Financial highlights
Revenue
(1.9)%at constant exchange rates
Adjusted operating profit*
+6.2%at constant exchange rates
Adjusted earnings per share*
+2.7%at constant exchange rates
Dividend per share
+8.9%For the year ended 31 December 2023. *Alternative performance measure
| Financial results | 2023 | 2022 | Growth as reported | Growth at constant exchange rate◊ |
| Revenue | £11,797.1m | £12,039.5m | (2.0)% | (1.9)% |
| Adjusted operating profit* | £944.2m | £885.9m | 6.6% | 6.2% |
| Adjusted profit before income tax* | £853.7m | £818.0m | 4.4% | 3.4% |
| Adjusted earnings per share* | 191.1p | 184.3p | 3.7% | 2.7% |
| Dividend per shareΔ | 68.3p | 62.7p | 8.9% | |
| Statutory results | ||||
| Operating profit | £789.1m | £701.6m | 12.5% | |
| Profit before income tax | £698.6m | £634.6m | 10.1% | |
| Basic earnings per share | 157.1p | 141.7p | 10.9% |
Highlights include:
- Revenue declined by 1.9% at constant exchange rates and by 0.4% excluding the UK healthcare disposal≠; revenue remains significantly ahead of 2019
- Adjusted operating profit* increased by 6.2% at constant exchange rates, with growth of 7.6% excluding the UK healthcare disposal≠; reported operating profit rose by 12.5%
- Operating margin increased from 7.4% to 8.0%
- Adjusted earnings per share* increased by 2.7% at constant exchange rates; reported basic earnings per share increased by 10.9%
- Continued strong free cash flow* driven by cash conversion of 96%
- 31st consecutive year of annual dividend growth; total dividend per share growth of 8.9%
- 19 acquisitions agreed in 2023, with a committed spend of £468 million; two acquisitions announced today
- Net debt to EBITDA* of 1.1 times provides substantial headroom for acquisitions and other capital allocation options
* Alternative performance measure
◊ Growth at constant exchange rates is calculated by comparing the 2023 results to the 2022 results retranslated at the average exchange rates used for 2023
∆ The Board is recommending a 2023 final dividend of 50.1p per share. Including the 2023 interim dividend per share of 18.2p the total dividend per share of 68.3p represents an 8.9% increase compared to the 2022 total dividend per share
≠ The Group disposed of its UK healthcare business in December 2022
Consolidated income statement
For the year ended 31 December 2023
| 2023 £m |
2022 £m |
Actual exchange | Constant exchange | Constant exchange◊ Excluding disposal† | |
| Revenue | 11,797.1 | 12,039.5 | (2.0)% | (1.9)% | (0.4)% |
| Adjusted operating profit* | 944.2 | 885.9 | 6.6% | 6.2% | 7.6% |
| Finance income | 60.4 | 22.3 | |||
| Finance expense | (150.9) | (90.2) | |||
| Adjusted profit before income tax* | 853.7 | 818.0 | 4.4% | 3.4% | |
| Tax on adjusted profit | (213.4) | (201.2) | |||
| Adjusted profit for the year* | 640.3 | 616.8 | 3.8% | 2.8% | |
| Adjusted earnings per share* | 191.1p | 184.3p | 3.7% | 2.7% | |
| Adjusted operating profit | 944.2 | 885.9 | 6.6% | 6.2% | 7.6% |
| Adjusted for: | |||||
| Customer relationships, brands and technology amortisation | (135.6) | (128.4) | |||
| Acquisition related items | (19.5) | (55.9) | |||
| Operating profit | 789.1 | 701.6 | 12.5% | ||
| Finance income | 60.4 | 22.3 | |||
| Finance expense | (150.9) | (90.2) | |||
| Profit before income tax | 698.6 | 634.6 | 10.1% | ||
| Income tax | (172.4) | (160.2) | |||
| Profit for the year attributable to the Company's equity holders | 526.2 | 474.4 | 10.9% | ||
| Earnings per share attributable to the Company's equity holders | |||||
| Basic | 157.1p | 141.7p | 10.9% | ||
| Diluted | 156.0p | 140.7p |
* See Note 3 of the 2023 Annual Report for further details of the alternative performance measures.
◊ Growth at constant exchange rates is calculated by comparing the 2023 results to the 2022 results retranslated at the average exchange rates used for 2023.
† Excluding the impact from the disposal of our UK healthcare business in December 2022.
Consolidated balance sheet
At 31 December 2023
| 2023 £m |
2022 £m |
|
| Assets | ||
| Property, plant and equipment | 159.4 | 137.2 |
| Right-of-use assets | 616.3 | 529.6 |
| Intangible assets | 3,242.1 | 3,093.9 |
| Defined benefit pension assets | 69.0 | 60.5 |
| Derivative financial assets | 0.1 | - |
| Deferred tax assets | 14.2 | 4.0 |
| Total non-current assets | 4,101.1 | 3,825.2 |
| Inventories | 1,621.1 | 1,748.6 |
| Trade and other receivables | 1,578.5 | 1,557.4 |
| Income tax receivable | 8.7 | 12.6 |
| Derivative financial assets | 11.7 | 19.0 |
| Cash and cash equivalents | 1,426.1 | 1,504.0 |
| Total current assets | 4,646.1 | 4,841.6 |
| Total assets | 8,747.2 | 8,666.8 |
| Equity | ||
| Share capital | 108.6 | 108.5 |
| Share premium | 205.2 | 199.4 |
| Translation reserve | (170.2) | (74.2) |
| Other reserves | 16.7 | 17.7 |
| Retained earnings | 2,806.0 | 2,469.5 |
| Total equity attributable to the Company’s equity holders | 2,966.3 | 2,720.9 |
| Liabilities | ||
| Interest bearing loans and borrowings | 1,417.1 | 1,574.0 |
| Defined benefit pension liabilities | 19.6 | 20.6 |
| Other payables | 176.1 | 117.2 |
| Income tax payable | 0.5 | 1.1 |
| Provisions | 75.8 | 50.5 |
| Lease liabilities | 512.4 | 424.0 |
| Derivative financial liabilities | 78.7 | 100.5 |
| Deferred tax liabilities | 190.1 | 192.7 |
| Total non-current liabilities | 2,470.3 | 2,480.6 |
| Bank overdrafts | 874.2 | 825.9 |
| Interest bearing loans and borrowings | 130.0 | 161.0 |
| Trade and other payables | 2,071.6 | 2,249.4 |
| Income tax payable | 47.0 | 40.6 |
| Provisions | 10.0 | 24.2 |
| Lease liabilities | 152.1 | 145.9 |
| Derivative financial liabilities | 25.7 | 18.3 |
| Total current liabilities | 3,310.6 | 3,465.3 |
| Total liabilities | 5,780.9 | 5,945.9 |
| Total equity and liabilities | 8,747.2 | 8,666.8 |
Consolidated cash flow statement
For the year ended 31 December 2023
| 2023 £m |
2022 £m |
|
| Cash flow from operating activities | ||
| Profit before income tax | 698.6 | 634.6 |
| Adjusted for: | ||
| Net finance expense | 90.5 | 67.9 |
| Customer relationships, brands and technology amortisation | 135.6 | 128.4 |
| Acquisition related items | 19.5 | 55.9 |
| Disposal of business | - | (0.9) |
| Adjusted operating profit | 944.2 | 885.9 |
| Adjustments: | ||
| Depreciation and software amortisation | 207.2 | 189.5 |
| Other non-cash items | 6.5 | 15.9 |
| Working capital movement | (28.4) | 54.5 |
| Cash generated from operations before acquisition related items | 1,129.5 | 1,145.8 |
| Cash outflow from acquisition related items | (36.9) | (20.6) |
| Income tax paid | (188.6) | (173.6) |
| Cash inflow from operating activities | 904.0 | 951.6 |
| Cash flow from investing activities | ||
| Interest received | 54.4 | 16.2 |
| Purchase of property, plant and equipment and software | (58.3) | (46.7) |
| Sale of property, plant and equipment | 2.1 | 1.0 |
| Purchase of businesses | (337.7) | (243.6) |
| Disposal of business | - | 49.9 |
| Cash outflow from investing activities | (339.5) | (223.2) |
| Cash flow from financing activities | ||
| Interest paid excluding interest on lease liabilities | (107.6) | (61.9) |
| Dividends paid | (209.7) | (190.5) |
| Increase in borrowings | - | 346.4 |
| Repayment of borrowings | (159.5) | (131.8) |
| Receipts/(payments) on settlement of foreign exchange contracts | 21.6 | 86.2 |
| Payment of lease liabilities – principal | (159.4) | (153.1) |
| Payment of lease liabilities – interest | (28.6) | (22.0) |
| Proceeds from issue of ordinary shares to settle share options | 5.9 | 5.3 |
| Proceeds from exercise of market purchase share options | 46.8 | 36.8 |
| Purchase of employee trust shares | (76.4) | (74.0) |
| Cash outflow from financing activities | (666.9) | (331.0) |
| (Decrease)/increase in cash, cash equivalents and overdrafts | (102.4) | 397.4 |
| Cash and cash equivalents at start of year | 678.1 | 225.3 |
| (Decrease)/increase in cash and cash equivalents | (102.4) | 397.4 |
| Currency translation | (23.8) | 55.4 |
| Cash, cash equivalents and overdrafts at end of year | 551.9 | 678.1 |
|
Alternative performance measures * |
2023 |
2022 |
| Cash generated from operations before acquisition related items | 1,129.5 | 1,145.8 |
| Purchase of property, plant and equipment and software | (58.3) | (46.7) |
| Sale of property, plant and equipment | 2.1 | 1.0 |
| Payment of lease liabilities | (188.0) | (175.1) |
| Operating cash flow | 885.3 | 925.0 |
| Adjusted operating profit | 944.2 | 885.9 |
| Add back depreciation of right-of-use assets | 166.1 | 151.1 |
| Deduct payment of lease liabilities | (188.0) | (175.1) |
| Lease adjusted operating profit | 922.3 | 861.9 |
| Cash conversion (operating cash flow as a percentage of lease adjusted operating profit) | 96% | 107% |
† See Note 3 of the 2023 Annual Report for further details of the alternative performance measures.
Five year review
| IFRS 2023 £m |
IFRS 2022 £m |
IFRS 2021 £m |
IFRS 2020 £m |
IFRS 2019 £m |
|
| Revenue | 11,797.1 | 12,039.5 | 10,285.1 | 10,111.1 | 9,326.7 |
| Operating profit | 789.1 | 701.6 | 623.3 | 618.5 | 528.4 |
| Finance income | 60.4 | 22.3 | 10.7 | 10.4 | 12.4 |
| Finance expense | (150.9) | (90.2) | (65.3) | (73.2) | (87.5) |
| Profit on disposal of businesses | - | 0.9 | – | – | – |
| Profit before income tax | 698.6 | 634.6 | 568.7 | 555.7 | 453.3 |
| Income tax | (172.4) | (160.2) | (125.9) | (125.7) | (104.1) |
| Profit for the year attributable to the Company's equity holders | 526.2 | 474.4 | 442.8 | 430.0 | 349.2 |
| Basic earnings per share | 157.1 | 141.7p | 132.7p | 128.8p | 104.8p |
| Alternative performance measures | |||||
| Adjusted operating profit | 944.2 | 885.9 | 752.8 | 778.4 | 653.3 |
| Adjusted profit before income tax | 853.7 | 818.0 | 698.2 | 715.6 | 578.2 |
| Adjusted profit for the year | 640.3 | 616.8 | 542.5 | 550.5 | 440.6 |
| Adjusted earnings per share | 191.1p | 184.3p | 162.5p | 164.9p | 132.2p |
