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Annual Report 2021

Financial Review

 

Chief Financial Officer

Paul Hyde

"We have ensured that we enter the coming financial year with our brands positioned strongly for the future"

The financial results presented reflect a year which has been significantly impacted by the COVID-19 pandemic. We entered the year with several of our key markets in full lockdowns, closures of large parts of the global on-trade, and a sudden contraction of the global travel retail business. Our financial imperatives were to reduce our discretionary spend, conserve cash and secure our liquidity. With the support of a number of different stakeholders including employees, shareholders, pension trustees and funding partners we delivered against these priorities.

Our core revenue declined by 15% on a volume decline of 6% for the year. We have been able to dampen the full impact of this revenue decline with our reduced cost base to deliver a core contribution which has declined by 19%. Investing behind our brands remained a key priority in the second half of the year and with only an 8% decline year on year in brand investment we have ensured that we enter the coming financial year with our brands positioned strongly for the future.

Our improvement in free cash flow of £122.5m (2020 £64.8m) reflects our disciplined cash management supported with reductions in investment in capital expenditure and stock. This has resulted in our net debt reducing to £375.5m (2020 £451.8m) allowing us to enter the new year with strong financial fundamentals. 

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