Operating expenses (Tables)

12 Months Ended

Dec. 31, 2022

Text block [abstract]

Summary of Operating Expenses by Function

All figures in £ millions	2022			2021			2020
By function:
Cost of goods sold		2,046			1,747			1,767
Operating expenses
Distribution costs		61			62			59
Selling, marketing and product development costs		564			521			572
Administrative and other expenses		823			802			816
Restructuring costs		150			214			–
Other income		(49	)		(37	)		(45	)
Total net operating expenses		1,549			1,562			1,402
Other net gains and losses		(24	)		(63	)		(178	)
Total		3,571			3,246			2,991

Summary of Analysis of Restructuring Costs

All figures in £ millions	2022		2021		2020
By nature:
Product costs		11		19		–
Employee costs		73		32		–
Depreciation and impairment of non-current assets		51		145		–
Property and facilities		7		11		–
Technology and communications		1		3		–
Professional and outsourced services		7		4		–
Total restructuring – operating expenses		150		214		–

Summary of Operating Expenses by Nature

All figures in £ millions	Notes		2022			2021			2020
By nature:
Royalties expensed				194			185			191
Other product costs				412			353			349
Employee benefit expense		5		1,605			1,365			1,337
Contract labour				73			69			67
Employee-related expense				52			21			30
Promotional costs				268			239			233
Depreciation and impairment of property, plant and equipment and investment property		10		136			241			125
Amortisation and impairment of intangible assets – product development		20		303			279			280
Amortisation and impairment of intangible assets – software		11		125			117			112
Amortisation and impairment of intangible assets – other		11		54			50			80
Property and facilities				102			124			85
Technology and communications				221			215			216
Professional and outsourced services				501			477			498
Other general and administrative costs				76			58			71
Costs capitalised				(478	)		(447	)		(460	)
Other net gains and losses				(24	)		(63	)		(178	)
Other income				(49	)		(37	)		(45	)
Total				3,571			3,246			2,991

Summary of Services From the Group's Auditors

During the year the Group obtained the following services from the Group’s auditors, which changed to EY in 2022 and was PwC in 2021 and 2020:

All figures in £ millions	2022		2021		2020
The audit of parent company and consolidated financial statements		6		5		5
The audit of the company’s subsidiaries		1		2		2
Total audit fees		7		7		7
Audit-related and other assurance services		–		–		–
Other non-audit services		–		–		–
Total other services		–		–		–
Total non-audit services		–		–		–
Total		7		7		7

Summary of Reconciliation Between Audit and Non-Audit Service Fees

Reconciliation between audit and non-audit service fees is shown below:

All figures in £ millions	2022		2021		2020
Group audit fees including fees for attestation under section 404 of the Sarbanes-Oxley Act		7		7		7
Non-audit fees		–		–		–
Total		7		7		7