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v3.20.4

Financial risk management and derivative financial instruments (Tables) | 12 Months Ended
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Dec. 31, 2020
Text block [abstract] |
Summary of Derivative Financial Instruments | Derivatives are recorded in the Group statement of financial position at fair value (see note 25) as follows:
Description |  | Hedge relationship |  | 2020 $m |  |  | 2019 $m |
Put option |  | None |  |  | 4 |  |  |  | — |
Currency swaps |  | Cash flow hedge |  |  | (17 | ) |  |  | (20 | )
Short-dated foreign exchange swaps |  | Net investment hedge |  |  | — |  |  |  | 1 |
|  |  |  |  | (13 | ) |  |  | (19 | )
Analysed as: |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  | 5 |  |  |  | — |
Current assets |  |  |  |  | — |  |  |  | 1 |
Non-current liabilities |  |  |  |  | (18 | ) |  |  | (20 | )
|  |  |  |  | (13 | ) |  |  | (19 | )
Disclosure of Detailed Information About Hedging Instruments | Currency swaps have been transacted to swap the proceeds from the euro bonds to sterling as follows:
Date of designation |  | Pay leg |  |  | Interest rate |  |  | Receive leg |  |  | Interest rate |  |  | Maturity |  |  | Risk |  |  | Hedge type |  |  | Hedged item |
November 2018 |  | £ | 436m |  |  |  | 3.5 | % |  | € | 500m |  |  |  | 2.125 | % |  |  | May 2027 |  |  |  | Foreign exchange |  |  |  | Cash flow |  |  | € | 500m 2.125% bonds 2027 |
October 2020 |  | £ | 454m |  |  |  | 2.7 | % |  | € | 500m |  |  |  | 1.625 | % |  |  | October 2024 |  |  |  | Foreign exchange |  |  |  | Cash flow |  |  | € | 500m 1.625% bonds 2024 |
Summary of Interest and Foreign Exchange Risk Sensitivities |
|  |  |  | 2020 $m |  |  | 2019 $m |  |  | 2018 $m |
Increase/(decrease) in profit before tax |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sterling: US dollar exchange rate |  | 5¢ fall |  |  | 5.9 |  |  |  | 4.0 |  |  |  | 4.1 |
Euro: US dollar exchange rate |  | 5¢ fall |  |  | 0.3 |  |  |  | (2.6 | ) |  |  | (2.4 | )
US dollar interest rates |  | 1% increase |  |  | 2.2 |  |  |  | (1.6 | ) |  |  | (0.9 | )
Sterling interest rates |  | 1% increase |  |  | 12.9 |  |  |  | 0.6 |  |  |  | 5.5 |
Decrease/(increase) in net liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sterling: US dollar exchange rate |  | 5¢ fall |  |  | 30.2 |  |  |  | 39.9 |  |  |  | 25.9 |
Euro: US dollar exchange rate |  | 5¢ fall |  |  | 50.6 |  |  |  | 24.1 |  |  |  | 23.8 |
Sterling: euro exchange rate |  | 5¢ fall |  |  | 68.2 |  |  |  | 33.0 |  |  |  | 31.9 |
Summary of amended covenant test levels for syndicated and bilateral facilities |
|  | 2019 and prior |  |  | 30 June 2020 to 31 December 2021 |  |  | 30 June 2022 |  |  | 31 December 2022 |  |  | 30 June 2023 |
Amended covenant test levels for Syndicated and Bilateral Facilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leverage |  |  | <3.5x |  |  |  | waived |  |  |  | <7.5x |  |  |  | <6.5x |  |  |  | <3.5x |
Interest cover |  |  | >3.5x |  |  |  | waived |  |  |  | >1.5x |  |  |  | >2.0x |  |  |  | >3.5x |
Liquidity |  |  | n/a |  |  | $ | 400m |  |  | $ | 400m |  |  | $ | 400m |  |  |  | n/a |
Summary of covenant tests which are calculated on a frozen GAAP Basis | The following table details performance against covenant tests. The measures used in these tests are calculated on a frozen GAAP basis and do not align to the values reported by the Group as Non-GAAP measures:
|  | 2020 $m |  |  | 2019 $m |
Covenant EBITDA |  |  | 272 |  |  |  | 897 |
Covenant net debt |  |  | 2,375 |  |  |  | 2,241 |
Covenant interest payable |  |  | 111 |  |  |  | 99 |
Leverage |  |  | 8.73 |  |  |  | 2.50 |
Interest cover |  |  | 2.45 |  |  |  | 9.06 |
Liquidity |  |  | 2,925 |  |  |  | n/a |
Summary of Undiscounted Contractual Cash Flows of Financial Liabilities | The following are the undiscounted contractual cash flows of financial liabilities, including interest payments. Liabilities relating to the Group’s deferred compensation plan are excluded; their settlement is funded entirely by the realisation of the related deferred compensation plan investments and no net cash flow arises. The payment profile of contingent purchase consideration has been based on management’s forecasts and could in reality be different from expectations.
|  | Less than 1 year $m |  |  | Between 1 and 2 years $m |  |  | Between 2 and 5 years $m |  |  | More than 5 years $m |  |  | Total $m |
31 December 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-derivative financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank overdrafts |  |  | 51 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 51 |
£173m 3.875% bonds 2022 |  |  | 9 |  |  |  | 245 |  |  |  | — |  |  |  | — |  |  |  | 254 |
€500m 1.625% bonds 2024 |  |  | 10 |  |  |  | 10 |  |  |  | 634 |  |  |  | — |  |  |  | 654 |
£300m 3.75% bonds 2025 |  |  | 15 |  |  |  | 15 |  |  |  | 456 |  |  |  | — |  |  |  | 486 |
£350m 2.125% bonds 2026 |  |  | 10 |  |  |  | 10 |  |  |  | 31 |  |  |  | 488 |  |  |  | 539 |
€500m 2.125% bonds 2027 |  |  | 13 |  |  |  | 13 |  |  |  | 39 |  |  |  | 640 |  |  |  | 705 |
£400m 3.375% bonds 2028 |  |  | 19 |  |  |  | 18 |  |  |  | 55 |  |  |  | 601 |  |  |  | 693 |
Commercial paper |  |  | 819 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 819 |
Lease liabilities |  |  | 57 |  |  |  | 55 |  |  |  | 136 |  |  |  | 3,257 |  |  |  | 3,505 |
Trade and other payables (excluding deferred and contingent purchase consideration) |  |  | 453 |  |  |  | 2 |  |  |  | 1 |  |  |  | 1 |  |  |  | 457 |
Deferred and contingent purchase consideration |  |  | 13 |  |  |  | 5 |  |  |  | 13 |  |  |  | 81 |  |  |  | 112 |
Derivative financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency swaps hedging €500m 1.625% bonds 2024 outflows |  |  | 16 |  |  |  | 16 |  |  |  | 652 |  |  |  | — |  |  |  | 684 |
Currency swaps hedging €500m 1.625% bonds 2024 inflows |  |  | (10 | ) |  |  | (10 | ) |  |  | (634 | ) |  |  | — |  |  |  | (654 | )
Currency swaps hedging €500m 2.125% bonds 2027 outflows |  |  | 21 |  |  |  | 21 |  |  |  | 63 |  |  |  | 627 |  |  |  | 732 |
Currency swaps hedging €500m 2.125% bonds 2027 inflows |  |  | (13 | ) |  |  | (13 | ) |  |  | (39 | ) |  |  | (640 | ) |  |  | (705 | )
|  | Less than 1 year $m |  |  | Between 1 and 2 years $m |  |  | Between 2 and 5 years $m |  |  | More than 5 years $m |  |  | Total $m |
31 December 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-derivative financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank overdrafts |  |  | 87 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 87 |
Unsecured bank loans |  |  | 125 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 125 |
£400m 3.875% bonds 2022 |  |  | 21 |  |  |  | 21 |  |  |  | 548 |  |  |  | — |  |  |  | 590 |
£300m 3.75% bonds 2025 |  |  | 15 |  |  |  | 15 |  |  |  | 45 |  |  |  | 411 |  |  |  | 486 |
£350m 2.125% bonds 2026 |  |  | 10 |  |  |  | 10 |  |  |  | 29 |  |  |  | 482 |  |  |  | 531 |
€500m 2.125% bonds 2027 |  |  | 12 |  |  |  | 12 |  |  |  | 36 |  |  |  | 597 |  |  |  | 657 |
Lease liabilities |  |  | 97 |  |  |  | 116 |  |  |  | 193 |  |  |  | 3,451 |  |  |  | 3,857 |
Trade and other payables (excluding deferred and contingent purchase consideration) |  |  | 567 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 570 |
Deferred and contingent purchase consideration |  |  | 3 |  |  |  | 20 |  |  |  | 19 |  |  |  | 120 |  |  |  | 162 |
Derivative financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | )
Currency swaps hedging €500m 2.125% bonds 2027 outflows |  |  | 20 |  |  |  | 20 |  |  |  | 61 |  |  |  | 627 |  |  |  | 728 |
Currency swaps hedging €500m 2.125% bonds 2027 inflows |  |  | (12 | ) |  |  | (12 | ) |  |  | (36 | ) |  |  | (597 | ) |  |  | (657 | )
Disclosure of Short-term Deposits by Counterparty Credit Rating | The table below analyses the Group’s short-term deposits, money market funds and repurchase agreement collateral classified as cash and cash equivalents at 31 December 2020 by counterparty credit rating:
|  | AAA $m |  |  | AA $m |  |  | AA- $m |  |  | A+ $m |  |  | A $m |  |  | A- $m |  |  | Total $m |
Short-term deposits |  |  | — |  |  |  | — |  |  |  | 98 |  |  |  | 165 |  |  |  | 94 |  |  |  | 1 |  |  |  | 358 |
Money market funds |  |  | 892 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 892 |
Repurchase agreement collateral |  |  | 238 |  |  |  | 65 |  |  |  | 18 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 321 |

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