o\ufb00set movements in the values of
assets and liabilities and are recognised through the income statement. Hedge ine\ufb00ectiveness is caused by actual cash \ufb02ows in foreign
currencies varying from forecast cash \ufb02ows.
16.2
Interest rate risk management
The Group is exposed to interest rate risk on cash, borrowings and certain currency and interest rate swaps which are at \ufb02oating
rates. When required the Group uses interest rate derivatives to meet its objective of protecting borrowing costs within parameters
set by the\u00a0Board. These interest rate derivatives are accounted for as cash \ufb02ow hedges and, as such, changes in fair value resulting
from changes in market interest rates are recognised in other comprehensive income and accumulated in the hedging reserve, with
the fair\u00a0value of the interest rate derivatives recorded in the balance sheet. Additionally, the Group uses interest rate swaps to reduce
the overall level of \ufb01xed rate debt, within parameters set by the Board. When used in this way, interest rate derivatives are accounted
for\u00a0as\u00a0fair value hedges. The fair value movement of the derivative is o\ufb00set in the income statement against the fair value movement
in\u00a0the\u00a0underlying \ufb01xed rate debt.
In 2022, the Group entered into a new \u20ac500m \ufb01xed to \ufb02oating interest rate swap.
Based on the Group\u2019s gross borrowings and cash as at 31 December 2023, if interest rates were to increase by 100 basis points in all
currencies, then the annual net interest charge would increase by $5m (2022: $4m). A decrease in interest rates by 100 basis points
in\u00a0all\u00a0currencies would have an equal but opposite e\ufb00ect to the amounts shown above.", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f30760": { "value": "16.3
Credit risk management
The Group limits exposure to credit risk on counterparties used for \ufb01nancial instruments through a system of internal credit limits.
The \ufb01nancial exposure of a counterparty is determined as the total of cash and deposits, plus the risk on derivative instruments,
assessed as the fair value of the instrument plus a risk element based on the nominal value and the historic volatility of the market
value of the instrument. The Group does not anticipate non-performance of counterparties and believes it is not subject to material
concentration of credit risk as the Group operates within a policy of counterparty limits designed to reduce exposure to any
single counterparty.
The maximum credit risk exposure on derivatives at 31 December 2023 was $27m (2022: $47m), being the total debit fair values
on\u00a0forward foreign exchange contracts and currency swaps. The maximum credit risk exposure on cash at bank at 31 December
2023 was\u00a0$302m (2022: $350m). The\u00a0Group\u2019s exposure to credit risk on cash is mitigated as the amounts are held in a wide number
of\u00a0high\u00a0credit quality \ufb01nancial institutions. Credit risk on trade receivables is detailed in Note 13.
The amounts relating to items designated as hedging instruments were as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Carrying
Carrying
Changes in
Hedge
Amounts reclassi\ufb01ed
\u00a0
\u00a0
Nominal
amount
amount
fair value
ine\ufb00ectiveness
from hedging reserve
\u00a0
\u00a0
amount
assets
liabilities
in OCI
in pro\ufb01t or loss
to pro\ufb01t or loss
Line item in
\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
pro\ufb01t or loss
At 31 December\u00a02023
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,913
27
(28)
(3)
\u2013
(25)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
7
\u2013
\u2013
\u2013
\u2013
Fair value hedge
At 31 December\u00a02022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Foreign currency risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward exchange contracts
1
2,598
47
(43)
(13)
\u2013
(37)
Cash \ufb02ow hedges
Interest rate risk
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Interest rate swaps
2
(500)
\u2013
(13)
\u2013
\u2013
\u2013
Fair value hedge
\n
1
Presented in Trade and other receivables and Trade and other payables on the Balance Sheet. The nominal amount is in $ million.
2
Presented in Non-current other receivables in 2023 and in Non-current other payables in 2022 on the Balance Sheet. The nominal amount is in \u20ac million.", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f31532": { "value": "16.6
Fair value of \ufb01nancial assets and liabilities
Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.
There has been no change in the classi\ufb01cation of \ufb01nancial assets and liabilities, the method and assumptions used in determining fair
value and the categorisation of \ufb01nancial assets and liabilities within the fair value hierarchy from those disclosed in the Annual Report
for\u00a0the year ended 31 December 2022.
The Group enters into derivative \ufb01nancial instruments with \ufb01nancial institutions with investment grade credit ratings. The fair value
of forward foreign exchange contracts is calculated by reference to quoted market forward exchange rates for contracts with similar
maturity pro\ufb01les. The fair value of currency swaps is determined by reference to quoted market spot rates. As a result, foreign forward
exchange contracts and currency swaps are classi\ufb01ed as Level 2 within the fair value hierarchy. The changes in counterparty credit
risk had no material e\ufb00ect on the hedge e\ufb00ectiveness for derivatives designated in hedge relationships and other \ufb01nancial instruments
recognised at fair value. The fair value of investments is based upon third-party pricing models for share issues. As a result, investments
are considered Level 3 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during 2023 and 2022. For cash
and cash equivalents, short-term loans and receivables, overdra\ufb05s and other short-term liabilities which have a maturity of less than
three\u00a0months, the book values approximate the fair values\u00a0because of\u00a0their short-term nature.
Long-term borrowings are measured in the balance sheet at amortised cost. The corporate bonds issued in October 2020 and October
2022 are publicly listed and a market price is available. The Group\u2019s other long-term borrowings are not quoted publicly, their fair values
are estimated by\u00a0discounting future contractual cash \ufb02ows to net present\u00a0values at the current market interest rates available to the
Group for similar\u00a0\ufb01nancial instruments as at the year end. The fair\u00a0value of\u00a0the\u00a0private placement notes is determined using a discounted
cash \ufb02ow model based on prevailing market rates.
The following table shows the carrying amounts and fair values of \ufb01nancial assets and \ufb01nancial liabilities, including their levels in the
fair\u00a0value hierarchy. It does not include fair value information for \ufb01nancial assets and \ufb01nancial liabilities not measured at fair value.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Carrying
\u00a0 \u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
amount
\u00a0 \u00a0
Fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0
Fair value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0
Fair value
through
Other
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
hedging
Amortised
through
pro\ufb01t
\ufb01nancial
\u00a0 \u00a0 \u00a0 \u00a0
\u00a0
instruments
cost
OCI
or loss
liabilities
Total
Level\u00a02
Level\u00a03
Total
At\u00a031\u00a0December\u00a02023
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Forward foreign exchange contracts
25
\u2013
\u2013
\u2013
\u2013
25
25
\u2013
25
Investments
\u2013
\u2013
\u2013
8
\u2013
8
\u2013
8
8
Contingent consideration receivable
\u2013
\u2013
\u2013
18
\u2013
18
\u2013
18
18
Interest rate swaps
7
\u2013
\u2013
\u2013
\u2013
7
7
\u2013
7
Currency swaps
\u2013
\u2013
2
\u2013
\u2013
2
2
\u2013
2
\u00a0
32
\u2013
2
26
\u2013
60
\u00a0 \u00a0 \u00a0
Financial liabilities measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
(32)
\u2013
(32)
\u2013
(32)
(32)
Forward foreign exchange contracts
(25)
\u2013
\u2013
\u2013
\u2013
(25)
(25)
\u2013
(25)
Currency swaps
\u2013
\u2013
(3)
\u2013
\u2013
(3)
(3)
\u2013
(3)
\u00a0
(25)
\u2013
(3)
(32)
\u2013
(60)
\u00a0 \u00a0 \u00a0
Financial assets not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Trade and other receivables
1,163
\u2013
\u2013
\u2013
\u2013
1,163
\u00a0 \u00a0 \u00a0
Cash at bank
\u2013
302
\u2013
\u2013
\u2013
302
\u00a0 \u00a0 \u00a0
\u00a0
1,163
302
\u2013
\u2013
\u2013
1,465
\u00a0 \u00a0 \u00a0
Financial liabilities not measured
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
at\u00a0fair\u00a0value
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Acquisition consideration
\u2013
\u2013
\u2013
\u2013
(4)
(4)
\u00a0 \u00a0 \u00a0
Bank overdra\ufb05s
\u2013
\u2013
\u2013
\u2013
(2)
(2)
\u00a0 \u00a0 \u00a0
Bank loans
\u2013
\u2013
\u2013
\u2013
(303)
(303)
\u00a0 \u00a0 \u00a0
Corporate bond not in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(995)
(995)
\u00a0 \u00a0 \u00a0
Corporate bond in a hedge
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
relationship
\u2013
\u2013
\u2013
\u2013
(555)
(555)
\u00a0 \u00a0 \u00a0
Private placement debt not in a
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
hedge relationship
\u2013
\u2013
\u2013
\u2013
(1,030)
(1,030)
\u00a0 \u00a0 \u00a0
Trade and other payables
\u2013
\u2013
\u2013
\u2013
(1,026)
(1,026)
\u00a0 \u00a0 \u00a0
\u00a0
\u2013
\u2013
\u2013
\u2013
(3,915)
(3,915)
\u00a0 \u00a0 \u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2023, the book value and market value of the USD corporate bond were $995m and $826m respectively (2022: $994m
and $783m), the book value and market value of the EUR Corporate bond were $555m and $585m respectively (2022: $516m and $531m).
The book value and fair value of the private placement debt were $1,030m and $959m respectively (2022: $1,160m and $987m).
During the year ended 31 December 2023, acquisition consideration decreased by $56m due to $21m of payments for acquisitions
made in prior years, and $35m of remeasurement and discount unwind. The fair value of contingent consideration is\u00a0estimated
using a discounted cash \ufb02ow model. The valuation model considers the present value of expected payment, discounted using a risk-
adjusted discount rate. The expected payment is determined by considering the possible scenarios, which relate\u00a0to the achievement
of established milestones and targets, the amount to\u00a0be paid under each scenario and the probability of\u00a0each\u00a0scenario. As a\u00a0result,
contingent consideration is classi\ufb01ed as Level 3 within the fair value hierarchy.
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Carrying
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
amount
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
Fair\u00a0value\u00a0\u2013
\u00a0\u00a0\u00a0\u00a0\u00a0
Fair value
\u00a0\u00a0
through
\u00a0\u00a0
Other
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
hedging
\u00a0\u00a0
Amortised
\u00a0\u00a0
through
\u00a0\u00a0
pro\ufb01t
\u00a0\u00a0
\ufb01nancial
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0\u00a0\u00a0\u00a0
instruments
\u00a0\u00a0
cost
\u00a0\u00a0
OCI
\u00a0\u00a0
or loss
\u00a0\u00a0
liabilities
\u00a0\u00a0
Total
\u00a0\u00a0
Level\u00a02
\u00a0\u00a0
Level\u00a03
\u00a0\u00a0
Total
At\u00a031\u00a0December\u00a02022
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0$\u00a0million\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Financial assets measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
46
\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
46
Investments
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
12
\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
\u2013
\u00a0\u00a0
12
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
18
\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
\u2013
\u00a0\u00a0
18
\u00a0\u00a0
18
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0
1
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0\u00a0
46
\u00a0\u00a0
\u2013
\u00a0\u00a0
1
\u00a0\u00a0\u00a0
30
\u00a0
\u2013
\u00a0\u00a0
77
\u00a0\u00a0\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
Financial liabilities measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(78)
\u00a0\u00a0
(78)
Forward foreign exchange contracts
\u00a0\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(42)
\u00a0\u00a0
(42)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(42)
Interest rate swaps
\u00a0\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(13)
\u00a0\u00a0
(13)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(13)
Currency swaps
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0
(1)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0\u00a0
(55)
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
\u00a0\u00a0\u00a0
(78)
\u00a0
\u2013
\u00a0\u00a0
(134)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial assets not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Trade and other receivables
\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,123
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Cash at bank
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
350
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
1,123
\u00a0\u00a0
350
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
\u2013
\u00a0\u00a0
1,473
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Financial liabilities not measured
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
at\u00a0fair\u00a0value
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Acquisition consideration
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(14)
\u00a0\u00a0
(14)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Bank overdra\ufb05s
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(6)
\u00a0\u00a0
(6)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond not in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(994)
\u00a0\u00a0
(994)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Corporate bond in a hedge
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(516)
\u00a0\u00a0
(516)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
Private placement debt not in a
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
hedge relationship
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,160)
\u00a0\u00a0
(1,160)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Trade and other payables
\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(1,040)
\u00a0\u00a0
(1,040)
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0
\u00a0
\u00a0
\u00a0\u00a0\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0
\u2013
\u00a0\u00a0\u00a0
\u2013
\u00a0
(3,730)
\u00a0\u00a0
(3,730)
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
\n
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
The fair value of contingent acquisition consideration is estimated using a discounted cash \ufb02ow model. The valuation model considers
the present value of risk adjusted expected payments, discounted using a risk-free discount rate. The expected payment is determined
by considering the possible scenarios, which relate to the achievement of established milestones and targets, the amount to be paid
under each scenario and the probability of each scenario. As a result, contingent acquisition consideration is classi\ufb01ed as Level 3 within
the fair value hierarchy.
The fair value of investments is based upon third-party pricing models for share issues. As a result, investments are considered Level 3
in\u00a0the fair value hierarchy.
The movements in 2023 and 2022 for \ufb01nancial instruments measured using Level 3 valuation methods are presented below:
\u00a0\u00a0\u00a0
2023
\u00a0\u00a0
2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
Investments
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
12
\u00a0\u00a0
10
Additions
\u00a0\u00a0
\u2013
\u00a0\u00a0
2
Fair value remeasurement
\u00a0\u00a0
(4)
\u00a0\u00a0
\u2013
At 31 December
\u00a0\u00a0
8
\u00a0\u00a0
12
Contingent consideration receivable
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
18
\u00a0\u00a0
20
Receipts
\u00a0\u00a0
\u2013
\u00a0\u00a0
(2)
At 31 December
\u00a0\u00a0
18
\u00a0\u00a0
18
Acquisition consideration liability
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
At 1 January
\u00a0\u00a0
(78)
\u00a0\u00a0
(84)
Arising on acquisitions
\u00a0\u00a0
\u2013
\u00a0\u00a0
(32)
Payments
\u00a0\u00a0
13
\u00a0\u00a0
20
Remeasurements
\u00a0\u00a0
33
\u00a0\u00a0
19
Discount unwind
\u00a0\u00a0
\u2013
\u00a0\u00a0
(1)
At 31 December
\u00a0\u00a0
(32)
\u00a0\u00a0
(78)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f31541": { "value": "Accounting policy
Measurement of fair values
A number of the Group\u2019s accounting policies and disclosures require the measurement of fair values, for both \ufb01nancial assets
and\u00a0liabilities and non-\ufb01nancial assets acquired in a business combination (see Note 21).
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values
are categorised into di\ufb00erent levels in the fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level\u00a01:\u00a0quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices
included\u00a0in Level\u00a01 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices);
and\u00a0Level 3: inputs\u00a0for the asset or liability that are not based on observable data (unobservable inputs).
The Group recognises transfers between the levels of the fair value hierarchy at the end of the reporting period during which
the\u00a0change has occurred.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f34090": { "value": "17
Provisions and contingencies
Accounting policy
In the normal course of business the Group is involved in various legal disputes. Provisions are made for loss contingencies when it is
deemed probable that an adverse outcome will occur and the amount of the losses can be reasonably estimated. Where the Group is
the plainti\ufb00 in pursuing claims against third parties, legal and associated expenses are charged to the income statement as incurred.
The recognition of provisions for legal disputes is subject to a signi\ufb01cant degree of estimation. In making its estimates, management
takes into account the advice of internal and external legal counsel. Provisions are reviewed regularly and amounts updated where
necessary to re\ufb02ect developments in the disputes. The ultimate liability may di\ufb00er from the amount provided depending on the
outcome of court proceedings or settlement negotiations or as new facts emerge. Insurance recoveries are recognised when the
in\ufb02ow of bene\ufb01ts is virtually certain and are presented within other receivables.
A provision for onerous contracts is recognised when the expected bene\ufb01ts to be derived by the Group from a contract are lower
than\u00a0the unavoidable cost of meeting its obligations under the contract.
A provision for restructuring and rationalisation is recognised when the Group has approved a detailed and formal restructuring plan
and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for.
17.1
Provisions
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Restructuring
\u00a0 \u00a0 \u00a0
\u00a0
and
\u00a0 \u00a0 \u00a0
\u00a0
rationalisation
\u00a0
\u00a0
\u00a0
Legal\u00a0and\u00a0other
\u00a0
\u00a0
provisions
Metal-on-metal
provisions
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January\u00a02022
18
289
50
357
Charge to income statement
169
19
19
207
Release to income statement
(2)
\u2013
(5)
(7)
Unwinding of discount
\u2013
7
\u2013
7
Utilised
(154)
(76)
(6)
(236)
Exchange adjustment
(1)
\u2013
\u2013
(1)
At 31 December\u00a02022
30
239
58
327
Charge to income statement
220
\u2013
9
229
Release to income statement
\u2013
(8)
(19)
(27)
Unwinding of discount
\u2013
5
\u2013
5
Utilised
(160)
(87)
(7)
(254)
Exchange adjustment
1
\u2013
\u2013
1
At 31 December\u00a02023
91
149
41
281
Provisions\u00a0\u2013 due within one\u00a0year
91
111
31
233
Provisions\u00a0\u2013 due a\ufb05er one\u00a0year
\u2013
38
10
48
At 31 December\u00a02023
91
149
41
281
Provisions\u00a0\u2013 due within one\u00a0year
30
165
48
243
Provisions\u00a0\u2013 due a\ufb05er one\u00a0year
\u2013
74
10
84
At 31 December\u00a02022
30
239
58
327
\n
The principal elements within restructuring and rationalisation provisions relate to the Operations and Commercial Excellence
programme announced in\u00a0February 2020 and the e\ufb03ciency and productivity elements of the 12-Point Plan.
The Group has estimated a provision of $149m (2022: $239m) relating to the present value at 31 December 2023 of the estimated costs
to\u00a0resolve all other known and anticipated metal-on-metal hip claims globally. The estimated value of the provision has been determined
using an actuarial model. Given the inherent uncertainty in assumptions including sensitivity to factors such as the number, outcome and
value of claims the actual costs may di\ufb00er signi\ufb01cantly from this estimate. A range of expected outcomes less than 55th and more than
90th percentile generated by the actuarial model would not give rise to a material adjustment. The potential for more adverse outcomes
exists and for example at the 97th percentile a charge similar to that incurred in 2019 ($121m) would be required in 2024 or therea\ufb05er.
The provision does not include any possible further insurance recoveries on these claims or legal fees associated with defending claims.
The legal and other provisions mainly relate to various other product liability and intellectual property litigation matters. The Group
carries considerable product liability insurance, and will continue to defend claims vigorously.
All provisions are expected to be substantially utilised within \ufb01ve years of 31 December 2023 and none are treated as
\ufb01nancial instruments.
17.2
Contingencies
The Company and its subsidiaries are party to various legal proceedings, some of which include claims for substantial damages.
The outcome of these proceedings cannot readily be foreseen, but except as described herein management believes none of them
is\u00a0likely to result in a material adverse e\ufb00ect on the \ufb01nancial position of the Group. The Group provides for outcomes that are deemed
to be probable and can be reliably estimated. There is no assurance that losses will not exceed provisions or will not have a signi\ufb01cant
impact on the Group\u2019s results of operations in the period in which they are realised.
17.3
Legal proceedings
Product liability claims
The Group faces claims from time to time for alleged defects in its products and has on occasion recalled or withdrawn products from
the market. Such claims are endemic to the medical device industry. The Group maintains product liability insurance subject to limits
and deductibles that management believes are reasonable. All policies contain exclusions and limitations, however, and there can be
no\u00a0assurance that insurance will be available or adequate to cover all claims.
This includes matters raising concerns about possible adverse e\ufb00ects of hip implant products with metal-on-metal (MoM) bearing
surfaces for which the Group has incurred and will continue to incur expenses to defend claims in this area.
As of December 2023, approximately 276 such claims were pending with the Group around the world. This includes approximately
48\u00a0cases associated with a Multi-district Litigation (MDL) pending in Baltimore, Maryland due to a 5 April 2017 court order consolidating
Smith+Nephew Birmingham Hip
\u25ca
Resurfacing (BHR
\u25ca
) cases pending or later \ufb01led in US federal court for pre-trial proceedings. Most claims
relate to the Group\u2019s BHR product, including its two modular metal-on-metal components: the Birmingham Hip Modular Head (BHMH)
and the optional metal liner component of the R3
\u25ca
Acetabular System (R3ML). The BHMH and R3ML are no longer on the market: the
R3ML was withdrawn in 2012 and the BHMH was phased out in 2014. In 2015, the Group ceased o\ufb00ering smaller sizes of the BHR and
restricted instructions for BHR use in female patients. These actions were taken to ensure that the BHR is used only in those patient
groups where it continues to demonstrate strong performance.
Through the end of 2023, entities of the Group have entered into several group, as well as individual, MoM related settlements without
admitting liability. The Group requested indemnity from its product liability insurers for most of these MoM hip implant settlements
and\u00a0insurers have indemni\ufb01ed the Group to the limits of their respective applicable policies.
Litigation outcomes are di\ufb03cult to predict and defence costs can be signi\ufb01cant. The Group takes care to monitor the clinical evidence
relating to its products, including its metal hip implant products, to help ensure that its product o\ufb00erings are designed to serve
patients\u2019\u00a0interests.
Intellectual property disputes
The Group engages, as both plainti\ufb00 and defendant, in litigation with various competitors and others over claims of patent infringement
and other intellectual property matters. These disputes are heard in courts in the US and other jurisdictions and also before agencies
that examine patents. Outcomes are rarely certain and costs are o\ufb05en signi\ufb01cant.
Arthrex asserted suture anchor patents against Smith+Nephew in 2014 and 2015 in the US District Court for the Eastern District of
Texas. In February 2017, the parties reached a settlement resulting in the dismissal of all patent litigation. Smith+Nephew agreed to pay
additional payments contingent on the outcome of patent validity proceedings pending at the US Patent & Trademark O\ufb03ce. In August
2019, the Court of Appeals for the Federal Circuit a\ufb03rmed US Patent & Trademark O\ufb03ce ruling invalidating one of the asserted Arthrex
patents. In October 2019, the Court of Appeals for the Federal Circuit vacated an earlier US Patent & Trademark O\ufb03ce ruling invalidating
the other asserted Arthrex patent. The United States Supreme Court granted certiorari. The Supreme Court ruling allowed Arthrex to
petition the Director of the US Patent & Trademark O\ufb03ce to review the decision invalidating the second asserted Arthrex patent. The
US Patent & Trademark O\ufb03ce declined Arthrex\u2019s rehearing request in October 2021. In May 2022, the Court of Appeals for the Federal
Circuit a\ufb03rmed the US Patent & Trademark O\ufb03ce\u2019s invalidity ruling and its denial of Arthrex\u2019s rehearing request. Arthrex petitioned the
United States Supreme Court to review the US Patent & Trademark O\ufb03ce\u2019s denial of Arthrex\u2019s rehearing request. On 22 March 2023,
the US Supreme Court denied Arthrex\u2019s cert petition and on 7 June 2023, the US Patent & Trademark O\ufb03ce issued an IPR certi\ufb01cate
o\ufb03cially cancelling all the claims of Arthrex\u2019s patent.
17.4
Tax matters
At any given time the Group has unagreed years outstanding in various countries and is involved in tax audits and disputes, some of
which may take several years to resolve. Provisions are based on best estimates and management\u2019s judgements concerning the likely
ultimate outcome of any audit or dispute. Management considers the speci\ufb01c circumstances of each tax position and takes external
advice, where appropriate, to assess the range of potential outcomes and estimate additional tax that may be due. The Group believes
that it has made adequate provision in respect of additional tax liabilities that may arise. See Note 5 for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f34091": { "value": "17
Provisions and contingencies
Accounting policy
In the normal course of business the Group is involved in various legal disputes. Provisions are made for loss contingencies when it is
deemed probable that an adverse outcome will occur and the amount of the losses can be reasonably estimated. Where the Group is
the plainti\ufb00 in pursuing claims against third parties, legal and associated expenses are charged to the income statement as incurred.
The recognition of provisions for legal disputes is subject to a signi\ufb01cant degree of estimation. In making its estimates, management
takes into account the advice of internal and external legal counsel. Provisions are reviewed regularly and amounts updated where
necessary to re\ufb02ect developments in the disputes. The ultimate liability may di\ufb00er from the amount provided depending on the
outcome of court proceedings or settlement negotiations or as new facts emerge. Insurance recoveries are recognised when the
in\ufb02ow of bene\ufb01ts is virtually certain and are presented within other receivables.
A provision for onerous contracts is recognised when the expected bene\ufb01ts to be derived by the Group from a contract are lower
than\u00a0the unavoidable cost of meeting its obligations under the contract.
A provision for restructuring and rationalisation is recognised when the Group has approved a detailed and formal restructuring plan
and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for.
17.1
Provisions
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Restructuring
\u00a0 \u00a0 \u00a0
\u00a0
and
\u00a0 \u00a0 \u00a0
\u00a0
rationalisation
\u00a0
\u00a0
\u00a0
Legal\u00a0and\u00a0other
\u00a0
\u00a0
provisions
Metal-on-metal
provisions
Total
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January\u00a02022
18
289
50
357
Charge to income statement
169
19
19
207
Release to income statement
(2)
\u2013
(5)
(7)
Unwinding of discount
\u2013
7
\u2013
7
Utilised
(154)
(76)
(6)
(236)
Exchange adjustment
(1)
\u2013
\u2013
(1)
At 31 December\u00a02022
30
239
58
327
Charge to income statement
220
\u2013
9
229
Release to income statement
\u2013
(8)
(19)
(27)
Unwinding of discount
\u2013
5
\u2013
5
Utilised
(160)
(87)
(7)
(254)
Exchange adjustment
1
\u2013
\u2013
1
At 31 December\u00a02023
91
149
41
281
Provisions\u00a0\u2013 due within one\u00a0year
91
111
31
233
Provisions\u00a0\u2013 due a\ufb05er one\u00a0year
\u2013
38
10
48
At 31 December\u00a02023
91
149
41
281
Provisions\u00a0\u2013 due within one\u00a0year
30
165
48
243
Provisions\u00a0\u2013 due a\ufb05er one\u00a0year
\u2013
74
10
84
At 31 December\u00a02022
30
239
58
327
\n
The principal elements within restructuring and rationalisation provisions relate to the Operations and Commercial Excellence
programme announced in\u00a0February 2020 and the e\ufb03ciency and productivity elements of the 12-Point Plan.
The Group has estimated a provision of $149m (2022: $239m) relating to the present value at 31 December 2023 of the estimated costs
to\u00a0resolve all other known and anticipated metal-on-metal hip claims globally. The estimated value of the provision has been determined
using an actuarial model. Given the inherent uncertainty in assumptions including sensitivity to factors such as the number, outcome and
value of claims the actual costs may di\ufb00er signi\ufb01cantly from this estimate. A range of expected outcomes less than 55th and more than
90th percentile generated by the actuarial model would not give rise to a material adjustment. The potential for more adverse outcomes
exists and for example at the 97th percentile a charge similar to that incurred in 2019 ($121m) would be required in 2024 or therea\ufb05er.
The provision does not include any possible further insurance recoveries on these claims or legal fees associated with defending claims.
The legal and other provisions mainly relate to various other product liability and intellectual property litigation matters. The Group
carries considerable product liability insurance, and will continue to defend claims vigorously.
All provisions are expected to be substantially utilised within \ufb01ve years of 31 December 2023 and none are treated as
\ufb01nancial instruments.
17.2
Contingencies
The Company and its subsidiaries are party to various legal proceedings, some of which include claims for substantial damages.
The outcome of these proceedings cannot readily be foreseen, but except as described herein management believes none of them
is\u00a0likely to result in a material adverse e\ufb00ect on the \ufb01nancial position of the Group. The Group provides for outcomes that are deemed
to be probable and can be reliably estimated. There is no assurance that losses will not exceed provisions or will not have a signi\ufb01cant
impact on the Group\u2019s results of operations in the period in which they are realised.
17.3
Legal proceedings
Product liability claims
The Group faces claims from time to time for alleged defects in its products and has on occasion recalled or withdrawn products from
the market. Such claims are endemic to the medical device industry. The Group maintains product liability insurance subject to limits
and deductibles that management believes are reasonable. All policies contain exclusions and limitations, however, and there can be
no\u00a0assurance that insurance will be available or adequate to cover all claims.
This includes matters raising concerns about possible adverse e\ufb00ects of hip implant products with metal-on-metal (MoM) bearing
surfaces for which the Group has incurred and will continue to incur expenses to defend claims in this area.
As of December 2023, approximately 276 such claims were pending with the Group around the world. This includes approximately
48\u00a0cases associated with a Multi-district Litigation (MDL) pending in Baltimore, Maryland due to a 5 April 2017 court order consolidating
Smith+Nephew Birmingham Hip
\u25ca
Resurfacing (BHR
\u25ca
) cases pending or later \ufb01led in US federal court for pre-trial proceedings. Most claims
relate to the Group\u2019s BHR product, including its two modular metal-on-metal components: the Birmingham Hip Modular Head (BHMH)
and the optional metal liner component of the R3
\u25ca
Acetabular System (R3ML). The BHMH and R3ML are no longer on the market: the
R3ML was withdrawn in 2012 and the BHMH was phased out in 2014. In 2015, the Group ceased o\ufb00ering smaller sizes of the BHR and
restricted instructions for BHR use in female patients. These actions were taken to ensure that the BHR is used only in those patient
groups where it continues to demonstrate strong performance.
Through the end of 2023, entities of the Group have entered into several group, as well as individual, MoM related settlements without
admitting liability. The Group requested indemnity from its product liability insurers for most of these MoM hip implant settlements
and\u00a0insurers have indemni\ufb01ed the Group to the limits of their respective applicable policies.
Litigation outcomes are di\ufb03cult to predict and defence costs can be signi\ufb01cant. The Group takes care to monitor the clinical evidence
relating to its products, including its metal hip implant products, to help ensure that its product o\ufb00erings are designed to serve
patients\u2019\u00a0interests.
Intellectual property disputes
The Group engages, as both plainti\ufb00 and defendant, in litigation with various competitors and others over claims of patent infringement
and other intellectual property matters. These disputes are heard in courts in the US and other jurisdictions and also before agencies
that examine patents. Outcomes are rarely certain and costs are o\ufb05en signi\ufb01cant.
Arthrex asserted suture anchor patents against Smith+Nephew in 2014 and 2015 in the US District Court for the Eastern District of
Texas. In February 2017, the parties reached a settlement resulting in the dismissal of all patent litigation. Smith+Nephew agreed to pay
additional payments contingent on the outcome of patent validity proceedings pending at the US Patent & Trademark O\ufb03ce. In August
2019, the Court of Appeals for the Federal Circuit a\ufb03rmed US Patent & Trademark O\ufb03ce ruling invalidating one of the asserted Arthrex
patents. In October 2019, the Court of Appeals for the Federal Circuit vacated an earlier US Patent & Trademark O\ufb03ce ruling invalidating
the other asserted Arthrex patent. The United States Supreme Court granted certiorari. The Supreme Court ruling allowed Arthrex to
petition the Director of the US Patent & Trademark O\ufb03ce to review the decision invalidating the second asserted Arthrex patent. The
US Patent & Trademark O\ufb03ce declined Arthrex\u2019s rehearing request in October 2021. In May 2022, the Court of Appeals for the Federal
Circuit a\ufb03rmed the US Patent & Trademark O\ufb03ce\u2019s invalidity ruling and its denial of Arthrex\u2019s rehearing request. Arthrex petitioned the
United States Supreme Court to review the US Patent & Trademark O\ufb03ce\u2019s denial of Arthrex\u2019s rehearing request. On 22 March 2023,
the US Supreme Court denied Arthrex\u2019s cert petition and on 7 June 2023, the US Patent & Trademark O\ufb03ce issued an IPR certi\ufb01cate
o\ufb03cially cancelling all the claims of Arthrex\u2019s patent.
17.4
Tax matters
At any given time the Group has unagreed years outstanding in various countries and is involved in tax audits and disputes, some of
which may take several years to resolve. Provisions are based on best estimates and management\u2019s judgements concerning the likely
ultimate outcome of any audit or dispute. Management considers the speci\ufb01c circumstances of each tax position and takes external
advice, where appropriate, to assess the range of potential outcomes and estimate additional tax that may be due. The Group believes
that it has made adequate provision in respect of additional tax liabilities that may arise. See Note 5 for further details.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f34097": { "value": "Accounting policy
In the normal course of business the Group is involved in various legal disputes. Provisions are made for loss contingencies when it is
deemed probable that an adverse outcome will occur and the amount of the losses can be reasonably estimated. Where the Group is
the plainti\ufb00 in pursuing claims against third parties, legal and associated expenses are charged to the income statement as incurred.
The recognition of provisions for legal disputes is subject to a signi\ufb01cant degree of estimation. In making its estimates, management
takes into account the advice of internal and external legal counsel. Provisions are reviewed regularly and amounts updated where
necessary to re\ufb02ect developments in the disputes. The ultimate liability may di\ufb00er from the amount provided depending on the
outcome of court proceedings or settlement negotiations or as new facts emerge. Insurance recoveries are recognised when the
in\ufb02ow of bene\ufb01ts is virtually certain and are presented within other receivables.
A provision for onerous contracts is recognised when the expected bene\ufb01ts to be derived by the Group from a contract are lower
than\u00a0the unavoidable cost of meeting its obligations under the contract.
A provision for restructuring and rationalisation is recognised when the Group has approved a detailed and formal restructuring plan
and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f34466": { "value": "17.2
Contingencies
The Company and its subsidiaries are party to various legal proceedings, some of which include claims for substantial damages.
The outcome of these proceedings cannot readily be foreseen, but except as described herein management believes none of them
is\u00a0likely to result in a material adverse e\ufb00ect on the \ufb01nancial position of the Group. The Group provides for outcomes that are deemed
to be probable and can be reliably estimated. There is no assurance that losses will not exceed provisions or will not have a signi\ufb01cant
impact on the Group\u2019s results of operations in the period in which they are realised.", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f34467": { "value": "17.2
Contingencies
The Company and its subsidiaries are party to various legal proceedings, some of which include claims for substantial damages.
The outcome of these proceedings cannot readily be foreseen, but except as described herein management believes none of them
is\u00a0likely to result in a material adverse e\ufb00ect on the \ufb01nancial position of the Group. The Group provides for outcomes that are deemed
to be probable and can be reliably estimated. There is no assurance that losses will not exceed provisions or will not have a signi\ufb01cant
impact on the Group\u2019s results of operations in the period in which they are realised.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f34552": { "value": "Accounting policy
The Group sponsors de\ufb01ned bene\ufb01t plans in a number of countries. A de\ufb01ned bene\ufb01t pension plan de\ufb01nes an amount of pension
bene\ufb01t that an employee will receive on retirement or a minimum guaranteed return on contributions, which is dependent on various
factors such as age, years of service and \ufb01nal salary. The Group\u2019s obligation is calculated separately for each plan by discounting
the\u00a0estimated future bene\ufb01t that employees have\u00a0earned in return for their service in the current and prior periods. The fair value
of\u00a0any plan assets is deducted to arrive at the net liability.
The calculation of the de\ufb01ned bene\ufb01t obligation is performed annually by external actuaries using the projected unit credit method.
Remeasurements arising from de\ufb01ned bene\ufb01t plans comprise actuarial gains and losses and the return on the plan assets in excess
of the discount rate net of the costs of\u00a0managing the plan assets. The Group recognises these immediately in other comprehensive
income (OCI) and all other expenses, such as service cost, net interest cost, administration costs and taxes, are recognised in the
income statement.
A number of key assumptions are made when calculating the fair value of the Group\u2019s de\ufb01ned bene\ufb01t pension plans. These
assumptions impact the balance sheet asset and liabilities, operating pro\ufb01t, \ufb01nance income/costs and other comprehensive income.
The most critical assumptions are the discount rate, the rate of in\ufb02ation and mortality assumptions to be applied to future pension
plan liabilities. The discount rate is based on the yield at the reporting date on bonds that have a credit rating of AA, denominated
in the currency in which the bene\ufb01ts are expected to be paid and have a maturity pro\ufb01le approximately the same as the\u00a0Group\u2019s
obligations. In determining these assumptions management takes into account the advice of professional external actuaries
and\u00a0benchmarks its assumptions against external data.
The Group determines the net interest expense/income on the net de\ufb01ned bene\ufb01t liability/asset for the period by applying the
discount rate used to\u00a0measure the de\ufb01ned bene\ufb01t obligation at the beginning of the annual period to the net de\ufb01ned bene\ufb01t
liability/asset.
The Group also operates a number of de\ufb01ned contribution plans. A de\ufb01ned contribution plan is a pension plan under which the
Group\u00a0and employees pay \ufb01xed contributions to a third-party \ufb01nancial provider. The Group has no further payment obligations
once\u00a0the contributions have\u00a0been\u00a0paid. Contributions are recognised as an employee bene\ufb01t expense when they are due. Accounting policy
The Group operates a number of equity-settled executive and employee share plans. For all grants of share options and awards,
the\u00a0fair value at the grant date is calculated using appropriate option pricing models. The grant date fair value is recognised over
the\u00a0vesting period as an expense, with a corresponding increase in retained earnings. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36436": { "value": "19
Equity
Accounting policy
Incremental costs directly attributable to the issue of ordinary shares, net of any tax e\ufb00ects, are recognised as a deduction
from equity.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable
costs, net of any tax e\ufb00ects, is recognised as a deduction from equity. Repurchased shares are classi\ufb01ed as treasury shares and
are\u00a0presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is
recognised as an increase in\u00a0equity and the resulting surplus or de\ufb01cit on the transaction is presented within share premium.
19.1
Share capital
\n \n
Ordinary shares (20\u00a2)
Deferred shares (\u00a31.00)
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Thousand\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
Thousand\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Authorised
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2021
1,223,591
245
50
\u2013
245
At 31 December 2022
1,223,591
245
50
\u2013
245
At 31 December 2023
1,223,591
245
50
\u2013
245
Allotted, issued and fully paid
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02021
884,885
177
50
\u2013
177
Share options
306
\u2013
\u2013
\u2013
\u2013
Shares cancelled
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2021
885,191
177
50
\u2013
177
Share options
229
\u2013
\u2013
\u2013
\u2013
Shares cancelled
(7,770)
(2)
\u2013
\u2013
(2)
At 31 December 2022
877,650
175
50
\u2013
175
Share options
23
\u2013
\u2013
\u2013
\u2013
At 31 December 2023
877,673
175
50
\u2013
175
The deferred shares were issued in 2006 in order to comply with English Company law. They are not listed on any stock exchange
and\u00a0have extremely limited rights and e\ufb00ectively have no value. These rights are summarised as follows:
\u2013
The holder shall not be entitled to participate in the pro\ufb01ts of the Company;
\u2013
The holder shall not have any right to participate in any distribution of the Company\u2019s assets on a winding-up or other distribution
except that a\ufb05er the return of the nominal amount paid up on each share in the capital of the Company of any class other than
the deferred shares and the distribution of a further $1,000 in respect of each such share there shall be distributed to a holder
of a deferred share (for\u00a0each deferred share held) an amount equal to the nominal value of the deferred share;
\u2013
The holder shall not be entitled to receive notice, attend, speak or vote at any general meeting of the Company; and
\u2013
The Company may create, allot and issue further shares or reduce or repay the whole or any part of its share capital or other
capital\u00a0reserves without obtaining the consent of the holders of the deferred shares.
The Group\u2019s objectives when managing capital are to ensure the Group has adequate funds to continue as a going concern and su\ufb03cient
\ufb02exibility within the capital structure to fund the ongoing growth of the business and to take advantage of business development
opportunities including acquisitions.
The Group determines the amount of capital taking into account changes in business risks and future cash requirements. The Group
reviews its capital structure on an ongoing basis and uses share buy-backs, dividends and the issue of new shares to adjust the
retained capital.
The Group considers the capital that it manages to be as follows:
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Share capital
175
175
177
Share premium
615
615
614
Capital redemption reserve
20
20
18
Treasury shares
(94)
(118)
(120)
Retained earnings and other reserves
4,501
4,567
4,879
\u00a0
5,217
5,259
5,568
\n
19.2
Treasury shares
Treasury shares represent the holding of the Company\u2019s own shares in respect of the Smith & Nephew Employees\u2019 Share Trust and
shares bought back as part of the share buy-back programme. In 2022, the Group purchased a total of 10.1m shares for a cost of $158m
and no shares were purchased in 2023.
The Smith & Nephew 2004 Employees\u2019 Share Trust (the Trust) was established to hold shares relating to the long-term incentive plans
referred to in the Directors\u2019 Remuneration Report. The Trust is administered by an independent professional trust company resident
in\u00a0Jersey and is funded by a loan from the Company. The cost of the Trust is charged to the income statement as it accrues. A dividend
waiver is in place in respect of those shares held under the long-term incentive plans. The Trust only accepts dividends in respect of
nil-cost options and deferred bonus plan shares. The waiver represents less than 1% of the total dividends paid.
The movements in Treasury shares and the Employees\u2019 Share Trust are as follows:
\u00a0
\u00a0
\u00a0
\u00a0 \u00a0
Employees\u2019
\u00a0
\u00a0
Treasury
Share\u00a0Trust
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January\u00a02022
93
27
120
Shares purchased
150
8
158
Shares transferred from treasury
(41)
41
\u2013
Shares transferred to Group bene\ufb01ciaries
(6)
(25)
(31)
Shares cancelled
(129)
\u2013
(129)
At 31 December 2022
67
51
118
Shares transferred from treasury
(13)
13
\u2013
Shares transferred to Group bene\ufb01ciaries
(1)
(23)
(24)
At 31 December\u00a02023
53
41
94
\n
\u00a0
\u00a0
\u00a0
\u00a0 \u00a0
Employees\u2019
\u00a0
\u00a0
Treasury
Share\u00a0Trust
Total
\u00a0
Number
Number
Number
\u00a0
of\u00a0shares
of\u00a0shares
of\u00a0shares
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
\u00a0
million
At 1 January\u00a02022
5.4
1.6
7.0
Shares purchased
9.7
0.4
10.1
Shares transferred from treasury
(2.6)
2.6
\u2013
Shares transferred to Group bene\ufb01ciaries
(0.4)
(1.4)
(1.8)
Shares cancelled
(7.8)
\u2013
(7.8)
At 31 December 2022
4.3
3.2
7.5
Shares transferred from treasury
(0.8)
0.8
\u2013
Shares transferred to Group bene\ufb01ciaries
(0.1)
(1.6)
(1.7)
At 31 December\u00a02023
3.4
2.4
5.8
\n
19.3
Dividends
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
The following dividends were declared and paid in the\u00a0year:
\u00a0 \u00a0 \u00a0
Ordinary \ufb01nal of 23.1\u00a2 for 2022 (2021: 23.1\u00a2, 2020: 23.1\u00a2) paid 17 May 2023
201
202
203
Ordinary interim of 14.4\u00a2 for 2023 (2022: 14.4\u00a2, 2021: 14.4\u00a2) paid 1 November 2023
126
125
126
\u00a0
327
327
329
\n
A \ufb01nal dividend for 2023 of 23.1 US cents per ordinary share was proposed by the Board on 22 February 2024 and will be paid, subject
to shareholder approval, on 22 May 2024 to shareholders on the Register of Members on 31 March 2024. The estimated amount of this
dividend is $201m. The Group pursues a progressive dividend policy, with the aim of increasing the US Dollar value of ordinary dividends
over time broadly based on the Group\u2019s underlying growth in earnings, while taking into account capital requirements and cash \ufb02ows.
Future dividends will be dependent upon future earnings, the future \ufb01nancial condition of the Group and the Board\u2019s dividend policy.
The Board reviews the appropriate level of total annual dividend each year at the time of the full-year results. Smith & Nephew plc,
the\u00a0Parent Company of the Group, is a non-trading investment holding company which derives its distributable reserves from dividends
paid by subsidiary companies. The distributable reserves of the Parent Company approximate to the balance on the pro\ufb01t and loss
account reserve, less treasury shares and exchange reserves, which at 31 December 2023 amounted to $3,333m.", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36441": { "value": "Accounting policy
Incremental costs directly attributable to the issue of ordinary shares, net of any tax e\ufb00ects, are recognised as a deduction
from equity.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable
costs, net of any tax e\ufb00ects, is recognised as a deduction from equity. Repurchased shares are classi\ufb01ed as treasury shares and
are\u00a0presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is
recognised as an increase in\u00a0equity and the resulting surplus or de\ufb01cit on the transaction is presented within share premium. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36447": { "value": "When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable
costs, net of any tax e\ufb00ects, is recognised as a deduction from equity. Repurchased shares are classi\ufb01ed as treasury shares and
are\u00a0presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is
recognised as an increase in\u00a0equity and the resulting surplus or de\ufb01cit on the transaction is presented within share premium. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36456": { "value": "19.1
Share capital
\n \n
Ordinary shares (20\u00a2)
Deferred shares (\u00a31.00)
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Thousand\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
Thousand\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Authorised
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2021
1,223,591
245
50
\u2013
245
At 31 December 2022
1,223,591
245
50
\u2013
245
At 31 December 2023
1,223,591
245
50
\u2013
245
Allotted, issued and fully paid
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02021
884,885
177
50
\u2013
177
Share options
306
\u2013
\u2013
\u2013
\u2013
Shares cancelled
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2021
885,191
177
50
\u2013
177
Share options
229
\u2013
\u2013
\u2013
\u2013
Shares cancelled
(7,770)
(2)
\u2013
\u2013
(2)
At 31 December 2022
877,650
175
50
\u2013
175
Share options
23
\u2013
\u2013
\u2013
\u2013
At 31 December 2023
877,673
175
50
\u2013
175
The deferred shares were issued in 2006 in order to comply with English Company law. They are not listed on any stock exchange
and\u00a0have extremely limited rights and e\ufb00ectively have no value. These rights are summarised as follows:
\u2013
The holder shall not be entitled to participate in the pro\ufb01ts of the Company;
\u2013
The holder shall not have any right to participate in any distribution of the Company\u2019s assets on a winding-up or other distribution
except that a\ufb05er the return of the nominal amount paid up on each share in the capital of the Company of any class other than
the deferred shares and the distribution of a further $1,000 in respect of each such share there shall be distributed to a holder
of a deferred share (for\u00a0each deferred share held) an amount equal to the nominal value of the deferred share;
\u2013
The holder shall not be entitled to receive notice, attend, speak or vote at any general meeting of the Company; and
\u2013
The Company may create, allot and issue further shares or reduce or repay the whole or any part of its share capital or other
capital\u00a0reserves without obtaining the consent of the holders of the deferred shares.
The Group\u2019s objectives when managing capital are to ensure the Group has adequate funds to continue as a going concern and su\ufb03cient
\ufb02exibility within the capital structure to fund the ongoing growth of the business and to take advantage of business development
opportunities including acquisitions.
The Group determines the amount of capital taking into account changes in business risks and future cash requirements. The Group
reviews its capital structure on an ongoing basis and uses share buy-backs, dividends and the issue of new shares to adjust the
retained capital.
The Group considers the capital that it manages to be as follows:
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Share capital
175
175
177
Share premium
615
615
614
Capital redemption reserve
20
20
18
Treasury shares
(94)
(118)
(120)
Retained earnings and other reserves
4,501
4,567
4,879
\u00a0
5,217
5,259
5,568
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36457": { "value": "19.1
Share capital
\n \n
Ordinary shares (20\u00a2)
Deferred shares (\u00a31.00)
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Thousand\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
Thousand\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
Authorised
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 31 December 2021
1,223,591
245
50
\u2013
245
At 31 December 2022
1,223,591
245
50
\u2013
245
At 31 December 2023
1,223,591
245
50
\u2013
245
Allotted, issued and fully paid
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At 1 January\u00a02021
884,885
177
50
\u2013
177
Share options
306
\u2013
\u2013
\u2013
\u2013
Shares cancelled
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December 2021
885,191
177
50
\u2013
177
Share options
229
\u2013
\u2013
\u2013
\u2013
Shares cancelled
(7,770)
(2)
\u2013
\u2013
(2)
At 31 December 2022
877,650
175
50
\u2013
175
Share options
23
\u2013
\u2013
\u2013
\u2013
At 31 December 2023
877,673
175
50
\u2013
175
The deferred shares were issued in 2006 in order to comply with English Company law. They are not listed on any stock exchange
and\u00a0have extremely limited rights and e\ufb00ectively have no value. These rights are summarised as follows:
\u2013
The holder shall not be entitled to participate in the pro\ufb01ts of the Company;
\u2013
The holder shall not have any right to participate in any distribution of the Company\u2019s assets on a winding-up or other distribution
except that a\ufb05er the return of the nominal amount paid up on each share in the capital of the Company of any class other than
the deferred shares and the distribution of a further $1,000 in respect of each such share there shall be distributed to a holder
of a deferred share (for\u00a0each deferred share held) an amount equal to the nominal value of the deferred share;
\u2013
The holder shall not be entitled to receive notice, attend, speak or vote at any general meeting of the Company; and
\u2013
The Company may create, allot and issue further shares or reduce or repay the whole or any part of its share capital or other
capital\u00a0reserves without obtaining the consent of the holders of the deferred shares.
The Group\u2019s objectives when managing capital are to ensure the Group has adequate funds to continue as a going concern and su\ufb03cient
\ufb02exibility within the capital structure to fund the ongoing growth of the business and to take advantage of business development
opportunities including acquisitions.
The Group determines the amount of capital taking into account changes in business risks and future cash requirements. The Group
reviews its capital structure on an ongoing basis and uses share buy-backs, dividends and the issue of new shares to adjust the
retained capital.
The Group considers the capital that it manages to be as follows:
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Share capital
175
175
177
Share premium
615
615
614
Capital redemption reserve
20
20
18
Treasury shares
(94)
(118)
(120)
Retained earnings and other reserves
4,501
4,567
4,879
\u00a0
5,217
5,259
5,568
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f36989": { "value": "19.2
Treasury shares
Treasury shares represent the holding of the Company\u2019s own shares in respect of the Smith & Nephew Employees\u2019 Share Trust and
shares bought back as part of the share buy-back programme. In 2022, the Group purchased a total of 10.1m shares for a cost of $158m
and no shares were purchased in 2023.
The Smith & Nephew 2004 Employees\u2019 Share Trust (the Trust) was established to hold shares relating to the long-term incentive plans
referred to in the Directors\u2019 Remuneration Report. The Trust is administered by an independent professional trust company resident
in\u00a0Jersey and is funded by a loan from the Company. The cost of the Trust is charged to the income statement as it accrues. A dividend
waiver is in place in respect of those shares held under the long-term incentive plans. The Trust only accepts dividends in respect of
nil-cost options and deferred bonus plan shares. The waiver represents less than 1% of the total dividends paid.
The movements in Treasury shares and the Employees\u2019 Share Trust are as follows:
\u00a0
\u00a0
\u00a0
\u00a0 \u00a0
Employees\u2019
\u00a0
\u00a0
Treasury
Share\u00a0Trust
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
At 1 January\u00a02022
93
27
120
Shares purchased
150
8
158
Shares transferred from treasury
(41)
41
\u2013
Shares transferred to Group bene\ufb01ciaries
(6)
(25)
(31)
Shares cancelled
(129)
\u2013
(129)
At 31 December 2022
67
51
118
Shares transferred from treasury
(13)
13
\u2013
Shares transferred to Group bene\ufb01ciaries
(1)
(23)
(24)
At 31 December\u00a02023
53
41
94
\n
\u00a0
\u00a0
\u00a0
\u00a0 \u00a0
Employees\u2019
\u00a0
\u00a0
Treasury
Share\u00a0Trust
Total
\u00a0
Number
Number
Number
\u00a0
of\u00a0shares
of\u00a0shares
of\u00a0shares
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
\u00a0
million\u00a0
\u00a0
\u00a0
\u00a0
million
At 1 January\u00a02022
5.4
1.6
7.0
Shares purchased
9.7
0.4
10.1
Shares transferred from treasury
(2.6)
2.6
\u2013
Shares transferred to Group bene\ufb01ciaries
(0.4)
(1.4)
(1.8)
Shares cancelled
(7.8)
\u2013
(7.8)
At 31 December 2022
4.3
3.2
7.5
Shares transferred from treasury
(0.8)
0.8
\u2013
Shares transferred to Group bene\ufb01ciaries
(0.1)
(1.6)
(1.7)
At 31 December\u00a02023
3.4
2.4
5.8
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f37286": { "value": "19.3
Dividends
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
The following dividends were declared and paid in the\u00a0year:
\u00a0 \u00a0 \u00a0
Ordinary \ufb01nal of 23.1\u00a2 for 2022 (2021: 23.1\u00a2, 2020: 23.1\u00a2) paid 17 May 2023
201
202
203
Ordinary interim of 14.4\u00a2 for 2023 (2022: 14.4\u00a2, 2021: 14.4\u00a2) paid 1 November 2023
126
125
126
\u00a0
327
327
329
\n
A \ufb01nal dividend for 2023 of 23.1 US cents per ordinary share was proposed by the Board on 22 February 2024 and will be paid, subject
to shareholder approval, on 22 May 2024 to shareholders on the Register of Members on 31 March 2024. The estimated amount of this
dividend is $201m. The Group pursues a progressive dividend policy, with the aim of increasing the US Dollar value of ordinary dividends
over time broadly based on the Group\u2019s underlying growth in earnings, while taking into account capital requirements and cash \ufb02ows.
Future dividends will be dependent upon future earnings, the future \ufb01nancial condition of the Group and the Board\u2019s dividend policy.
The Board reviews the appropriate level of total annual dividend each year at the time of the full-year results. Smith & Nephew plc,
the\u00a0Parent Company of the Group, is a non-trading investment holding company which derives its distributable reserves from dividends
paid by subsidiary companies. The distributable reserves of the Parent Company approximate to the balance on the pro\ufb01t and loss
account reserve, less treasury shares and exchange reserves, which at 31 December 2023 amounted to $3,333m.", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f37353": { "value": "0.231", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:USD/xbrli:shares" } }, "f37356": { "value": "201000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:USD" } }, "f37360": { "value": "Smith & Nephew plc", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f37381": { "value": "20
Cash \ufb02ow statement
Accounting policy
In the Group cash \ufb02ow statement, cash and cash equivalents includes cash at bank, other short-term liquid investments with original
maturities of three months or less and bank overdra\ufb05s. In the Group balance sheet, bank overdra\ufb05s are shown within bank overdra\ufb05s,
borrowings, loans and lease liabilities under current liabilities.
Analysis of net debt including lease liabilities
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Borrowings
\u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Net
Net
\u00a0
\u00a0 \u00a0 \u00a0
Due within
Due a\ufb05er
currency
interest
\u00a0
\u00a0
Cash
Overdra\ufb05s
one\u00a0year
one\u00a0year
swaps
swaps
Total\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
\u00a0
\u00a0
\u00a0
\u00a0
$ million
At 1 January\u00a02021
\u00a0
1,762
(11)\u00a0
(326)\u00a0
(3,353)\u00a0
\u2013
2
(1,926)
Net cash \ufb02ow/debt movement
\u00a0
(466)
7
(162)
429
4
\u2013
(188)
Exchange adjustment
\u00a0
(6)
(1)
\u2013
72
(4)
(2)\u00a0
59
Corporate bond issuance expense
\u2013
\u2013
\u2013
(1)
\u2013
\u2013
(1)
IFRS 16 lease liabilities movement
\u00a0
\u2013
\u2013
2
5
\u2013
\u2013
7
At 31 December\u00a02021
\u00a0
1,290
(5)\u00a0
(486)\u00a0
(2,848)\u00a0
\u2013
\u2013
(2,049)
Net cash \ufb02ow/debt movement
\u00a0
(931)
1
302
94
(3)
\u2013
(537)
Exchange adjustment
(9)
(2)
23
45
3
(13)
47
Corporate bond issuance expense
\u2013
\u2013
\u2013
3
\u2013
\u2013
3
IFRS 16 lease liabilities movement
\u00a0
\u2013
\u2013
7
(6)
\u2013
\u2013
1
At 31 December\u00a02022
\u00a0
350
(6)\u00a0
(154)\u00a0
(2,712)\u00a0
\u2013
(13)\u00a0
(2,535)
Net cash \ufb02ow/debt movement
\u00a0
(48)
8
(604)
429
(4)
\u2013
(219)
Exchange adjustment
\u00a0
\u2013
(4)
\u2013
(39)
3
20
(20)
Corporate bond issuance expense
\u00a0
\u2013
\u2013
\u2013
1
\u2013
\u2013
1
IFRS 16 lease liabilities movement
\u2013
\u2013
(6)
3
\u2013
\u2013
(3)
Net debt including lease
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
liabilities at 31 December 2023
\u00a0
302
(2)\u00a0
(764)\u00a0
(2,318)\u00a0
(1)\u00a0
7
(2,776)
\n
Reconciliation of net cash \ufb02ow to movement in net debt including lease liabilities
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Net cash \ufb02ow from cash net of overdra\ufb05s
(40)
(930)
(459)
Settlement of currency swaps
(4)
(3)
4
Net cash \ufb02ow from borrowings
(175)
396
267
Change in net debt from net cash \ufb02ow
(219)
(537)
(188)
IFRS 16 lease liabilities
(3)
1
7
Exchange adjustment
(20)
47
59
Corporate bond issuance expense
1
3
(1)
Change in net debt in the\u00a0year
(241)
(486)
(123)
Opening net debt
(2,535)
(2,049)
(1,926)
Closing net debt
(2,776)
(2,535)
(2,049)
\n
Cash and cash equivalents
For the purposes of the Group cash \ufb02ow statement, cash and cash equivalents at 31 December 2023 comprise cash at bank net
of\u00a0bank overdra\ufb05s.
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Cash at bank
302
350
1,290
Bank overdra\ufb05s
(2)
(6)
(5)
Cash and cash equivalents
300
344
1,285
The Group operates in over 100 countries around the world, some of which impose restrictions over cash movement. These restrictions
have only a minimal impact on the management of the Group\u2019s cash.
Cash out\ufb02ows/(in\ufb02ows) arising from \ufb01nancing activities
\n \n
\u00a0
Repayment
Borrowing
Proceeds from
Repayment
Cash out\ufb02ow/
\u00a0 \u00a0
Proceeds from own
\u00a0
\u00a0
\u00a0
\u00a0
of bank
\u00a0
\u00a0
of bank
\u00a0
\u00a0
Corporate\u00a0
\u00a0
of lease
\u00a0
\u00a0
(in\ufb02ow)\u00a0
 \u00a0
\u00a0
\u00a0
Purchase of
\u00a0
\u00a0
shares/issue of
\u00a0
\u00a0
loans
1
loans
1
Bond issue
liabilities
from other
Dividends
own shares
ordinary shares
Total
2023
$ million
$ million
$ million
$ million
$ million
$ million
$ million
$ million
$ million
Debt
151
(326)
\u2013
52
(4)
\u2013
\u2013
\u2013
(127)
Equity
\u00a0
\u2013
\u2013
\u2013
\u2013
\u2013
327
\u2013
\u2013
327
Total
\u00a0
151
(326)\u00a0
\u2013
52
(4)\u00a0
327
\u2013
\u2013
200
2022
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Debt
881
\u2013
(485)
54
(3)
\u2013
\u2013
\u2013
447
Equity
\u2013
\u2013
\u2013
\u2013
\u2013
327
158
(6)
\u00a0
479
Total
881
\u2013
(485)
54
(3)
327
158
(6)
\u00a0
926
2021
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Debt
267
\u2013
\u2013
59
4
\u2013
\u2013
\u2013
330
Equity
\u00a0
\u2013
\u2013
\u2013
\u2013
\u2013
329
\u2013
(14)
315
Total
\u00a0
267
\u2013
\u2013
59
4
329
\u2013
(14)
645
\n
1
This includes drawdown and repayment of the syndicated revolving credit facility.", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f37386": { "value": "Accounting policy
In the Group cash \ufb02ow statement, cash and cash equivalents includes cash at bank, other short-term liquid investments with original
maturities of three months or less and bank overdra\ufb05s. In the Group balance sheet, bank overdra\ufb05s are shown within bank overdra\ufb05s,
borrowings, loans and lease liabilities under current liabilities. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f37907": { "value": "Cash and cash equivalents
For the purposes of the Group cash \ufb02ow statement, cash and cash equivalents at 31 December 2023 comprise cash at bank net
of\u00a0bank overdra\ufb05s.
\u00a0
\u00a0
\u00a0
2023
2022
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Cash at bank
302
350
1,290
Bank overdra\ufb05s
(2)
(6)
(5)
Cash and cash equivalents
300
344
1,285
The Group operates in over 100 countries around the world, some of which impose restrictions over cash movement. These restrictions
have only a minimal impact on the management of the Group\u2019s cash.", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38003": { "value": "The Group operates in over 100 countries around the world, some of which impose restrictions over cash movement. These restrictions have only a minimal impact on the management of the Group\u2019s cash.", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38323": { "value": "21
Acquisitions
Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is measured at fair value, as are the identi\ufb01able net assets acquired. Any goodwill
that\u00a0arises is tested annually for\u00a0impairment. Any gain on a bargain purchase is recognised in pro\ufb01t or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classi\ufb01ed
as\u00a0equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value
of\u00a0the\u00a0contingent consideration are recognised in pro\ufb01t or loss.
Year ended 31 December 2023
No acquisitions were completed in the year ended 31 December 2023.
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued
(see\u00a0Note 2.2 for further details).
Year ended 31 December 2022
On 18 January 2022, the Group completed the acquisition of 100% of the share capital of Engage Uni, LLC (doing business as Engage
Surgical), owner of the only cementless unicompartmental (partial) knee system commercially available in the US. The maximum
consideration, all payable in cash, is $135m and the provisional fair value consideration is $131m and includes $32m of contingent
consideration. The goodwill represents the control premium, the acquired workforce and the synergies expected from integrating
Engage Surgical into the Group\u2019s existing business. The majority of the consideration is expected to be deductible for tax purposes.
The fair value of assets acquired and liabilities assumed is set out below:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Engage
\u00a0\u00a0\u00a0\u00a0
Surgical
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Intangible assets \u2013 Product-related
\u00a0\u00a0\u00a0
44
Property, plant and equipment
\u00a0\u00a0\u00a0
2
Inventory
\u00a0\u00a0\u00a0
2
Trade and other payables
\u00a0\u00a0\u00a0
(1)
Net assets
\u00a0\u00a0\u00a0
47
Goodwill
\u00a0\u00a0\u00a0
84
Consideration (net of $nil cash acquired)
\u00a0\u00a0\u00a0
131
\n
The product-related intangible assets were valued using a relief-from-royalty methodology with the key inputs being revenue,
pro\ufb01t and\u00a0discount rate. The cash out\ufb02ow from acquisitions of $113m (2021: $285m) comprises payments of consideration of
$89m\u00a0(2021:\u00a0$236m) relating to acquisitions in the current year and payments of deferred and contingent consideration of $24m
(2021:\u00a0$49m) relating to acquisitions completed in prior years.
The carrying value of goodwill increased from $2,989m at 31 December 2021 to $3,031m at 31 December 2022. The acquisition in
the\u00a0year ended 31 December 2022 increased goodwill by $84m, this was partially o\ufb00set by foreign exchange movements of $42m.
For the year ended 31 December 2022, the contribution from Engage Surgical to revenue and to pro\ufb01t was immaterial. If the business
combination had occurred at the beginning of the year the contribution to revenue and pro\ufb01t would not have been materially di\ufb00erent.
Year ended 31 December 2021
On 4 January 2021, the Group completed the acquisition of the Extremity Orthopaedics business of Integra LifeSciences Holdings
Corporation (\u2018Extremity Orthopaedics\u2019). The acquisition signi\ufb01cantly strengthens the Group\u2019s extremities business by adding a
combination of a focused sales channel, complementary shoulder replacement and upper and lower extremities portfolio, and
a new product pipeline. The transaction comprised the acquisition of the entire issued share capital of two wholly owned US
subsidiaries of Integra LifeSciences Holdings Corporation group and certain assets of the Extremity Orthopaedics business held both
in and outside the US. The maximum consideration is $240m and the fair value of consideration is $236m and includes no deferred
or\u00a0contingent consideration.
The goodwill represents the control premium, the acquired workforce and the synergies expected from integrating Extremity
Orthopaedics into the Group\u2019s existing business, and is expected to be partly deductible for tax purposes.
The fair value of assets acquired and liabilities assumed is set out below:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Extremity
\u00a0
Orthopaedics
\u00a0
$ million
Intangible assets \u2013 Product-related
101
Intangible assets \u2013 Customer-related
11
Property, plant and equipment
22
Inventory
41
Other payables
(23)
Net deferred tax asset
(12)
Net assets
140
Goodwill
96
Consideration (net of $nil cash acquired)
236
\n
The product-related intangible assets were valued using an excess earnings methodology with the key inputs being revenue, pro\ufb01t
and\u00a0discount rate. The cash out\ufb02ow from acquisitions of $285m (2020: $170m) comprises payments of consideration of $236m
(2020:\u00a0$117m) relating to the acquisition which completed in the current year and payments of deferred and contingent consideration
of\u00a0$49m (2020: $53m) relating to acquisitions completed in prior years.
The carrying value of goodwill increased from $2,928m at 31 December 2020 to $2,989m at 31 December 2021. The acquisition in
the\u00a0year ended 31 December 2021 increased goodwill by $96m, this was partially o\ufb00set by foreign exchange movements of $35m.
For the year ended 31 December 2021, the contribution from Extremity Orthopaedics to revenue was $82m and to pro\ufb01t was
immaterial. If the business combination had occurred at the beginning of the year the contribution to revenue and pro\ufb01t would not
have\u00a0been materially di\ufb00erent.", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38325": { "value": "21
Acquisitions
Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is measured at fair value, as are the identi\ufb01able net assets acquired. Any goodwill
that\u00a0arises is tested annually for\u00a0impairment. Any gain on a bargain purchase is recognised in pro\ufb01t or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classi\ufb01ed
as\u00a0equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value
of\u00a0the\u00a0contingent consideration are recognised in pro\ufb01t or loss.
Year ended 31 December 2023
No acquisitions were completed in the year ended 31 December 2023.
During 2023, management evaluated the commercial viability of Engage products and concluded that they should be discontinued
(see\u00a0Note 2.2 for further details).
Year ended 31 December 2022
On 18 January 2022, the Group completed the acquisition of 100% of the share capital of Engage Uni, LLC (doing business as Engage
Surgical), owner of the only cementless unicompartmental (partial) knee system commercially available in the US. The maximum
consideration, all payable in cash, is $135m and the provisional fair value consideration is $131m and includes $32m of contingent
consideration. The goodwill represents the control premium, the acquired workforce and the synergies expected from integrating
Engage Surgical into the Group\u2019s existing business. The majority of the consideration is expected to be deductible for tax purposes.
The fair value of assets acquired and liabilities assumed is set out below:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0\u00a0\u00a0\u00a0
Engage
\u00a0\u00a0\u00a0\u00a0
Surgical
\u00a0\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Intangible assets \u2013 Product-related
\u00a0\u00a0\u00a0
44
Property, plant and equipment
\u00a0\u00a0\u00a0
2
Inventory
\u00a0\u00a0\u00a0
2
Trade and other payables
\u00a0\u00a0\u00a0
(1)
Net assets
\u00a0\u00a0\u00a0
47
Goodwill
\u00a0\u00a0\u00a0
84
Consideration (net of $nil cash acquired)
\u00a0\u00a0\u00a0
131
\n
The product-related intangible assets were valued using a relief-from-royalty methodology with the key inputs being revenue,
pro\ufb01t and\u00a0discount rate. The cash out\ufb02ow from acquisitions of $113m (2021: $285m) comprises payments of consideration of
$89m\u00a0(2021:\u00a0$236m) relating to acquisitions in the current year and payments of deferred and contingent consideration of $24m
(2021:\u00a0$49m) relating to acquisitions completed in prior years.
The carrying value of goodwill increased from $2,989m at 31 December 2021 to $3,031m at 31 December 2022. The acquisition in
the\u00a0year ended 31 December 2022 increased goodwill by $84m, this was partially o\ufb00set by foreign exchange movements of $42m.
For the year ended 31 December 2022, the contribution from Engage Surgical to revenue and to pro\ufb01t was immaterial. If the business
combination had occurred at the beginning of the year the contribution to revenue and pro\ufb01t would not have been materially di\ufb00erent.
Year ended 31 December 2021
On 4 January 2021, the Group completed the acquisition of the Extremity Orthopaedics business of Integra LifeSciences Holdings
Corporation (\u2018Extremity Orthopaedics\u2019). The acquisition signi\ufb01cantly strengthens the Group\u2019s extremities business by adding a
combination of a focused sales channel, complementary shoulder replacement and upper and lower extremities portfolio, and
a new product pipeline. The transaction comprised the acquisition of the entire issued share capital of two wholly owned US
subsidiaries of Integra LifeSciences Holdings Corporation group and certain assets of the Extremity Orthopaedics business held both
in and outside the US. The maximum consideration is $240m and the fair value of consideration is $236m and includes no deferred
or\u00a0contingent consideration.
The goodwill represents the control premium, the acquired workforce and the synergies expected from integrating Extremity
Orthopaedics into the Group\u2019s existing business, and is expected to be partly deductible for tax purposes.
The fair value of assets acquired and liabilities assumed is set out below:
\u00a0
\u00a0
\u00a0
\u00a0
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Extremity
\u00a0
Orthopaedics
\u00a0
$ million
Intangible assets \u2013 Product-related
101
Intangible assets \u2013 Customer-related
11
Property, plant and equipment
22
Inventory
41
Other payables
(23)
Net deferred tax asset
(12)
Net assets
140
Goodwill
96
Consideration (net of $nil cash acquired)
236
\n
The product-related intangible assets were valued using an excess earnings methodology with the key inputs being revenue, pro\ufb01t
and\u00a0discount rate. The cash out\ufb02ow from acquisitions of $285m (2020: $170m) comprises payments of consideration of $236m
(2020:\u00a0$117m) relating to the acquisition which completed in the current year and payments of deferred and contingent consideration
of\u00a0$49m (2020: $53m) relating to acquisitions completed in prior years.
The carrying value of goodwill increased from $2,928m at 31 December 2020 to $2,989m at 31 December 2021. The acquisition in
the\u00a0year ended 31 December 2021 increased goodwill by $96m, this was partially o\ufb00set by foreign exchange movements of $35m.
For the year ended 31 December 2021, the contribution from Extremity Orthopaedics to revenue was $82m and to pro\ufb01t was
immaterial. If the business combination had occurred at the beginning of the year the contribution to revenue and pro\ufb01t would not
have\u00a0been materially di\ufb00erent.", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38332": { "value": "Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
The consideration transferred in the acquisition is measured at fair value, as are the identi\ufb01able net assets acquired. Any goodwill
that\u00a0arises is tested annually for\u00a0impairment. Any gain on a bargain purchase is recognised in pro\ufb01t or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classi\ufb01ed
as\u00a0equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value
of\u00a0the\u00a0contingent consideration are recognised in pro\ufb01t or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38592": { "value": "22.1
Share-based payments
Accounting policy
The Group operates a number of equity-settled executive and employee share plans. For all grants of share options and awards,
the\u00a0fair value at the grant date is calculated using appropriate option pricing models. The grant date fair value is recognised over
the\u00a0vesting period as an expense, with a corresponding increase in retained earnings.
The Group operates the following equity-settled executive and employee share plans: Smith & Nephew Global Share Plan 2010,
Smith & Nephew Global Share Plan 2020, Smith & Nephew Share Save Plan (2012) and Smith & Nephew International Share
Save Plan\u00a0(2012). At 31 December 2023, 5,138,000 options (2022: 5,202,000, 2021: 4,472,000) were outstanding with a range
of\u00a0exercise\u00a0prices\u00a0from 843\u00a0to 1,541 pence.
At 31 December 2023, the maximum number of shares that could be awarded under the Group\u2019s long-term incentive plans was
8,452,000 (2022: 7,371,000, 2021: 5,997,000). These include conditional share awards granted to senior employees and equity
and\u00a0performance share awards granted to senior executives under the Global Share Plan 2010 and Global Share Plan 2020.
The expense charged to the income statement for share-based payments for the year is $39m (2022: $40m, 2021: $41m).", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38599": { "value": "Accounting policy
The Group operates a number of equity-settled executive and employee share plans. For all grants of share options and awards,
the\u00a0fair value at the grant date is calculated using appropriate option pricing models. The grant date fair value is recognised over
the\u00a0vesting period as an expense, with a corresponding increase in retained earnings. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38620": { "value": "22.2
Related party transactions
Trading transactions
In the course of normal operations, the Group traded with its associates detailed in Note 11. The aggregated transactions,
which\u00a0have not been disclosed elsewhere in the \ufb01nancial statements, are $nil (2022: $nil, 2021: $nil).
Key management personnel
The remuneration of Executive O\ufb03cers (including Non-Executive Directors) during the year is summarised below:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Short-term employee bene\ufb01ts
21
17
16
Share-based payments expense
9
10
7
Pension and post-employment bene\ufb01t entitlements
1
2
1
\u00a0
31
29
24
\n
Directors\u2019 remuneration disclosures are included on pages 121\u2013154.
Retirement bene\ufb01t schemes
Details of the Group\u2019s retirement bene\ufb01t schemes are set out in Note 18.", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38627": { "value": "Key management personnel
The remuneration of Executive O\ufb03cers (including Non-Executive Directors) during the year is summarised below:
\u00a0
\u00a0
\u00a0
2023\u00a0
\u00a0
2022\u00a0
\u00a0
2021\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
\u00a0
\u00a0
\u00a0
\u00a0
$\u00a0million
Short-term employee bene\ufb01ts
21
17
16
Share-based payments expense
9
10
7
Pension and post-employment bene\ufb01t entitlements
1
2
1
\u00a0
31
29
24
\nDirectors\u2019 remuneration disclosures are included on pages 121\u2013154.", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f38705": { "value": "23
Post balance sheet events
On 9 January 2024, the Group completed the acquisition of 100% of the share capital of CartiHeal, the developer of CARTIHEAL
\u25ca
AGILI-C,
\u25ca
a novel sports medicine technology for cartilage regeneration in the knee. The acquisition of this disruptive technology
supports our strategy to invest behind our successful Sports Medicine & ENT business unit. Smith+Nephew paid $180m in cash on
completion, with up to a further $150m contingent on future \ufb01nancial performance.
This acquisition will be treated as a business combination under
IFRS 3-Business Combinations
. The provisional value of acquired net
tangible assets is not material and is not expected to have material fair value adjustments. The remaining consideration will be allocated
between identi\ufb01able intangible assets (product-related) and goodwill, with the majority expected to be goodwill representing the
control premium, the acquired workforce and the synergies expected from integrating CartiHeal into the Group\u2019s existing business.
In October 2022, US Pension Plan members were noti\ufb01ed that Smith & Nephew Inc. (SNI) would begin the termination process for the US
Plan. In December 2023, Fidelity & Guaranty Life was selected to take over responsibility for the remaining US Pension Plan obligation
and administration upon termination. A premium amount of $245m was paid in cash by the US Plan on 4 January 2024 to settle the
annuity purchase agreement with Fidelity & Guaranty Life. Certain active employees and terminated vested participants elected to
receive a lump sum in exchange for their plan bene\ufb01t of $80m. This resulted in $4m of settlement costs which were recognised in 2023,
representing the di\ufb00erence between de\ufb01ned bene\ufb01t obligation (DBO) and the lump sums paid to members in December 2023. A $2m
credit will be recorded in 2024 linked to the annuity purchase contract concluded with Fidelity & Guaranty Life on 4 January 2024.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f44559": { "value": "UK", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f44562": { "value": "Building 5, Croxley Park,
Hatters Lane, Watford,
\n
Hertfordshire, WD18 8YE,
\nUnited Kingdom.", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f45165": { "value": "Smith & Nephew plc", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800ZTMDN8S67S1H61", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } } } }