Q2_Half_Year_Folio

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

Form 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

July 26, 2018

 

Commission File Number 001-14978

 

SMITH & NEPHEW plc

(Registrant’s name)

 

15 Adam Street

London, England, WC2N 6LA

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F          Form 40-F __

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

 

Yes                          No 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

 

Yes                          No 

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2 (b) under the Securities Exchange Act of 1934.

 

Yes                          No 

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2 (b) : 82-  n/a.

 

 

 

 


 

 

Smith & Nephew plc

 

INDEX TO EXHIBITS

 

Item 1.  Press release entitled “Smith & Nephew Second Quarter and First Half 2018 Results”, dated July 26, 2018.

 

 


 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

 

 

Smith & Nephew plc

 

 

(Registrant)

 

 

 

 

 

 

Date: July 26, 2018

By:

/s/ Susan Swabey

 

 

Susan Swabey

 

 

Company Secretary

 

 

 

 

 


 

Picture 66

Smith & Nephew Second Quarter and First Half 2018 Results

Q2 revenue growth of 4% reported and 2% underlying
Full year guidance reconfirmed

 

26 July 2018

 

Smith & Nephew (LSE:SN, NYSE:SNN), the global medical technology business, reports results for the second quarter and first half ended 30 June 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

Trading2

 

 

30 June 

 

1 July 

 

Reported

 

30 June 

 

1 July 

 

Underlying

 

 

2018

 

2017

 

growth

 

2018

 

2017

 

growth

 

    

$m

    

$m

    

%

    

$m

    

$m

    

%

Second Quarter Results1

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

1,245

 

1,194

 

 4

 

1,245

 

1,194

 

 2

 

 

 

 

 

 

 

 

 

 

 

 

 

First Half Results1

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

2,440

 

2,336

 

 4

 

2,440

 

2,336

 

 1

Operating profit

 

372

 

414

 

 

 

 

 

 

 

 

Trading profit

 

 

 

 

 

 

 

507

 

493

 

 

Operating/trading profit margin (%)

 

15.3

 

17.7

 

 

 

20.8

 

21.1

 

 

EPS/ EPSA (cents)

 

31.4

 

37.0

 

 

 

43.7

 

43.0

 

 

 

Namal Nawana, Chief Executive Officer, said:

We delivered 4% reported and 2% underlying growth in the quarter. We reconfirm our full year guidance.

 

“In my first few weeks at Smith & Nephew I have reviewed our businesses and operations and validated that we have an excellent product portfolio with numerous best-in-class medical technologies. We are now focused on energising and organising the business to accelerate growth.”

 

  Second Quarter Highlights1

·

Q2 reported revenue growth of 4%, including 2% FX tailwind, with underlying growth of 2%

·

Established Markets returned to growth, with improved dynamics across Hip and Knee Implants and strong performance from Sports Medicine and Advanced Wound Devices

·

Emerging Markets up 6%; double digit China growth offset by lower level of Middle East tenders

 

First Half Highlights1

·

H1 reported revenue growth of 4%, including 3% FX tailwind, with underlying revenue up 1%

o

Trading profit margin down 30bps, in line with guidance

o

Operating profit margin down 240bps, reflecting $58 million costs of APEX programme

·

APEX programme on track, with actions undertaken in H1 which will deliver more than $50 million of annualised benefits

·

Trading cash flow of $387 million, up from $327 million in 2017, with higher trading profit to cash conversion ratio of 76% (2017: 66%)

·

Adjusted earnings per share (EPSA) up 2% to 43.7¢, reflecting improved trading (EPS 31.4¢; 2017 37.0¢)

·

Interim dividend of 14.0¢ per share, in-line with our progressive dividend policy (2017: 12.3¢)

 

Full year guidance unchanged

·

Underlying revenue growth expected to be in the range 2-3% with a trading profit margin at or above that achieved in 2017

·

Tax rate on trading results expected to be within the range of 20-21% barring changes to tax legislation or other one-off items

 

Picture 70


 

Analyst conference call

An analyst meeting and conference call to discuss Smith & Nephew’s second quarter trading and first half 2018 results for the period ended 30 June 2018 will be held today, Thursday 26 July at 9:00am BST / 4:00am EDT. This will be webcast live and available for replay shortly after. The details can be found on the Smith & Nephew website at www.smith-nephew.com/results.

 

Enquiries

 

ndreq

 

Investors

 

Andrew Swift

+44 (0) 20 7960 2285

Smith & Nephew

 

 

 

Media

 

Charles Reynolds

+44 (0) 20 7401 7646

Smith & Nephew

 

 

 

Ben Atwell / Andrew Ward

+44 (0) 20 3727 1000

FTI Consulting

 

 

Notes

 

1.

Unless otherwise specified as ‘reported’ all revenue growth throughout this document is ‘underlying’ after adjusting for the effects of currency translation and including the comparative impact of acquisitions and excluding disposals. All percentages compare to the equivalent 2017 period.

 

Underlying revenue growth is used to compare the revenue in a given period to the comparative period on a like-for-like basis. Underlying revenue growth reconciles to reported revenue growth, the most directly comparable financial measure calculated in accordance with IFRS, by making adjustments for the effect of acquisitions and disposals and the impact of movements in exchange rates (currency impact), as described below.

 

The effect of acquisitions and disposals measures the impact on revenue from newly acquired business combinations and recent business disposals. This is calculated by comparing the current year, constant currency actual revenue (which include acquisitions and exclude disposals from the relevant date of completion) with prior year, constant currency actual revenue, adjusted to include the results of acquisitions and exclude disposals for the corresponding period in the prior year.

 

Currency impact measures the increase/decrease in revenue resulting from currency movements on non-US Dollar sales and is measured as the difference between: 1) the increase/decrease in current year revenue translated into US Dollars at the current year average rate and the prior year revenue translated at the prior year average rate; and 2) the increase/decrease measured by translating current and prior year revenue into US Dollars using a constant fixed rate.

 

2.

Certain items included in ‘trading results’, such as trading profit, trading profit margin, trading cash flow, EPSA and underlying growth are non-IFRS financial measures. The non-IFRS financial measures reported in this announcement are explained in Note 8 and are reconciled to the most directly comparable financial measure prepared in accordance with IFRS. Reported results represent IFRS financial measures as shown in the Condensed Consolidated Interim Financial Statements.

 

2

 


 

Smith & Nephew Second Quarter Trading and First Half 2018 Results

 

Second Quarter 2018 Trading Update

 

Our second quarter revenue was $1,245 million (2017: $1,194 million), up 4% on a reported basis, including a foreign exchange tailwind of 2%. Revenue was up 2% on an underlying basis.

 

The second quarter 2018 comprised 64 trading days, one more than in the same period of 2017, which typically impacts our surgical businesses more than our Advanced Wound Management businesses and the Established Markets more than the Emerging Markets.

 

Unless otherwise specified as ‘reported’ all revenue growth rates throughout this document are underlying increases/decreases after adjusting for the effects of currency translation and including the comparative impact of acquisitions and excluding disposals. All percentages compare to the equivalent 2017 period.

 

Second Quarter Consolidated Revenue Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

30 June 

    

1 July 

    

Reported

    

Underlying

    

Acquisitions

    

Currency

 

 

2018

 

2017

 

growth

 

Growth(i)

 

/disposals

 

impact

Consolidated revenue by franchise

 

$m

 

$m

 

%

 

%

 

%

 

%

Sports Medicine, Trauma & Other

 

502

 

480

 

 5

 

 2

 

 1

 

 2

Sports Medicine Joint Repair

 

173

 

152

 

13

 

 8

 

 3

 

 2

Arthroscopic Enabling Technologies

 

153

 

151

 

 1

 

-1 

 

 -

 

 2

Trauma & Extremities

 

122

 

127

 

-4 

 

-5 

 

 -

 

 1

Other Surgical Businesses

 

54

 

50

 

10

 

 8

 

 -

 

 2

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconstruction

 

414

 

396

 

 4

 

 3

 

 -

 

 1

Knee Implants

 

258

 

246

 

 5

 

 3

 

 -

 

 2

Hip Implants

 

156

 

150

 

 4

 

 1

 

 -

 

 3

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Wound Management

 

329

 

318

 

 4

 

 1

 

 -

 

 3

Advanced Wound Care

 

187

 

177

 

 6

 

 2

 

 -

 

 4

Advanced Wound Bioactives

 

87

 

92

 

-5 

 

-6 

 

 -

 

 1

Advanced Wound Devices

 

55

 

49

 

12

 

 9

 

 -

 

 3

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

1,245

 

1,194

 

 4

 

 2

 

 -

 

 2

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated revenue by geography

 

 

 

 

 

 

 

 

 

 

 

 

US

 

590

 

582

 

 1

 

 1

 

 -

 

 -

Other Established Markets(ii)(iii)

 

429

 

403

 

 6

 

 1

 

 -

 

 5

Total Established Markets

 

1,019

 

985

 

 3

 

 1

 

 -

 

 2

Emerging Markets(iii)

 

226

 

209

 

 8

 

 6

 

 -

 

 2

Total

 

1,245

 

1,194

 

 4

 

 2

 

 -

 

 2

 

(i)

Underlying growth is defined in Note 1 on page 2

(ii)

Other Established Markets are Europe, Canada, Japan, Australia and New Zealand

(iii)

Included within the Q2 2017 analysis is a reclassification of $5 million of revenue formerly included in Other Established Markets which has now been included in Emerging Markets in order to present consistent analysis to the Q2 2018 results

 

3

 


 

Regional performance

 

Revenue grew 1% in the Established Markets in the quarter, an improved performance over the first quarter as procedure levels returned to more normal levels in most markets over the period.

 

Revenue was up 6% in the Emerging Markets. China, our largest Emerging Markets business, delivered strong double digit growth. Growth across most of our other Emerging Markets countries remained good, although the Middle East faced a strong comparator period following a significant tender order in 2017 which mainly benefitted our Trauma & Extremities franchise.

 

 

Q2 2018 Franchise Highlights

 

Sports Medicine Joint Repair delivered 8% revenue growth in the quarter. Within this, the recently acquired REGENETEN Bioinductive Implant for rotator cuff repair is performing ahead of our expectations, contributing to sustained growth from our shoulder repair portfolio. In Arthroscopic Enabling Technologies revenue was down -1%, an improvement over recent quarters, as our actions are stabilising performance in mechanical resection.

 

Trauma & Extremities revenue was down -5%, reflecting the tough comparator period in the Middle East described above. We delivered a strong performance in Plates and Screws following the successful launch of the EVOS SMALL plating system, which we expect to drive an improved franchise performance in the second half of the year.

 

Our Other Surgical Businesses franchise revenue grew 8% in the quarter. Our robotic NAVIO Surgical System had a strong quarter in the US as we benefited from its unique portfolio of partial and total knee applications.

 

Knee Implants revenue was up 3% driven by our leading portfolio including the JOURNEY II, LEGION and ANTHEM knee systems. Revenue from our Hip Implants franchise was up 1%, globally with the US delivering its strongest growth in a number of years driven by a renewed focus on our POLAR3 total hip solution and its class-leading survivorship data. 

 

Advanced Wound Care delivered 2% revenue growth as our actions to improve performance in Europe are beginning to have a positive impact, although certain end markets remain soft, as previously reported.

 

Advanced Wound Bioactives revenue declined -6%, an improvement on the first quarter. SANTYL performed sequentially better, but OASIS continued to perform significantly below last year.

 

Advanced Wound Devices delivered 9% revenue growth. Our disposable negative pressure wound therapy (‘NPWT’) device PICO, continued to perform strongly. During the quarter, the UK’s National Institute for Health and Care Excellence (NICE) issued a Medtech innovation briefing on the prophylactic use of PICO as a potentially more effective alternative to standard surgical dressings in the prevention of surgical site complications. This is the only such brief published by NICE on an NPWT device for preventing this type of complications.

 

 

4

 


 

First Half 2018 Consolidated Analysis

 

Smith & Nephew results for the first half ended 30 June 2018:

 

 

 

 

 

 

 

 

 

 

Half year

 

Half year

 

Reported

 

 

 

2018

 

2017

 

growth

 

 

    

$m

    

$m

    

%

 

Revenue

 

2,440

 

2,336

 

 4

 

Operating profit

 

372

 

414

 

-10 

 

Acquisition-related costs

 

 2

 

 2

 

 

 

Restructuring and rationalisation costs

 

58

 

 -

 

 

 

Amortisation and impairment of acquisition intangibles

 

57

 

65

 

 

 

Legal and other

 

18

 

12

 

 

 

Trading profit (non-IFRS)

 

507

 

493

 

 3

 

 

 

¢

 

¢

 

 

 

Earnings per share “EPS”

 

31.4

 

37.0

 

-15 

 

Acquisition-related costs

 

0.2

 

0.2

 

 

 

Restructuring and rationalisation costs

 

5.0

 

 -

 

 

 

Amortisation and impairment of acquisition intangibles

 

5.1

 

4.7

 

 

 

Legal and other

 

2.0

 

1.1

 

 

 

Adjusted Earnings per share “EPSA”

 

43.7

 

43.0

 

 2

 

 

 

 

 

 

 

 

 

 

First Half 2018 Analysis

 

Our first half revenue was $2,440 million (H1 2017: $2,336 million), up 4% on a reported basis, including a foreign exchange tailwind of 3%. Revenue was up 1% on an underlying basis.

 

Reported operating profit of $372 million (H1 2017: $414 million) is after integration and acquisition costs, as well as restructuring and rationalisation costs, amortisation of acquisition intangibles and legal and other items incurred in the first half (see Note 8 to the Interim Financial Statements).

 

Trading profit was $507 million in the first half (H1 2017: $493 million), and the trading profit margin was 20.8% (H1 2017: 21.1%), down 30bps due to the expected revenue and cost phasing across the year.

In the first half, the Accelerating Performance and Execution (APEX) programme, initiated at the end of 2017, incurred restructuring costs, primarily cash, of $58 million with actions undertaken that will result in annualised benefits of more than $50 million. We are on track across all three workstreams of 1) Manufacturing, Warehousing and Distribution, 2) General and Administrative (G&A) Expenses, and 3) Commercial Effectiveness. APEX is expected to drive an annualised benefit of $160 million by 2022 for a one-off cost of $240 million.

 

The net interest charge within reported results was $25 million (H1 2017: $25 million).

 

The tax rate on trading results for the 2018 half year was 20.1% (H1 2017: 19.0%) in line with our guided rate of between 20% and 21%. The reported tax rate for the 2018 half year was 19.6% (H1 2017: 15.4%) (see Note 3 for further details on taxation).

 

Adjusted earnings per share (‘EPSA’) was up 2% at 43.7¢ (87.4¢ per ADS) (H1 2017: 43.0¢). Basic earnings per share (‘EPS’) was 31.4¢ (62.8¢ per ADS) (H1 2017: 37.0¢), primarily arising from the restructuring costs in the current year. 

 

Cash generated from operations was $418 million (H1 2017: $438 million) and trading cash flow was $387 million (H1 2017: $327 million) (see Note 8 for a reconciliation between cash generated from operations and trading cash flow). The trading profit to cash conversion ratio was 76% (H1 2017: 66%) as a result of actions to improve working capital performance.

 

 

5

 


 

Interim Dividend

 

Consistent with previous periods, the interim dividend is set by a formula and is equivalent to 40% of the total dividend for the previous year. The interim dividend for the first half of 2018 is therefore 14.0¢ per share (28.0¢ per ADS), a 14% increase on last year (H1 2017: 12.3¢ per share). This equates to 10.7 pence per share at prevailing exchange rates as of 20 July 2018. The interim dividend will be paid on Wednesday 31 October 2018 to shareholders on the register at the close of business on Friday 5 October 2018.

 

 

Outlook

 

Smith & Nephew is on-track to deliver on its guidance for full year underlying revenue growth in the range of 2-3% and a trading profit margin at or above that achieved in 2017, as updated at the first quarter trading results.

 

Our reported revenue growth rate will also include an estimated 1% benefit from foreign exchange rates prevailing on 20 July 2018 and the Rotation Medical acquisition.

 

We continue to expect the 2018 tax rate on trading results to be in the range of 20% to 21%, barring any changes to tax legislation or other one-off items.

 

 

6

 


 

Forward calendar

The Q3 Trading Report will be released on 1 November 2018.

 

About Smith & Nephew

Smith & Nephew is a global medical technology business dedicated to supporting healthcare professionals in their daily efforts to improve the lives of their patients. With leadership positions in Orthopaedic Reconstruction, Advanced Wound Management, Sports Medicine and Trauma & Extremities, Smith & Nephew has more than 15,000 employees and a presence in more than 100 countries. Annual sales in 2017 were $4.8 billion. Smith & Nephew is a member of the FTSE100 (LSE:SN, NYSE:SNN).

 

For more information about Smith & Nephew, please visit our corporate website www.smith-nephew.com,  follow @SmithNephewplc on Twitter or visit SmithNephewplc on Facebook.com.

 

Forward-looking Statements

This document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading margins, market trends and our product pipeline are forward-looking statements. Phrases such as "aim", "plan", "intend", "anticipate", "well-placed", "believe", "estimate", "expect", "target", "consider" and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. For Smith & Nephew, these factors include: economic and financial conditions in the markets we serve, especially those affecting health care providers, payers and customers; price levels for established and innovative medical devices; developments in medical technology; regulatory approvals, reimbursement decisions or other government actions; product defects or recalls or other problems with quality management systems or failure to comply with related regulations; litigation relating to patent or other claims; legal compliance risks and related investigative, remedial or enforcement actions; disruption to our supply chain or operations or those of our suppliers; competition for qualified personnel; strategic actions, including acquisitions and dispositions, our success in performing due diligence, valuing and integrating acquired businesses; disruption that may result from transactions or other changes we make in our business plans or organisation to adapt to market developments; and numerous other matters that affect us or our markets, including those of a political, economic, business, competitive or reputational nature. Please refer to the documents that Smith & Nephew has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Smith & Nephew's most recent annual report on Form 20-F, for a discussion of certain of these factors. Any forward-looking statement is based on information available to Smith & Nephew as of the date of the statement. All written or oral forward-looking statements attributable to Smith & Nephew are qualified by this caution. Smith & Nephew does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in Smith & Nephew's expectations.

 

 Trademark of Smith & Nephew. Certain marks registered US Patent and Trademark Office.

 

7

 


 

 

First Half Consolidated Revenue Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

30 June 

    

1 July 

    

Reported

    

Underlying

    

Acquisitions

    

Currency

 

 

 

2018

 

2017

 

growth

 

Growth(i)

 

/disposals

 

impact

 

Consolidated revenue by franchise

 

$m

 

$m

 

%

 

%

 

%

 

%

 

Sports Medicine, Trauma & Other

 

994

 

946

 

 5

 

 1

 

 1

 

 3

 

Sports Medicine Joint Repair

 

343

 

303

 

13

 

 7

 

 3

 

 3

 

Arthroscopic Enabling Technologies

 

305

 

304

 

 -

 

-3 

 

 -

 

 3

 

Trauma & Extremities

 

243

 

246

 

-1 

 

-3 

 

 -

 

 2

 

Other Surgical Businesses

 

103

 

93

 

11

 

 9

 

 -

 

 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconstruction

 

827

 

792

 

 4

 

 1

 

 -

 

 3

 

Knee Implants

 

517

 

490

 

 5

 

 3

 

 -

 

 2

 

Hip Implants

 

310

 

302

 

 3

 

 -

 

 -

 

 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Wound Management

 

619

 

598

 

 4

 

-1 

 

 -

 

 5

 

Advanced Wound Care

 

370

 

347

 

 7

 

 1

 

 -

 

 6

 

Advanced Wound Bioactives

 

146

 

158

 

-8 

 

-8 

 

 -

 

 -

 

Advanced Wound Devices

 

103

 

93

 

11

 

 6

 

 -

 

 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

2,440

 

2,336

 

 4

 

 1

 

 -

 

 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated revenue by geography

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

1,135

 

1,137

 

 -

 

-1 

 

 1

 

 -

 

Other Established Markets(ii)(iii)

 

875

 

812

 

 8

 

 -

 

 -

 

 8

 

Total Established Markets

 

2,010

 

1,949

 

 3

 

-1 

 

 1

 

 3

 

Emerging Markets(iii)

 

430

 

387

 

11

 

 8

 

 -

 

 3

 

Total

 

2,440

 

2,336

 

 4

 

 1

 

 -

 

 3

 

 

(i)

Underlying growth is defined in Note 1 on page 2

(ii)

Other Established Markets are Europe, Canada, Japan, Australia and New Zealand

(iii)

Included within the first half 2017 analysis is a reclassification of $10 million of revenue formerly included in Other Established Markets which has now been included in Emerging Markets in order to present consistent analysis to the first half 2018 results

 

8

 


 

 

2018 HALF YEAR CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

Unaudited Group Income Statement for the half year to 30 June 2018

 

 

 

 

 

 

 

 

 

 

 

 

Half year

 

Half year

 

    

 

    

2018

    

2017

 

 

Notes

 

$m

 

$m

Revenue

 

2

 

2,440

 

2,336

Cost of goods sold

 

 

 

(653)

 

(603)

Gross profit

 

 

 

1,787

 

1,733

Selling, general and administrative expenses

 

 

 

(1,299)

 

(1,212)

Research and development expenses

 

 

 

(116)

 

(107)

Operating profit

 

8

 

372

 

414

Interest income

 

 

 

 4

 

 3

Interest expense

 

 

 

(29)

 

(28)

Other finance costs

 

 

 

(8)

 

(6)

Share of results of associates

 

 

 

 2

 

 -

Profit before taxation

 

 

 

341

 

383

Taxation

 

3

 

(67)

 

(59)

Attributable profitA

 

 

 

274

 

324

Earnings per shareA

 

 

 

 

 

 

Basic

 

8

 

31.4¢

 

37.0¢

Diluted

 

 

 

31.2¢

 

37.0¢

 

 

 

Unaudited Group Statement of Comprehensive Income for the half year to 30 June 2018

 

 

 

 

 

 

 

 

Half year

 

Half year

 

    

2018

    

2017

 

 

$m

 

$m

Attributable profitA

 

274

 

324

Other comprehensive income

 

 

 

 

Items that will not be reclassified to income statement

 

 

 

 

Remeasurement of net retirement benefit obligations

 

 8

 

11

Taxation on other comprehensive income

 

(8)

 

 3

Total items that will not be reclassified to income statement

 

 -

 

14

 

 

 

 

 

Items that may be reclassified subsequently to income statement

 

 

 

 

Exchange differences on translation of foreign operations

 

(78)

 

114

Fair value remeasurement of available for sale asset

 

 -

 

(9)

Net gains/(losses) on cash flow hedges

 

23

 

(23)

Total items that may be reclassified subsequently to income statement

 

(55)

 

82

Other comprehensive (loss)/income for the period, net of taxation

 

(55)

 

96

Total comprehensive income for the periodA

 

219

 

420

 

A

Attributable to the equity holders of the parent and wholly derived from continuing operations.

 

9

 


 

Unaudited Group Balance Sheet as at 30 June 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 June 

 

31 December 

 

1 July 

 

    

 

    

2018

    

2017

    

2017

 

 

Notes

 

$m

 

$m

 

$m

ASSETS

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

1,056

 

1,049

 

1,032

Goodwill

 

 

 

2,348

 

2,371

 

2,227

Intangible assets

 

 

 

1,290

 

1,371

 

1,360

Investments

 

 

 

21

 

21

 

23

Investment in associates

 

 

 

119

 

118

 

112

Other non-current assets

 

 

 

13

 

16

 

 -

Retirement benefit assets

 

 

 

81

 

62

 

 -

Deferred tax assets

 

 

 

129

 

127

 

106

 

 

 

 

5,057

 

5,135

 

4,860

Current assets

 

 

 

 

 

 

 

 

Inventories

 

 

 

1,352

 

1,304

 

1,298

Trade and other receivables

 

 

 

1,205

 

1,258

 

1,212

Cash at bank

 

6

 

99

 

169

 

69

 

 

 

 

2,656

 

2,731

 

2,579

TOTAL ASSETS

 

 

 

7,713

 

7,866

 

7,439

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

 

Equity attributable to owners of the Company

 

 

 

 

 

 

 

 

Share capital

 

 

 

178

 

178

 

178

Share premium

 

 

 

607

 

605

 

603

Capital redemption reserve

 

 

 

17

 

17

 

17

Treasury shares

 

 

 

(234)

 

(257)

 

(260)

Other reserves

 

 

 

(283)

 

(228)

 

(293)

Retained earnings

 

 

 

4,358

 

4,329

 

3,956

Total equity

 

 

 

4,643

 

4,644

 

4,201

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

Long-term borrowings

 

6

 

1,420

 

1,423

 

1,604

Retirement benefit obligations

 

 

 

131

 

131

 

153

Other payables

 

 

 

94

 

128

 

64

Provisions

 

 

 

63

 

97

 

121

Deferred tax liabilities

 

 

 

115

 

97

 

111

 

 

 

 

1,823

 

1,876

 

2,053

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Bank overdrafts and loans

 

6

 

86

 

27

 

64

Trade and other payables

 

 

 

831

 

957

 

792

Provisions

 

 

 

137

 

129

 

115

Current tax payable

 

 

 

193

 

233

 

214

 

 

 

 

1,247

 

1,346

 

1,185

Total liabilities

 

 

 

3,070

 

3,222

 

3,238

TOTAL EQUITY AND LIABILITIES

 

 

 

7,713

 

7,866

 

7,439

 

 

10

 


 

 

Unaudited Condensed Group Cash Flow Statement for the half year to 30 June 2018

 

 

 

 

 

 

 

    

Half year

    

Half year

 

 

2018

 

2017

 

 

$m

 

$m

Cash flows from operating activities

 

  

 

  

Profit before taxation

 

341

 

383

Net interest payable

 

25

 

25

Depreciation, amortisation and impairment

 

228

 

219

Share of results of associates

 

(2)

 

 -

Share-based payments expense (equity settled)

 

18

 

15

Net movement in post-retirement obligations

 

(9)

 

(8)

Movement in working capital and provisions

 

(183)

 

(196)

Cash generated from operations

 

418

 

438

Net interest and finance costs paid

 

(26)

 

(25)

Income taxes paid

 

(95)

 

(62)

Net cash inflow from operating activities

 

297

 

351

 

 

 

 

 

Cash flows from investing activities

 

  

 

  

Acquisitions, net of cash acquired

 

(20)

 

(32)

Capital expenditure

 

(178)

 

(178)

Purchase of investments

 

(1)

 

(7)

Net cash used in investing activities

 

(199)

 

(217)

Net cash inflow before financing activities

 

98

 

134

 

 

 

 

 

Cash flows from financing activities

 

  

 

  

Proceeds from issue of ordinary share capital

 

 2

 

 3

Proceeds from own shares

 

 1

 

 1

Purchase of own shares

 

(32)

 

(35)

Equity dividends paid

 

(198)

 

(162)

Cash movements in borrowings

 

54

 

53

Settlement of currency swaps

 

 4

 

10

Net cash used in financing activities

 

(169)

 

(130)

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(71)

 

 4

Cash and cash equivalents at beginning of period

 

155

 

38

Exchange adjustments

 

(3)

 

 2

Cash and cash equivalents at end of periodB

 

81

 

44

 

B

Cash and cash equivalents at the end of the period are net of overdrafts of $18 million (1 July 2017: $25 million).

 

11

 


 

Unaudited Group Statement of Changes in Equity for the half year to 30 June 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Capital 

    

 

    

 

    

 

    

 

 

 

 

Share 

 

Share 

 

redemption 

 

Treasury 

 

Other 

 

Retained 

 

Total 

 

 

 

capital 

 

premium 

 

reserve 

 

shares 

 

reserves 

 

earnings 

  

equity 

 

Notes

 

$m 

 

$m 

 

$m 

 

$m 

 

$m 

 

$m 

  

$m 

At 31 December 2017

 

 

178

 

605

 

17

 

(257)

 

(228)

 

4,329

  

4,644

Adjustment on initial application of IFRS 9 (net of tax)

1

 

 -

 

 -

 

 -

 

 -

 

 -

 

(11)

 

(11)

Adjusted balance as at 1 January 2018

 

 

178

 

605

 

17

 

(257)

 

(228)

 

4,318

 

4,633

Attributable profitA

 

 

-

 

-

 

-

 

-

 

-

 

274

  

274

Other comprehensive incomeA

 

 

-

 

-

 

-

 

-

 

(55)

 

 -

  

(55)

Equity dividends paid

 

 

-

 

-

 

-

 

-

 

-

 

(198)

  

(198)

Share-based payments recognised

 

 

-

 

-

 

-

 

-

 

-

 

18

  

18

Purchase of own sharesC