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Net debt

12 Months Ended

Dec. 31, 2024

C2. Net debt

Net debt is used to assess the Group’s financial capacity. Net debt is not a measure defined by IFRS. Management defines net debt as the total of bank and other borrowings, lease liabilities, other investments, fair value of debt-related derivatives, and cash and cash equivalents (as presented in the Consolidated Balance Sheet).

Closing net debt comprises:


		2024	2023
	Notes	£m	£m
Current
Cash and cash equivalents in the Consolidated Balance Sheet	C3	925	1,562
Other investments¹	C4	2	1
Fair value of debt-related derivatives		(3)	(18)
Bank and other short-term borrowings²		(1,166)	(1,134)
Lease liabilities	B4	(130)	(127)
Non-current
Fair value of debt-related derivatives		(23)	41
Bank and other long-term borrowings³		(2,498)	(3,153)
Lease liabilities	B4	(315)	(318)
Total net debt		(3,208)	(3,146)

1.	Net debt excludes other investments which are non-cash, such as the investment in unlisted shares.

2.	Bank and other short-term borrowings consists of £nil bond debt (2023: £347), £553m overdraft (2023: £730m), £575m loans (2023: £17m), and £38m bond accruals (2023: £40m).

3.	Bank and other long-term borrowings consists of £2,494m bond debt (2023: £2,596m) and £4m loans (2023: £557m).

The currency split and cash flows of bank, other borrowings, and debt-related derivatives are as follows:


	2024	2023
	£m	£m
Pound sterling	921	1,075
Euro	873	934
US dollar	1,887	2,212
Other currencies	9	43
Carrying value	3,690	4,264
Effect of discounting	387	525
Undiscounted value	4,077	4,789
Analysis of undiscounted cash flows of bank and other borrowings:
Less than one year	1,251	1,185
Between one and five years	1,848	2,601
More than five years	978	1,003
Future minimum payments	4,077	4,789

Reconciliation of net change in cash and cash equivalents to net debt:

Non-cash

(fair value

(foreign

changes,

exchange,

Opening

Cash

accruals and

additions

Closing

2024

flows

acquisitions)

and other)

2024

Notes

£m

Bank and other short-term borrowings

(1,134)

602

(99)

(535)

(1,166)

Bank and other long-term borrowings

(3,153)

—

655

(2,498)

Lease liabilities

(445)

169

(146)

(23)

(445)

Other investments

—

Fair value of debt-related derivatives

(7)

(110)

(26)

Gross debt

(4,708)

840

(252)

(13)

(4,133)

Cash and cash equivalents in the Consolidated Balance Sheet

1,562

(637)

—

925

Net debt

(3,146)

203

(252)

(13)

(3,208)


				Non-cash	Non-cash
				(fair value	(foreign
				changes,	exchange,
		Opening	Cash	accruals and	additions	Closing
		2023	flows	acquisitions)	and other)	2023
	Notes	£m	£m	£m	£m	£m
Bank and other short-term borrowings		(1,345)	664	(106)	(347)	(1,134)
Bank and other long-term borrowings		(3,574)	—	—	421	(3,153)
Lease liabilities	B4	(460)	182	(162)	(5)	(445)
Other investments		1	—	—	—	1
Fair value of debt-related derivatives		(71)	39	(1)	56	23
Gross debt		(5,449)	885	(269)	125	(4,708)
Cash and cash equivalents in the Consolidated Balance Sheet		2,170	(601)	—	(7)	1,562
Net debt		(3,279)	284	(269)	118	(3,146)

The foreign exchange gain on debt and derivatives amounted to £1m (2023: £146m gain). The gain primarily resulted from a weakening of the euro by 6 cents and partially offset by strengthening of the US dollar by 2 cents. Included within the net decrease in cash and cash equivalents is £9m (2023: £3m) cash paid on debt-related foreign exchange forward contracts (which is included within financing activities in the Consolidated Cash Flow Statement).

The total cash outflow in borrowings of £602m (2023: £664m outflow) includes £176m decrease in overdraft (2023: £562m decrease), £334m debt repayment (included in financing activities) (2023: £nil) and £92m settlement of interest accrued (included within operating activities) (2023: £102m).

The derivatives cash outflow of £68m (2023: £39m outflow) includes £39m (2023: £3m outflow) of cash paid on debt-related foreign exchange swaps (included in financing activities) and £29m (2023: £36m) interest paid (included in operating activities).

The cash outflow of £169m from lease liabilities (2023: £182m) includes £145m (2023: £157m) capital paid (included within financing activities) and £24m (2023: £25m) interest paid (included in operating activities).

Fair value is equal to carrying value for all elements of net debt with the exception of bond debt, which has a carrying value of £2,494m (2023: £2,943m) and a fair value of £2,480m (2023: £2,959m).

The Group operates notional pooling arrangements whereby cash balances and overdrafts held within the same bank have a legal right of offset. Derivative financial instruments held with the same bank and having a legal right to offset are shown net. The following table shows the effect of offsetting in the balance sheet due to financial instruments subject to enforceable netting arrangements:

Amount

Gross

subject to

amounts set

Net amounts

master

Gross

off in the

presented in the

netting

amount

balance sheet

arrangement

Net amount

2024

Notes

£m

Financial assets

Cash and cash equivalents

925

—

925

(553)

372

Trade and other receivables

889

—

889

—

889

Other financial assets

—

Derivative financial instruments

—

(1)

Total

1,822

—

1,822

(554)

1,268

Financial liabilities

Trade and other payables

(847)

—

(847)

—

(847)

Borrowings

(3,664)

—

(3,664)

553

(3,111)

Lease liabilities

(445)

—

(445)

–

(445)

Derivative financial instruments

(32)

—

(32)

(31)

Total

(4,988)

—

(4,988)

554

(4,434)


			Gross		Amount
			amounts set		subject to
			off in the	Net amounts	master
		Gross	balance	presented in the	netting
		amount	sheet	balance sheet	arrangement	Net amount
		2023	2023	2023	2023	2023
	Notes	£m	£m	£m	£m	£m
Financial assets
Cash and cash equivalents	C3	1,562	—	1,562	(730)	832
Trade and other receivables	A3	857	—	857	—	857
Other financial assets	C4	1	—	1	—	1
Derivative financial instruments	C6	70	—	70	(26)	44
Total		2,490	—	2,490	(756)	1,734
Financial liabilities
Trade and other payables	A5	(866)	—	(866)	—	(866)
Borrowings	C2	(4,287)	—	(4,287)	730	(3,557)
Lease liabilities	B4	(445)	—	(445)	—	(445)
Derivative financial instruments	C6	(48)	—	(48)	26	(22)
Total		(5,646)	—	(5,646)	756	(4,890)