Financial risk management and derivative financial instruments (Tables)

12 Months Ended

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