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Financial risk management and derivative financial instruments (Tables) | 12 Months Ended
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Dec. 31, 2021
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 |  |  |  |  | 2021 $m |  |  |  |  |  | 2020 $m |
Put option |  | None |  |  |  |  |  |  | – |  |  |  |  |  |  |  | 4 |
Currency swaps |  | Cash flow hedge |  |  |  |  |  |  | (62 | ) |  |  |  |  |  |  | (17 | )
|  |  |  |  |  |  |  |  | (62 | ) |  |  |  |  |  |  | (13 | )
Analysed as: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-current assets |  |  |  |  |  |  |  |  | – |  |  |  |  |  |  |  | 5 |
Non-current liabilities |  |  |  |  |  |  |  |  | (62 | ) |  |  |  |  |  |  | (18 | )
|  |  |  |  |  |  |  |  | (62 | ) |  |  |  |  |  |  | (13 | )
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 |
|  |  |  |  |  |  | 2021 $m |  |  |  |  |  | 2020 $m |  |  |  |  |  | 2019 $m |
Increase/(decrease) in profit before tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sterling: US dollar exchange rate |  | 5¢ fall |  |  |  |  |  |  | 7.0 |  |  |  |  |  |  |  | 5.9 |  |  |  |  |  |  |  | 4.0 |
Euro: US dollar exchange rate |  | 5¢ fall |  |  |  |  |  |  | 0.2 |  |  |  |  |  |  |  | 0.3 |  |  |  |  |  |  |  | (2.6 | )
US dollar interest rates |  | 1% increase |  |  |  |  |  |  | 7.1 |  |  |  |  |  |  |  | 2.2 |  |  |  |  |  |  |  | (1.6 | )
Sterling interest rates |  | 1% increase |  |  |  |  |  |  | 5.2 |  |  |  |  |  |  |  | 12.9 |  |  |  |  |  |  |  | 0.6 |
Decrease in net liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sterling: US dollar exchange rate |  | 5¢ fall |  |  |  |  |  |  | 29.1 |  |  |  |  |  |  |  | 30.2 |  |  |  |  |  |  |  | 39.9 |
Euro: US dollar exchange rate |  | 5¢ fall |  |  |  |  |  |  | 49.7 |  |  |  |  |  |  |  | 50.6 |  |  |  |  |  |  |  | 24.1 |
Sterling: euro exchange rate |  | 5¢ fall |  |  |  |  |  |  | 67.4 |  |  |  |  |  |  |  | 68.2 |  |  |  |  |  |  |  | 33.0 |
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 |  |  |  | $400m |  |  |  | n/a |
Summary of covenant tests which are calculated on a frozen GAAP Basis | The measures used in the covenant tests are calculated on a frozen GAAP basis and do not align to the values reported by the Group as Non-GAAP measures:
|  |  |  |  | 2021 |  |  |  |  |  | 2020 |  |  |  |  |  | 2019 |
Covenant EBITDA ($m) |  |  |  |  |  |  | 601 |  |  |  |  |  |  |  | 272 |  |  |  |  |  |  |  | 897 |
Covenant net debt ($m) |  |  |  |  |  |  | 1,801 |  |  |  |  |  |  |  | 2,375 |  |  |  |  |  |  |  | 2,241 |
Covenant interest payable ($m) |  |  |  |  |  |  | 133 |  |  |  |  |  |  |  | 111 |  |  |  |  |  |  |  | 99 |
Leverage |  |  |  |  |  |  | 3.00 |  |  |  |  |  |  |  | 8.73 |  |  |  |  |  |  |  | 2.50 |
Interest cover |  |  |  |  |  |  | 4.52 |  |  |  |  |  |  |  | 2.45 |  |  |  |  |  |  |  | 9.06 |
Liquidity ($m) |  |  |  |  |  |  | 2,655 |  |  |  |  |  |  |  | 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.
31 December 2021 |  |  |  | Less than 1 year $m |  |  | Between 1 and 2 years $m |  |  | Between 2 and 5 years $m |  |  | More than 5 years $m |  |  | Total $m |
Non-derivative financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank overdrafts |  |  |  |  | 59 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 59 |
£173m 3.875% bonds 2022 |  |  |  |  | 241 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 241 |
€ 500m 1.625% bonds 2024 |  |  |  |  | 9 |  |  |  | 9 |  |  |  | 575 |  |  |  | – |  |  |  | 593 |
£300m 3.75% bonds 2025 |  |  |  |  | 15 |  |  |  | 15 |  |  |  | 435 |  |  |  | – |  |  |  | 465 |
£350m 2.125% bonds 2026 |  |  |  |  | 10 |  |  |  | 10 |  |  |  | 502 |  |  |  | – |  |  |  | 522 |
€ 500m 2.125% bonds 2027 |  |  |  |  | 12 |  |  |  | 12 |  |  |  | 36 |  |  |  | 578 |  |  |  | 638 |
£400m 3.375% bonds 2028 |  |  |  |  | 18 |  |  |  | 18 |  |  |  | 55 |  |  |  | 575 |  |  |  | 666 |
Lease liabilities |  |  |  |  | 58 |  |  |  | 49 |  |  |  | 123 |  |  |  | 3,212 |  |  |  | 3,442 |
Trade and other payables (excluding deferred and contingent purchase consideration) |  |  |  |  | 550 |  |  |  | 2 |  |  |  | 1 |  |  |  | 2 |  |  |  | 555 |
Deferred and contingent purchase consideration |  |  |  |  | – |  |  |  | – |  |  |  | 52 |  |  |  | 42 |  |  |  | 94 |
Derivative financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency swaps hedging € 500m 1.625% bonds 2024 outflows |  |  |  |  | 16 |  |  |  | 16 |  |  |  | 628 |  |  |  | – |  |  |  | 660 |
Currency swaps hedging € 500m 1.625% bonds 2024 inflows |  |  |  |  | (9 | ) |  |  | (9 | ) |  |  | (575 | ) |  |  | – |  |  |  | (593 | )
Currency swaps hedging € 500m 2.125% bonds 2027 outflows |  |  |  |  | 21 |  |  |  | 21 |  |  |  | 62 |  |  |  | 598 |  |  |  | 702 |
Currency swaps hedging € 500m 2.125% bonds 2027 inflows |  |  |  |  | (12 | ) |  |  | (12 | ) |  |  | (36 | ) |  |  | (578 | ) |  |  | (638 | )
31 December 2020 |  |  |  |  | Less than 1 year $m |  |  | Between 1 and 2 years $m |  |  | Between 2 and 5 years $m |  |  | More than 5 years $m |  |  | Total $m |
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) |  |  |  |  |  |  | 416 |  |  |  | 2 |  |  |  | 1 |  |  |  | 1 |  |  |  | 420 |
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 | )
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 by counterparty credit rating:
31 December 2021 |  |  |  |  | AAA $m |  |  | AA $m |  |  | AA- $m |  |  | A+ $m |  |  | A $m |  |  | A- $m |  |  | Total $m |
Short-term deposits |  |  |  |  |  |  | – |  |  |  | – |  |  |  | 87 |  |  |  | 45 |  |  |  | 169 |  |  |  | – |  |  |  | 301 |
Money market funds |  |  |  |  |  |  | 1,025 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 1,025 |
31 December 2020 |  |  |  |  | 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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