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FRESH TASTE. FRESH APPROACH.
Greencore Group plc | Annual Report and Financial Statements 2023
Greencore Group plc | Annual Report and Financial Statements 2023
Greencore Group plc Annual Report and Financial Statements 2023
About us
Greencore Group plc is a
leading manufacturer of
convenience foods. We are
proud to supply a wide range
of chilled, frozen and ambient
foods to some of the most
successful retail and food
service customers in the UK.
1
114
122
123
124
125
126
128
In this report
Strategic Report
Directors’ Report
Financial Statements
About us
Financial highlights
At a glance
Our strategic framework
Our business model
Chair’s statement
Chief Executive’s review
Market trends
Strategy
Sustainability
Climate transition – Task force on Climate-
related Financial Disclosures (‘TCFD’)
Our Key Performance Indicators
Operating and financial review
Risks and risk management
Group Executive Team
IFC
1
2
4
6
8
12
16
18
22
32
40
44
49
59
Chair’s introduction to
corporate governance
Board of Directors
Board leadership, culture and
company purpose
Board activities and engagement
with stakeholders
Division of responsibilities
Composition, succession and evaluation
Report of the Nomination and
Governance Committee
Report of the Audit and Risk Committee
Report on Directors’ Remuneration
Report of the Sustainability Committee
Other statutory disclosures
Statement of Directors’ Responsibilities
60
62
64
66
74
76
78
82
88
107
108
113
Independent Auditor’s Report
Group Income Statement
Group Statement of
Comprehensive Income
Group Statement of Financial Position
Group Statement of Cash Flows
Group Statement of Changes in Equity
Notes to the Group Financial Statements
Company Statement of Financial Position
171
Company Statement of Changes in Equity 172
Notes to the Company
Financial Statements
Other Information
Alternative Performance Measures
Other information
173
177
182
Our FY23 Annual Report and Financial Statements (this ‘Annual Report’) can be downloaded as a PDF from this location:
https://www.greencore.com/investor-relations/results-centre/
Financial highlights1
Revenue
Group Operating Profit
Basic Earnings per Share (Basic ‘EPS’)
£1,913.7m
(Reported: +10.0%) (Pro Forma: +13.5%)
£66.0m
(FY22: £52.1m)
7.2p
(FY22: 6.2p)
Adjusted Operating Profit
Adjusted Earnings per Share (Adjusted ‘EPS’)
Free Cash Flow
£76.3m
(FY22: £72.2m)
9.3p
(FY22: 9.2p)
£56.8m
(FY22: £58.7m)
Profit before taxation
Return on Invested Capital (‘ROIC’)
Adjusted Profit Before Tax
£45.2m
(FY22: £39.8m)
8.9%
(FY22: 8.4%)
£58.1m
(FY22: £59.8m)
1. The Group uses Alternative Performance
Measures (‘APMs’) which are non-
International Financial Reporting
Standards (‘IFRS’) measures to monitor
the performance of its operations and of
the Group as a whole. These APMs along
with their definitions and reconciliations
to IFRS measures are provided in the
APMs section on page 177.
Certain statements made in this Annual Report are forward-looking. These represent expectations for the Group’s business, and involve
known and unknown risks and uncertainties, many of which are beyond the Group’s control. The Group has based these forward-looking
statements on current expectations and projections about future events based on information currently available to the Group. These
forward-looking statements include all statements that are not historical facts and may generally, but not always, be identified by the use
of words such as ‘will’, ‘aims’, ‘achieves’, ‘anticipates’, ‘continue’, ‘could’, ‘develop’, ‘should’, ‘expects’, ‘is expected to’, ‘may’, ‘maintain’, ‘grow’,
‘estimates’, ‘ensure’, ‘believes’, ‘intends’, ‘projects’, ‘sustain’, ‘targets’, or the negative thereof, or similar future or conditional expressions.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that
may or may not occur in the future and reflect the Group’s current expectations and assumptions as to such future events and circumstances
that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those
expressed or implied by forward-looking statements. There may be risks and uncertainties that the Group is unable to predict at this time
or that the Group currently does not expect to have a material adverse effect on its business. Accordingly, no assurance can be given that
any particular expectation will be met and you should not place undue reliance on any forward-looking statements. These forward-looking
statements are made as of the date of this Annual Report. The Group expressly disclaims any obligation to publicly update or review these
forward-looking statements other than as required by law.
Strategic Report | Directors’ Report | Financial Statements | Other Information 2
Greencore Group plc Annual Report and Financial Statements 2023
At a glance
WHO
WE
ARE
Supplying the UK market with high
quality convenience foods
Our customers
We supply all of the major supermarkets in the UK. We also supply convenience and travel
retail outlets, discounters, coffee shops, foodservice and other retailers. Some of our principal
customers include:
3
What we do and where we operate
Manufacturing
We operate 16 world class manufacturing sites, comprising
of eight sandwich units, five chilled ready meal units, three
salad units, two sushi units, two chilled soup and sauces
units, one chilled quiche unit, one ambient cooking sauce
and pickles unit and one Yorkshire Pudding unit.
Distribution
We have built a strong Direct to Store distribution operation
comprising over 645 vehicles, three regional distribution
centres and 14 transport hubs.
Corporate
head office
Locations
Corporate head office
Manufacturing sites
Distribution centres
Manufacturing sites
16
Transport hubs
Corporate services centre
Distribution centres
and transport hubs
17
Distribution vehicles
645+
Our year in numbers –
items produced in FY23
Chilled ready meals
132m
Jars of cooking sauces,
dips and pickles
245m
Chilled soups and sauces
45m
Sandwiches and other
food to go items
779m
In FY22, we produced 127m chilled ready meals; 249m
jars of cooking sauces, dips and pickles; 47m chilled
soups and sauces; and 795m sandwiches and other
food to go items. FY22 was a 53 week period. The items
produced in FY23 relate to the 52 week period from
1 October 2022 to 29 September 2023.
Strategic Report | Directors’ Report | Financial Statements | Other Information 4
Greencore Group plc Annual Report and Financial Statements 2023
Our strategic framework
HOW IT ALL
CONNECTS
We are defined by…
Our purpose
Our purpose, making every day taste better,
defines and inspires us.
Having a clear purpose and using it as a
guiding principle to the way we operate
supports the direction we choose to take,
inspires our strategy and how we deliver
against it.
It benefits our people, our customers,
our suppliers, our consumers, our local
communities, the wider environment
and ultimately our shareholders.
Read more on page 64
Which guides…
Our strategy
We are one of the UK’s leading convenience
food producers. We have built this position
through long-term partnerships with major
UK retailers in attractive product categories.
Our strategy is focused on accelerating
financial returns and delivering growth from
these partnerships, across three horizons:
Horizon 1: Stabilise (FY23)
Stabilise the business, operationally
and financially, to provide a platform for
future development.
Horizon 2: Rebuild (FY24 to FY26)
Rebuild our profitability and returns, through
choices on where we play, strengthening
the model for how we win, and investing
in foundational, enterprise-wide enablers.
Horizon 3: Grow (FY24 to FY28)
Grow the business over time, by broadening
our portfolio through selective and disciplined
investment.
Read more on page 18
And we do that by following…
The Greencore Way
The Greencore Way is built on four elements:
People at the Core
By embedding a safety
culture, providing inspiring
leadership and having
engaged and effective
teams, we ensure that
people are at the core
of our business.
Great Food
Ensuring food safety,
leading on taste and
winning on quality
are all essential to our
continued success.
Sustainability
Sustainability underpins all
areas of our business from
Sourcing with Integrity
to Making with Care and
Feeding with Pride.
Excellence
We strive for excellence
in everything we do
by building capability,
driving efficiency and
delivering value for all
our stakeholders.
5
Bringing to life sustainability
through our…
Better Future Plan
Our Better Future Plan is built
around three pillars: Sourcing
with Integrity; Making with Care;
and Feeding with Pride.
Each pillar contains a set of priorities —
with aspirational goals supported by
milestone targets which relate to the
most pressing sustainability risks and
opportunities facing us as a business and
the food system within which we operate.
Sourcing with Integrity
By 2030, we will source all our priority
ingredients from a sustainable and
fair supply chain.
Mapping our plans to the following
UN Sustainable Development Goals
Making with Care
By 2040, we will operate (Scope 1 and 2)
with net zero emissions.
Mapping our plans to the following
UN Sustainable Development Goals
Feeding with Pride
By 2030, we will have increased our
positive impact on society through
our products.
Mapping our plans to the following
UN Sustainable Development Goals
Read more on page 22
Strategic Report | Directors’ Report | Financial Statements | Other Information 6
Greencore Group plc Annual Report and Financial Statements 2023
Our business model
DELIVERING
BETTER RESULTS
Sourcing
with Integrity
We are committed to ensuring that the raw
materials we use in the products we supply
to our customers are sourced sustainably
and responsibly.
Subject matter experts sit within our Technical team
and work with our Purchasing and Sustainability teams
to reduce complexity and risk within the supply chain.
We source our raw materials from local suppliers where
feasible, and we have also developed long-term strategic
partnerships to support effective, sustainable and
transparent supply chains.
Number of ingredient suppliers we source from
c.300
Percentage of ingredients sourced from
UK-based suppliers
c.90%
Our inputs
People
c.13,600
Ingredients
c.3,800
Manufacturing sites
16
Distribution fleet
645+
Invested capital
c.£700m
Managing our risks
We recognise that effective risk management is
critical to our success. An Enterprise Risk Management
(‘ERM’) framework supports informed decision-making
and ensures that risks are understood, evaluated,
and mitigated. The Group’s ERM framework combines
both a top-down and bottom-up approach to risk
management, with structured, systematic oversight
provided by the Risk Oversight Committee and Audit
and Risk Committee, and supported by refreshed and
standardised risk management methodologies.
Read more on page 49
7
Stakeholder value creation
For each of our stakeholders, we aim to add value by:
Shareholders
Creating sustainable value through
disciplined capital allocation.
Suppliers
Partnering with suppliers to achieve
goals and drive sustainable growth.
Consumers
Addressing key consumer demand
drivers through food innovation.
See Operating and financial review on page 44
See Sustainability on page 25
See Market trends on page 16
Customers
Providing best-in-class customer
outcomes and satisfaction.
See Strategy on pages 18 to 21
Colleagues
Investing in career development to
shape career opportunities to engage,
reward and retain our people.
Community
Creating stronger and healthier
communities through education
and food-focused engagement.
See People at the Core on page 30
See Sustainability on page 28
Making with Care
Feeding with Pride
Our great food is underpinned by
our dedication to food safety, taste
and quality.
We source and prepare our great food to the highest
food safety standards every day. Our customers and their
consumers can trust what we make. We work relentlessly
to ensure that we reach industry-leading food quality
standards in everything we do. We also leverage our
expertise in food manufacturing and assembly to provide
‘ready to eat’ products using processes that are hand-
crafted and in environments that are categorised as
‘high care’.
Number of different products produced by Greencore
c.1,600
Internal and external audits across all sites during the year
c.22,000
We design products with taste, freshness,
health and affordability in mind, and ensure
that they are packaged and distributed as
efficiently and responsibly as possible.
We work closely with our customers to innovate and
improve recipes and technologies that add value for
them. This is done across a range of product categories
including sandwiches, salads, sushi, chilled snacks,
chilled ready meals, chilled soups and sauces, chilled
quiche, ambient sauces and pickles, and frozen Yorkshire
Puddings. We distribute through our chilled distribution
network to customers’ distribution centres and to selected
food outlets through our dedicated fleet of over 645
Direct to Store vehicles.
Number of daily deliveries by our Direct to Store vehicles
10,400+
Sandwiches and other food to go items produced in FY23
779m
Strategic Report | Directors’ Report | Financial Statements | Other Information 8
Greencore Group plc Annual Report and Financial Statements 2023
Chair’s statement1
Leslie Van
de Walle
“The pressure from inflationary
increases across commodity
and other operating costs in
the business were proactively
addressed by implementing a
number of measures to improve
Group profitability.”
This is my first annual statement as Chair of
Greencore, and my time to date has reinforced
my view of the Group’s excellent fundamentals
and its significant potential for growth.
Our leading market positions in attractive
food categories, deep relationships and long-
term partnerships with leading UK retailers
and well-invested facilities, combined with
a robust balance sheet, create an excellent
platform for growth.
1. The Group uses Alternative Performance Measures (‘APMs’) which
are non-International Financial Reporting Standards (‘IFRS’) measures
to monitor the performance of its operations and of the Group as a
whole. These APMs along with their definitions and reconciliations to
IFRS measures are provided in the APMs section on page 177.
9
Reported Revenue Growth
10.0%
Operating Profit Growth
26.7%
Introduction
Having demonstrated the resilience of the
business during the COVID-19 pandemic
the business is well positioned to continue
its leadership role in the convenience
food sector, but also has the opportunity
to refresh and rebuild its approach as we
continue to adapt to inflationary market
conditions.
Managing the turnaround
of the business with a refreshed team
The Group delivered year-on-year revenue
growth of 10.0%, through a combination
of volume growth, including new business
wins and price mix, while also recovering
significant levels of inflation. Revenue in
FY23 of £1,913.7m (increased 13.5% on a pro
forma basis and Adjusted Operating Profit
increased 5.7% to £76.3m (Operating Profit
increased 26.7% to £66.0m).
I want to commend our Chief Executive
Officer (‘CEO’), Dalton Philips and the entire
management team who have delivered the
strong result in FY23. In addition to Dalton
being relatively new in the CEO role, several
new senior executives have brought in
additional skillsets and insights and have been
pivotal in refreshing the Group’s business
model and strategic framework. The Group
Executive Team has applied a rigorous,
returns-based assessment approach across
all aspects of the Group’s activities including
individual products, contracts, categories
and sites. Across FY23, the application of
this approach began to bear fruit and the
operational and commercial benefits became
more evident in the second half of FY23, with
the business achieving the Group’s strategic
goal of stabilising the business (Horizon 1)
(see pages 18 to 21 for more information on
Our Strategy).
As we move into FY24, the same approach
will be applied across Horizon 2 of the
Group’s new strategic framework. We expect
this to continue to enhance the focus and
the returns profile of the Group, but also
to help mitigate the continued inflationary
pressures from increased labour, utilities
and interest costs. The goal of Horizon 2 is
to create a more focused, higher return and
cash-generative growth platform. The Board
fully supports the approach adopted which
will continue to improve the fundamentals of
the business.
Inflation recovery
The pressure from inflationary increases
across commodity and other operating costs
in the business were proactively addressed
by implementing a number of measures to
improve Group profitability.
Inflation incurred was largely recovered
through a combination of pass-through of
input costs and other mechanisms including
product and range reformulations, and
alternative sourcing. This was achieved while
continuing to innovate for our customers
through the launch of approximately 400
new or reformulated products, within the
Group’s total stock keeping unit (‘SKU’) range
of more than 1,600 products.
A refreshed focus on contract returns and
capacity management was deployed during
the year, to recover margin from lower-value
business and contract extensions agreed
during COVID-19. We also proactively exited
a number of contracts and product lines
which were delivering sub-optimal returns,
as we focused on maximising returns and
manufacturing capacity utilisation. These
decisions are important in both freeing up
capacity across the business which can be
re-purposed more profitably, and in driving
the overall profitability of the Group.
The Group completed the Better Greencore
change programme in H2 FY23, delivering
the annualised benefits targeted of £30m.
This supported the mitigation of fixed
cost and overhead inflation. As part of
this, the Group operating cost structure
was reset, through a realignment of the
organisational structure. This unfortunately
required a reduction in headcount in March
2023, which resulted in approximately 250
colleagues leaving the business, in addition
to a further 100 vacant roles being removed
from the structure. I want to acknowledge
the contribution and commitment made
by these colleagues in building Greencore
over the years and we wish all our former
colleagues well for the future.
Cash flow and balance sheet
During the year, we have continued to
successfully manage the Free Cash Flow
generated by the business, enabling us
to reduce Net Debt (Pre-IFRS 16 Leases)
to £154m from £180m in FY22, with the
leverage covenant at 1.2x as at the year end.
The Net Debt position benefited from the
sale of the edible oils business, Trilby Trading
Limited. This disposal allows us to increase
our focus on the convenience food market.
In FY22, the Group announced plans to
return £50m to shareholders over the
following two years. Following completion of
our most recent share buyback programme
during FY23, the Group has now returned
over £35m to shareholders and aims to
complete the value return programme by
March 2024. We retain the ongoing flexibility
to return value in the form of buyback,
dividends or both and will continue to
regularly assess our capital returns policy.
Strategic Report | Directors’ Report | Financial Statements | Other Information 10
Greencore Group plc Annual Report and Financial Statements 2023
Chair’s statement continued
“Our colleagues have
worked tirelessly with
both our customers and
suppliers to maintain
outstanding operational
service levels.”
Customers, colleagues and
service levels
Our colleagues have worked tirelessly with
both our customers and suppliers to maintain
outstanding operational service levels.
We have continued to achieve excellent
customer service levels, which is particularly
pleasing given the unprecedented input costs
inflation experienced.
Stakeholder engagement
In order to understand their expectations
and concerns, I met with a number of
our major institutional investors. These
interactions have remained insightful and
instructive and have provided valuable
feedback for the whole Board. Further details
on our engagement with stakeholders is set
out at pages 68 to 73.
Board changes and corporate
governance
During the year, we announced that
Catherine Gubbins will be joining the Group
as Executive Director and Chief Financial
Officer (‘CFO’) with effect from early 2024.
Catherine has a proven track record as CFO,
and we believe her depth of experience will
be of significant benefit to the Group.
11
This appointment follows the departure
of Emma Hynes who stepped down as
Executive Director and CFO in May 2023.
Emma made a significant contribution to the
evolution of the Group and on behalf of the
Board, I would like to extend our appreciation
to her. To ensure a smooth transition,
Jonathan Solesbury has assumed the role of
Interim CFO during the transition period.
FY23 saw the refreshment of the Board as it
continues to develop to reflect the current
and future needs of the Group. Having joined
the Board in December 2022 as independent
Non-Executive Director and Chair Designate,
I became Board Chair following the
retirement of Gary Kennedy on conclusion
of the AGM in January 2023. All of us in
Greencore were deeply saddened by the
passing of Gary, shortly after his retirement
from the Board. Personally, it was a great
pleasure to work with Gary, albeit briefly.
Gary brought great passion, generosity, and
dedication to the Group during his tenure
and will remain greatly missed.
In February 2023, we were very pleased to
welcome Alastair Murray as a Non-Executive
Director and as Chair of the Audit and Risk
Committee, and in April 2023, Harshitkumar
(Hetal) Shah joined the Board as Non-
Executive Director and as a member of the
Audit and Risk Committee. Both Alastair and
Hetal bring strong financial expertise as well
as extensive food industry experience to
the Board. Helen Weir and Paul Drechsler
both retired from the Board during the year.
They took with them the thanks of the Board
for their service to Greencore and our best
wishes for the future. As a result of these
changes, the Committee membership was
also refreshed. In November 2023, John
Amaechi and Sly Bailey advised the Board
that they would not seek re-election at the
2024 AGM. I would like to thank both John
and Sly for their insightful and valuable
contributions to the Board. Ensuring our
Board has the diverse skills and experience
needed to support the development of the
Group will remain a priority for me during
FY24 and a key element of overseeing a
high-functioning Board. Further details on
Board and Committee refreshment can be
found on pages 78 to 81.
Understanding and taking into account
the significance and importance of each
component of environmental, social and
governance related issues to the
business of the Company, the Board formed
a new Sustainability Committee. Further
information on the work undertaken in this
area can be found on page 107.
Conclusion
I would like to express the appreciation of
the Board to all our colleagues for their
contribution throughout the year. The
Group’s strong performance and strategic
development was achieved thanks to
the continued focus, commitment and
innovation of the Group’s 13,600 colleagues,
and the clear leadership and dedication of
our management team.
Outlook
The Group continues to focus on improving
profitability and is investing in a number of
initiatives focused on both optimising our
network and our IT infrastructure, to give us
the platform for future growth. Our stronger
balance sheet provides the financial flexibility
to underpin this growth. We are pleased
with the start to the year and although it’s
early days, the Group remains confident in
delivering FY24 within the range of current
market expectations.
Leslie Van de Walle
Board Chair
27 November 2023
Strategic Report | Directors’ Report | Financial Statements | Other Information 12
Greencore Group plc Annual Report and Financial Statements 2023
Chief Executive’s review 1
Dalton
Philips
“We have delivered a positive
performance in FY23, with
revenue increasing to £1,913.7m,
growth of 10% on reported
revenue and 13.5% on a pro forma
basis and Adjusted Operating
Profit having increased 5.7%
to £76.3m (Operating Profit
increased 26.7% to £66.0m).”
Our Greencore colleagues have
responded brilliantly to the challenges
we have faced this year, they have once
again demonstrated the exceptional
quality of the team. Their resilience,
drive and determination has allowed
us to build a strong platform to deliver
future growth and make progress on our
longer-term strategic objectives.
1. The Group uses Alternative Performance Measures (‘APMs’) which
are non-International Financial Reporting Standards (‘IFRS’) measures
to monitor the performance of its operations and of the Group as a
whole. These APMs along with their definitions and reconciliations to
IFRS measures are provided in the APMs section on page 177.
13
BUILDING A STRONG
PLATFORM TO DELIVER
FUTURE GROWTH
Introduction
I would like to thank our entire team for their
continued commitment during FY23 and
beyond, as well as thanking our suppliers
and customers, with whom we work in
partnership. It has been another turbulent
year in the macro-economic environment,
and it would not have been possible to
achieve what we have in FY23 without
their continued support. I truly believe that
through the challenges of the last few years,
Greencore has become even more resilient
and is now a more robust business that is
better equipped to deliver future growth.
Our strong financial position has allowed
continued focus on our commitment
to return £50m to shareholders by May
2024, recently launching our fourth share
buyback programme since May 2022. The
most recent programme commenced
on 10 October 2023 and will end no later
than 30 March 2024 and will conclude
the £50m commitment. With our strong
balance sheet and continued optimism
around our business prospects, we retain
the ongoing flexibility to return value in the
form of buybacks, dividends or both and will
continue to assess our capital returns policy.
In what has been the first year with our new
Group Executive Team in place, I am delighted
with how the team has hit the ground running
and embedded themselves into the business.
We also welcomed Jonathan Solesbury as
Interim Chief Financial Officer (‘CFO’) in June
2023. Jonathan has provided huge value to
us through his extensive experience across
senior finance roles from both the food and
beverage industries. I want to thank Emma
Hynes who stepped down as CFO in May
2023. Emma made a significant contribution
to Greencore and supporting me when I
joined the business last year.
We were all deeply saddened at Greencore
by the passing of Gary Kennedy, our former
Board Chair, during the year. Gary brought
great zeal and commitment to his role at
Greencore and on a personal level, it was a
great pleasure to work alongside Gary. Gary
will remain greatly missed by all of us here at
Greencore and beyond.
Positive FY23 performance
We have delivered a positive performance in
FY23, with revenue increasing to £1,913.7m,
growth of 10.0% on reported revenue and
13.5% on a pro forma basis and Adjusted
Operating Profit having increased 5.7% to
£76.3m (Operating Profit increased 26.7%
to £66.0m).
There has been continued inflationary
pressure across our cost base and although
we have seen some easing as the year
progressed, the inflation recovery has
still been very significant. The team have
continued their laser focus on inflation during
FY23 and it continues to be well controlled
and mitigated through a combination of pass
through of cost increases, cost reductions,
product and range reformulations and
alternative sourcing.
Our positive FY23 performance was
underpinned by our strong financial position,
with Net Debt on a pre-IFRS 16 basis reducing
to £154m and leverage reducing to 1.2x which
is now comfortably within our medium-term
target range of between 1.0–1.5x.
During the year, a refreshed approach was
taken on contract returns and capacity
management to recover margin from
lower-value business. This led to the Group
proactively exiting a number of contracts
which were delivering sub-optimal returns,
as we continue our focus on rebuilding
profitability and returns. We increased our
focus on the convenience food market with
the sale of the edible oils business, Trilby
Trading Limited.
Revenue growth reflected the successful
recovery of cost inflation, with both Food
to Go and Other Convenience categories
growing strongly on a pro forma basis.
Volume growth in the year was positive
and our core business is well-positioned
despite challenges in the wider market, and
we outperformed the market in our key
categories.
Adjusted Operating Profit improved year-
on-year in the second half, reflecting our
continued focus on driving operational
improvements across the business
underpinned by our commitment to quality
and customer service. Across the summer,
at peak production periods, our customer
services levels remained outstanding at
99.1%, with customer services levels at 98.5%
across the whole of FY23.
Strategic progress
We made progress on resetting our strategy
during the year. We have set clear goals
across our three horizon framework; firstly
to stabilise the business (achieved in FY23),
secondly to rebuild our profitability and
returns and thirdly to further develop our
strong growth platform. While we have made
good strides in stabilising the business in
FY23, there is more work to do to unlock our
full potential. Our three horizons framework
will guide the prioritisation and sequencing
of our long-term strategic objectives.
We recognise that returns on capital are
variable across the Group and in aggregate
are not yet where they need to be.
Through FY24 and beyond, we will address
underperforming areas of the business to
ensure we rebuild profitability and returns.
We also need to reinvigorate our growth
trajectory. We expect to achieve this through
a combination of continuing to strengthen
and develop our partnerships with existing
customers, and by diversifying our portfolio,
category and channel exposure.
We need to continue to work closely with
our customers to ensure we are jointly
making the appropriate decisions on
simplification and targeted innovation.
Strategic Report | Directors’ Report | Financial Statements | Other Information 14
Greencore Group plc Annual Report and Financial Statements 2023
Chief Executive’s review continued
There have been some great examples of
innovation this year, including the Freshly
Prepared range within M&S and Kitchen Deli
within Sainsbury’s.
Further out, investment decisions will
continue to be guided by disciplined capital
allocation and we may supplement the
Group’s organic development through
selective bolt-on M&A, which fits with our
growth strategy.
People at the Core
As I mentioned last year, the first thing that
hits you on spending any length of time at
Greencore, is the exceptional quality of the
people. We are nothing without our people
and our 13,600 colleagues are our most
valuable asset.
Nonetheless, it is imperative that we
rigorously and continuously mange our
cost base and as such, we had to make
the difficult decision to reduce headcount
by 250 as part of the realigning of the
organisation during FY23.
In parallel, we need to ensure that we are
an employer of choice, to ensure we can
attract and retain the best talent. Greencore
is already an incredibly diverse organisation,
and it is important for us to ensure that
everyone’s experience of working with us
is one of inclusion, because we know that
diversity does not work without inclusion.
We believe we can ultimately differentiate
our business through our colleagues, so it
is important to us that we create a culture
where our people can be themselves and
fulfil their potential. By focusing on inclusion
and diversity, we can make better business
decisions, informed by diverse perspectives.
We can better reflect our customer and
consumer needs, and therefore better
anticipate change and respond with agility.
A sustainable future
We are three years into our Better Future Plan
sustainability journey, but we recognise that
our progress to date has not been sufficient
to drive transformational change in all
areas. This year marked the start of the next
chapter of our sustainability improvement
programme at Greencore with the launch of
our Plan Ownership Model.
We need to deliver change at scale and
pace to reach our targets and make a
meaningful contribution to a sustainable,
more equitable food system and as such, we
have been focusing on ownership of action
and refining our priorities. The new Plan
Ownership Model was introduced in April
2023, and sees a Plan Owner within relevant
business functions take responsibility for
each element of our Better Future Plan,
from sustainable packaging and food
waste to healthy and sustainable diets
and communities.
Our Plan Owners are specialists in their areas
and already work closely with day-to-day
teams, our value chain and third parties, so
they are in the best position to drive change.
With the overall strategy workload now
shared in a partnership model between the
Sustainability team and focused specialist
Plan Owners within the business, we seek
to enable faster change, broader business
engagement with the strategy, and the
deeper embedding of sustainability within
the business.
Further ahead
We have made a positive start to FY24
in what continues to be a tough trading
environment. Our key categories remain
resilient, positioning us well for growth,
with our customers recognising the level of
service and quality that we provide.
In the near-term we know we need to remain
resolute in our approach to commercial and
operational excellence, to support improved
efficiency and help rebuild margin, whilst
developing our technology capability.
I believe that there is still huge potential to
unlock in the business. I am confident that
our strengths, which include the depth of
our relationships with our customers, the
categories in which we operate, the quality
of products we produce and our strong
15
“Great food is at the heart
of what we do. We recognise
that as a major player
in the UK food industry, we
have a clear responsibility
to improve food outcomes
for both consumers and
for wider society.”
financial position, will continue to support
further successful development of the
business in the longer term.
As ever, we will continue to work hard on
this in the months ahead as a team. I am also
very much looking forward to welcoming
Catherine Gubbins, who joins us as Executive
Director and CFO in 2024.
Finally, I would like to re-iterate my gratitude
to my colleagues, customers, suppliers,
shareholders and other stakeholders for
their continued support in FY23. We are
confident for the future and excited about
the prospects for the Group.
Dalton Philips
Chief Executive Officer
27 November 2023
Read more on our Strategy on pages 18 to 21
Read more on Sustainability on pages 22 to 39
Strategic Report | Directors’ Report | Financial Statements | Other Information
16
Greencore Group plc Annual Report and Financial Statements 2023
Market trends
USING INSIGHTS
TO DRIVE
OUR BUSINESS
FORWARD
Healthy and sustainable diets
There is a growing awareness of
environmental and public health issues that is
increasing the urgency for change towards a
healthier and more sustainable way of eating,
with eating patterns that promote both
personal health and the health of the planet.
People can find health and sustainability
confusing, and they are looking to retailers
and manufacturers to support, guide and
lead the way through making our products
healthier and reducing their environmental
impact. We have a responsibility to use our
influence to drive positive system change
and improve food outcomes for consumers
and the wider society. Through our own
research and externally-published reports,
we continue to closely monitor consumer
attitudes and priorities, especially during
these turbulent times with many additional
pressures on households.
Our Healthy and Sustainable Diets Policy has
four key action areas:
• product reformulation – reformulation
to improve the nutrition and sustainability
of our existing products, whilst
maintaining quality;
• positive health – adding specific
•
ingredients (such as vitamins, minerals,
pro/prebiotics and fibre) to improve the
overall health of our products;
future of protein – rebalancing our
product ranges to use more plant-based
protein and reduce the carbon footprint
associated with animal proteins; and
• more vegetables – increasing the
vegetable content of our products and
changing the balance of our portfolio to
include more vegetable-based products.
Cost-of-living impact
Many are facing financial strain. Escalating
living costs are concerning, particularly in
terms of groceries and personal finances,
which could be indicative of the retail or
consumer goods sector, where prices
directly impact consumers’ disposable
income. Real wages in multiple UK regions
are expected to remain significantly below
pre-COVID-19 levels until 2025, and wealth
inequality is expected to increase.
According to our own research, over 65% of
respondents expressed significant distress
over the cost of living impact. We have seen
that increased food prices and economic
instability have led to higher financial stress
among individuals. Greencore research
shows that 73% of respondents are worried
about the cost of food and other groceries.
However, although consumers are facing
challenging times, our categories have been
relatively resilient – in particular Food to Go,
whereby the category has remained in high
purchase frequency with 50% buying Food
to Go items in the week to 1 October 2023
(this is +5 percentage points versus pre-
pandemic levels).
Busy lifestyles
Economic pressures are contributing to
busier lives as individuals look to take on
overtime, second jobs or ‘side hustles’ to
counteract falling discretionary income.
Scratch cooking is at a five-year low, with
convenience-based meals at a five-year
high. Low effort is important to people as
the time they spend on food preparation
declines.
Sales of Greencore’s categories are driven
predominantly by the need for convenience.
As the pace of life intensifies more people
turn to convenience foods for speed
and ease.
17
Capturing insights
and data
We have a dedicated team of insight and category
professionals reviewing multiple sources of market,
shopper, and consumer intelligence daily to unlock
key insights. We actively seek out, analyse, and
interpret relevant information to drive and activate
category strategies and innovation.
We track, measure and report on data and insights
to give us both a top-down and bottom-up view
of the themes and trends impacting our business
and categories. We are constantly striving to ensure
we partner with the best agencies, are using the
latest and quickest technology and robust methods,
including rapidly evolving artificial intelligence (‘AI’)
to ensure we stay on the pulse and have the deepest
level of consumer and market understanding across
all our sectors. We work hard to review all variables
by analysing end point-of-sale, loyalty, and panel
data to understand granular shopper behaviour
(the ‘what’) and we overlay this with our proprietary
quantitative and qualitative consumer and shopper
research to understand sentiment and motivations
(the ‘why’). We use this insight and understanding
to develop our category growth strategies with
our customers.
Treat and reward
Treat occasions continue to play an
important role across our categories. Falling
household incomes have driven changes
to the way people shop and eat as they find
ways to adapt and manage their spending.
Food is increasingly important to our
mental wellbeing and can be used to
create memories, fun, and moments to
share. Small, affordable treats in the form of
food provide momentary escapes from life’s
challenges and pace. People will trade up
and reallocate their spend to occasions they
feel are more important. These tend to be
more emotive special occasions, especially
weekends and evenings.
We are still eating out more than we were
last year (some more than others) but are
more likely to choose more premium treat
options if it is part of a wider trade down to
in-home. Product ranges that fulfil these
treat needs are important for both at home
and on-the-go occasions.
Total food to go market value
Best-in-class partner agencies
£20bn
20
Responses by consumers to bespoke
questions on our survey platform
6m
Active members of our online
consumer community
c.1,500
Reputable agency sources providing
continuous end point-of-sale, loyalty
panel and market data
Individual topics discussed with
consumers in our proprietary
community
7
40+
Source: Internal Greencore Insight team
Strategic Report | Directors’ Report | Financial Statements | Other Information 18
Greencore Group plc Annual Report and Financial Statements 2023
Strategy
OUR
STRATEGY
We are one of the UK’s leading
convenience food producers. We
have built this position through
long-term partnerships with
major UK retailers in attractive
product categories, supported
by outstanding innovation and
manufacturing capability.
Our strategy is focused on
accelerating financial returns
and delivering growth from
these partnerships, across
three horizons:
• Horizon 1: Stabilise Having faced very material
external and internal disruption in recent years,
our focus for FY23 has been on stabilising
the business. We are pleased that despite a
challenging first half, we have managed to
achieve this stabilisation and deliver year-on-
year Adjusted Operating Profit growth.
• Horizon 2: Rebuild As we enter FY24, we now
move to further rebuilding the profitability and
returns of the Group. Our goal for Horizon 2
is to create a more focused, higher return
and cash-generative growth platform. We
will do this through tight management of our
portfolio, development of commercial and
operational capability, rigorous cost control
and choiceful investment in foundational,
enterprise-wide enablers.
• Horizon 3: Grow Our business operates
in categories which are outperforming
the wider food market, and we are well-
positioned to continue to outperform
our competitors in these markets. However,
our ambition is to further strengthen our
growth trajectory over time, by broadening
our portfolio, through selective and
disciplined investment.
Horizon 1: Stabilise
FY23 – this year
Our first horizon has been focused on
stabilising our organisation and our performance.
Recent years have seen our performance and profitability
materially impacted by a series of external and internal
factors. Externally, we faced pandemic-related disruption,
impacting not just demand, but also labour markets and
our supply chain. No sooner had the acute impacts of these
challenges normalised, than we faced knock on impacts
of unprecedented levels of inflation, and a requirement to
deliver inflation recovery with our customers significantly
in excess of historical norms.
In parallel to this, we have gone through significant internal
change – the Board and Group Executive Team have been
reset, with three new Non-Executive Directors (including
our Chair) and four of the seven members of the Group
Executive Team (including our Chief Executive Officer (‘CEO’))
new in role since September 2022. We have also reorganised
from running multiple business units to running a single,
functional integrated model through our Better Greencore
change programme and have subsequently further reduced
our salaried population in the early part of FY23.
Against that backdrop of change, the Group has been
focused in recent months on stabilising both our organisation
and performance. This has been delivered through a series of
commercial, operational and cost control interventions. We
are pleased to note that the outcome of this is that despite
the challenging backdrop, and a decline in profitability in H1
FY23, we have delivered year-on-year growth in Adjusted
Operating Profit for the full year of 5.7%.
19
Where we play
Portfolio Selection and Growth
How we win
Commercial
Excellence
Operational
Excellence
Cost
Effectiveness
Enterprise-wide enablers
Technology-enabled processes
Sustainability
People at the Core
Horizon 2: Rebuild
FY24 to FY26 – the next three years
Our second horizon is focused on rebuilding
our profitability and returns.
We have a clear focus over the medium term on rebuilding our
profitability and returns, to create a more focused and scalable
growth platform. We will do this across three broad areas.
The first area is focused on where we play – and in particular,
the selection of portfolios we operate in and the strategies we
build to win in these portfolios. In FY23, we have completed
an assessment highlighting variable profitability and returns
across our portfolio. Through Horizon 2, we will be focused
on further developing outperforming categories, while for
underperforming areas we aim to either improve returns
or scaleback.
The second area is focused on how we win – this brings
together our approach to Commercial Excellence,
Operational Excellence and a rigorous commitment to
Cost Effectiveness. Collectively, this is about consistently
and systematically deploying the right people, processes
and tools to enhance how we manage every line of our
profit and loss account – from volume and revenue
management, to conversion efficiencies and fixed costs.
The third area is focused on the Group’s enterprise-wide
enablers. These are foundational elements of our success,
bringing together our commitment to putting People at the
Core of all that we do, our ambitious Sustainability Strategy
(read more on pages 22 to 39), and a focus on improving our
core enterprise-wide processes and supporting technology,
starting with material investment in FY24 to this end.
Horizon 3: Grow
FY24 to FY28 – the next five years
Our third horizon is focused on driving sustainable
growth in our business.
We will continue to pursue opportunities to leverage our existing
customer partnerships to drive further growth. However, our
ambition is to further strengthen our growth trajectory.
Our current position as one of the UK’s leading convenience food
players, and in particular our focus on food to go, leaves us well
placed to continue to outpace the wider food market. However,
many of these markets have faced headwinds in recent years. The
grocery market overall has declined by 2.7% (in volume terms) in the
52 weeks to 1 October 2023. The food to go market outperformed
this wider grocery trend, albeit still declining by 0.7%.
Some of the above trends are likely to be cyclical, impacted by
very high recent inflation and the associated negative consumer
sentiment. However, we recognise that our core categories
may not recover to historic levels of growth, while in parallel
our progress in growing share in key markets has an impact
on our scope for future growth through share gain. We are
confident in our ability to continue to outperform in our existing
markets, by deploying the model outlined above in Horizon 2.
As such, we recognise the need to evolve our portfolio over
time to include higher growth markets. This will likely require us
to diversify our category, channel and market exposure. This in
turn will inform our stance towards inorganic investment. We will
approach this in a structured and balanced way – seeking out
markets that combine growth, attractive market structures and
natural synergy with our own business, while being disciplined
with the associated capital allocation. We will also be sensitive
on the timing of execution; we cannot wait for the completion
of our Horizon 2 rebuild of profitability to begin to make growth
investments, but we also recognise that Horizon 3 must build
on the strategic flexibility created in Horizon 2, progressively
enhancing profitability and returns in our existing business.
Strategic Report | Directors’ Report | Financial Statements | Other Information 20
Greencore Group plc Annual Report and Financial Statements 2023
Strategy continued
STRATEGY
IN ACTION
Developing our people model
Over the past two years, we have delivered
significant change in our people model –
both to our organisation and to the tools and
processes that support our decision-making
and resource allocation.
We have evolved our organisation through
the Better Greencore change programme and
subsequent cost control initiatives. Following
a move from five business units to a single
functional model in FY22, we then further
restructured the business in FY23, reducing
our management and support population by
approximately 250 colleagues. The combination
of implementing the ‘one Greencore’
organisational model and the interventions we
made to control our people cost in the face of
significant inflation have driven a more unified
and sharper performance culture.
In parallel to this, we have made investments
to upgrade our HR Information System (‘HRIS’).
A core component of the people strategy is
to enable the business with high-quality data
and insight on personnel and robust people
management processes. This will be delivered
through our investment in a new core people
data solution. This has been a major focus in
FY23, and is being rolled out from Q1 FY24.
This system will better enable the Group to
manage labour availability, prioritise resourcing
allocation, control people costs and enable
process efficiencies.
Delivering Operational Excellence
In recent years, our Greencore Manufacturing
Excellence model has provided a foundation
for efficiency and cost improvement initiatives.
However, as we have grappled with significantly
higher inflation in recent years, it has become
even more essential to drive efficiency and tightly
manage costs in a structured and disciplined way.
In FY23, under a new operations leadership
team, we reset our Operational Excellence
agenda. This involved more systematically
diagnosing opportunities to improve efficiencies
or processes, building capability to capture those
opportunities and more rigorously tracking
project execution and value realisation. We are in
the process of developing and rolling out a pillar-
based model to progressively build capability
across each area of our operations. This means
that across all areas, from supply chain planning
and food safety to production and equipment
maintenance, we are assessing our capability
against a world-class benchmark and building
improvement plans to develop and enhance that
capability over time.
We made some important first steps in FY23
through deep diagnostics of our manufacturing
processes in multiple production sites. In parallel,
a standardised assessment was conducted of
Overall Equipment Effectiveness (‘OEE’) – a
measure of asset utilisation that enables us to
unlock trapped capacity.
In the coming years, we will continue to embed
this new model and ways of working and build
capability to deliver sustainable improvement.
2121
Winning with customers
Over the last year, we have worked
collaboratively with customers to ensure
their ranges are working hard for them
and for us, rationalising products where
appropriate, and using strategic innovation
to support growth. We have also engaged
constructively to ensure we are being fairly
rewarded for the great food we produce.
Through that work, we have reduced our
overall net stock keeping unit (‘SKU’) count
by 9%. This was despite modest growth
in overall volumes, meaning there was an
overall increase in volume per SKU of 10%.
This has enabled us to support service levels
and in-store availability, as well as driving
efficiency to enhance profitability.
In parallel, we advanced our innovation
agenda with c.400 new or redeveloped
products across all of our portfolios.
These launches have not only supported
our customer growth agenda, but have
also helped recover margin, with these
innovation launches on average being
higher margin than our base portfolio.
Alongside this work, we have also engaged
constructively with customers on our costs
and pricing in the context of unprecedented
inflation. We are pleased with our progress,
ensuring that inflation was either recovered
or mitigated. In a small number of cases
where this was not possible, we also
took decisions to part ways with certain
customers. While this inevitably has an
impact on volumes, we are convinced that it
is the right thing to ensure the sustainability
of the business and will underpin our
capacity for profitable growth in the future.
Investing in technology
Over the years, and like many companies of
our scale, Greencore has grown through a
combination of acquisition, divestment and
organic investment, across different customers,
categories and sites. As we have grown, there
have been limitations to the consistency in
how we developed or deployed processes and
supporting technology across the Group. This in
turn can lead to inefficiency, wasted effort and
frustration for colleagues, suppliers or customers.
We have recently launched our ‘Making Business
Easy’ programme to address this. We are aiming
to develop consistent, enterprise-wide processes,
supported by selective technology investment
and underpinned by a robust approach to our
data. This will make it easier and more efficient
for us to do business – from how we order raw
materials and how we schedule maintenance, to
how we deliver products to customers every day
and ensure we are paid on time.
We have initiated the first phase of this already, with
scoping work underway, and material investment
foreseen in FY24 to support these goals. We have
also deployed our first system investments, which
are on track, and on budget with their delivery
milestones – in Q1 of FY24, we are both upgrading
our core Enterprise Resource Planning (‘ERP’)
tools, and deploying a new HRIS. These will be
the first steps of an exciting and empowering
multi-year roadmap to make business easy.
Strategic Report | Directors’ Report | Financial Statements | Other Information 22
Greencore Group plc Annual Report and Financial Statements 2023
Sustainability
OUR BETTER
FUTURE PLAN
Great food is at the heart of what we do, and we recognise
that as one of the UK’s largest food manufacturers, we have
a responsibility to make a meaningful contribution to a
sustainable, more equitable food system.
What we eat has a substantial impact on
the health of the planet. Food systems are
responsible for a third of global greenhouse
gas emissions, as well as having a significant
impact on water, land and biodiversity. At
the same time, poor nutritional education
and the cost-of-living crisis are having an
increasingly negative impact on the health of
the nation.
By making healthy products that are
nutritious, affordable and taste great, we can
make it easier for people to make choices
that are good for their health and wellbeing,
support local communities, and reduce the
impact on the natural world by reducing
carbon and water usage, and supporting
biodiversity. Through our Sustainability
Strategy ‘Better Future Plan’, we are
committed to doing our part to ensure the
future of the planet, and the health of those
on it, is a better one.
Our Better Future Plan is made up of three
interlocking pillars: Sourcing with Integrity,
Making with Care, and Feeding with Pride.
Each pillar encompasses our environmental
and social commitments. Our climate
transition journey and the importance of
our people through ethics and inclusion and
diversity reach across all three pillars, making
10 focus areas. These topics are supported
by four programme foundations that uphold
the strategy and are fundamental to our
transformation process: governance, risk
management, transparency, and embedding.
Areas of focus:
Responsible sourcing
Human rights
Net zero (energy)
Food waste
Communities
Healthy and sustainable diets
Sustainable packaging
Ethics and modern slavery
Inclusion and diversity
Climate transition
Our standalone 2023 Sustainability Report, part of our
Better Future Plan and previous reports can be found at:
https://www.greencore.com/sustainability/sustainability-hub/
“We are in a new and
exciting chapter
of sustainability at
Greencore in which
plan ownership within
business teams and
climate literacy are
essential to how we are
taking the Sustainability
Strategy forward.”
Fran Haycock
Head of Sustainability
23
These pillars, areas of focus, and foundations
are all integral to one another, and together,
guide our efforts towards planning for
a better future, the Greencore way. The
global sustainability landscape continues to
evolve at pace, and in response to this, we
will look to evolve our strategy to ensure it
is representative of the global challenges
at hand. With biodiversity, nature and water
becoming increasingly important in the
global climate conversation, we are currently
working to understand our role within
these areas and how they will feature in our
strategy going forward.
Materiality
Greencore’s disclosures are focused on the
issues most material to its business activities.
Greencore undertook a double materiality
assessment in FY22 which identified the 10
areas of focus as mentioned previously. The
details of both the process and assessment
results can be found in our Sustainability
Report 2022.
Aligning with external frameworks
Greencore aligns disclosures in its
standalone Sustainability Report to
international non-financial reporting
standards, including the Global Reporting
Initiative (‘GRI’). In light of the fact that
Greencore is headquartered in Ireland,
particular attention must be paid to
European regulation and how this may
impact us. We are preparing to align with
a number of key standards, such as the
Transition Plan Taskforce framework,
Corporate Sustainability Reporting Directive
(‘CSRD’), and the Taskforce on Nature-
related Financial Disclosures (‘TNFD’). We
are also anticipating regulatory shifts in UK
sustainability requirements and will monitor
this closely going forward.
Strategic Pillars
Sourcing
with integrity
By 2030, we will source
our priority ingredients
from a sustainable and
fair supply chain
Making
with care
By 2040, we will operate (Scope
1 and 2) with net zero emissions
Feeding
with pride
By 2030, we will have increased
our positive impact on society
through our products
Responsible sourcing
We will source sustainable ingredients
with transparency by holding ourselves
and our suppliers to the same high
standards of integrity.
Human rights
We respect the human rights of
everyone who works for, and with us.
Net zero
We will use less to make more by
becoming more resource-efficient
and operating a net zero business.
Food waste
We will halve food waste within our
operations and work with others to
minimise waste in our supply chains.
Communities
We will invest in our local communities
by working to alleviate food poverty
and providing economic opportunity.
Healthy and sustainable diets
We will design products with health,
affordability and sustainability in
mind; by identifying where the
best opportunities are to meet all
three requirements, while not
compromising on taste.
Sustainable packaging
We will ensure our packaging has the
lowest planetary impact by making
it easier to recycle and eliminating
single-use plastic.
Climate transition
People at the Core
Governance
Risk management
Transparency
Embedding
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Strategic Report | Directors’ Report | Financial Statements | Other Information
24 Greencore Group plc Annual Report and Financial Statements 2023
Sustainability continued
YEAR IN REVIEW
We are three years into our Better Future Plan journey, and whilst we are pleased with
progress within sourcing, we recognise that our progress to date in other topic areas
has not been sufficient. This year marked the start of the next chapter of sustainability at
Greencore, with the launch of our Plan Ownership Model and a focus on climate literacy.
During FY23, we focused on assigning
ownership of action and refined topic
priorities in order to help us to progress our
targets and make a meaningful contribution
to a sustainable, more equitable food system.
The new Plan Ownership Model was
introduced in April 2023, and sees Plan
Owners within relevant business functions
take responsibility for each element of our
Better Future Plan, from packaging and food
waste to healthy and sustainable diets and
community engagement. Our Plan Owners
are specialists in their areas, already working
closely with day-to-day teams, customers,
suppliers, and other stakeholders, so they
are in the best position to drive change
at pace and scale. They are responsible
for topic delivery within the business
environment, supported by the accountable
Group Executive Team member and the
Sustainability team to deliver agreed targets
and topic ambition. With the implementation
of the Sustainability Strategy now shared in a
partnership model between the Sustainability
team and focused specialist Plan Owners
within the business, we have enabled faster
change, broader business engagement with
the strategy, and the deeper embedding of
sustainability throughout Greencore.
In conjunction with establishing the Plan
Ownership Model, we also refined the focus
of our Better Future Plan to four priorities
that would be the business focus for the
second half of the year and into FY24. These
are energy, food waste, communities and
healthy and sustainable diets. The nature of
three of these topics sit within Making with
Care and means they are within our direct
business control and are areas we should
accelerate. Healthy and sustainable diets
has been prioritised as we recognise the
importance of this topic to support food
systems change. This year we prioritised
roadmap development in these four areas.
To support this, making sure our people are
equipped with the knowledge and skills they
need to prioritise and embed sustainability
throughout the business has been a focus
for FY23. Upskilling leads to more capable
sustainability leadership and informed
decision-making, and critically, helps our
colleagues take action to meet future
challenges in ways that create long-term value
for the business. In September 2023, we held
a full-day upskilling session for the Group
Executive Team and key functional leaders,
bringing in external specialist coaches, as
well as hearing from our value chain through
customer and supplier guest speakers. We
also held a similar session in October 2023 for
the Plan Owner group and the Sustainability
Oversight Committee (‘SOC’). Both sessions
helping us to deliver on our ambition to
drive and accelerate progress through
understanding and engagement.
We revisit our governance approach every
year, making sure we have the right voices
around the right tables, at the appropriate
frequency. This year we have enhanced
Board focus on the agenda by introducing
a Sustainability Committee of the Board
(‘SusCo’), comprised of four Non-Executive
Directors. Our Non-Executive Director,
Helen Rose chairs this meeting with our
Chief Executive Officer and Chief Operating
Officer leading the agenda, with support
from the Head of Sustainability. The
Sustainability Committee meet twice a year
to review programme performance and
ensure the agenda has the support required
to progress at the pace required.
We also refreshed our Sustainability Steering
Committee, now known as the SOC. This
is comprised of leaders from key functions
within the Group such as Finance, Risk,
Company Secretarial, Commercial, Strategy
and Technical. The SOC’s purpose is to
act as a cross-functional business advisory
group, supporting the Head of Sustainability
primarily with the programme foundations of
governance, risk management, transparency
and embedding.
Sustainability data is an industry wide
challenge and improving it will be a journey
for all businesses, including Greencore. In
the second half of this year, we put significant
focus into reviewing data quality and
supporting processes across the programme.
As part of this work, our Group Internal
Audit team completed a data audit which
provided a valuable summary of the ‘health’
of our primary Key Performance Indicators
(‘KPIs’) within each pillar. The audit report
has provided a detailed plan of action to help
guide our improvements, and this will be a
continuous process as we work to mature our
data and reporting processes, with our newly
appointed Plan Owners playing a key role.
Looking ahead
• We will continue our focus on
climate literacy across multiple
levels-with a focus on our Board,
Group Executive Team and Plan
Owner group-to ensure they have
the knowledge and confidence
to lead the business through the
climate transition.
• We will expand our work on
delivery roadmaps to all other
strategic topics. Alongside this,
there will be significant emphasis
on developing a Transparency
Roadmap to ensure we are on
track to meet the upcoming
regulatory requirements.
• An increased focus on value chain
collaboration, working in close
partnership with our suppliers
and customers to drive change.
The nature of our business means
we are significantly influenced
by our customers’ strategies and
behaviours, so it is essential we
work closely with them to achieve
our respective sustainability
ambitions.
25
Our three Executive Team sustainability leads. From left, Chief Commercial Officer, Andy Parton (sponsor of Sourcing with Integrity and Feeding with Pride pillars), Chief Operating
Officer, Lee Finney (overall sponsor of the Better Future Plan and Making with Care pillar sponsor) and Chief People Officer, Guy Dullage (sponsor of People at the Core).
Sourcing with Integrity
The way we source our ingredients is critical to our Better Future Plan, and to delivering a fairer and
more sustainable future at scale. We have a responsibility to source our ingredients in a way that
minimises our impact, and where possible drives a positive impact. It is not possible to take a ‘one size
fits all’ approach to ingredients – each individual supply chain comes with its own challenges around
biodiversity, climate change, water scarcity, deforestation and animal welfare, and we have different
levels of control over each.
growers that supply us, work to control their
use of agrochemical inputs and fertilisers
and consider the environmental impacts
of their farming practices. Our growers
demonstrate that they are meeting these
standards through independent third-party
audits conducted by accredited providers.
These schemes ensure our fresh produce
raw materials do not have unnecessary
impacts on the environments in which they
are farmed.
Responsible sourcing
We are committed to eliminating
deforestation and ecosystem conversion
in the sourcing of soy, palm oil and timber.
For palm oil ingredients within our core
operations, 99.98% are from Roundtable
on Sustainable Palm Oil (‘RSPO’) certified
sources. In addition to our core operations,
and until September 2023, we also owned
Trilby Trading Limited (‘Trilby’), which traded
in edible oils in Ireland. The majority of oils
traded by Trilby were palm oils, with c.10%
from RSPO-certified sources. The disposal
of Trilby is expected to result in the removal
of c.280,000 tonnes of carbon dioxide
equivalents (‘CO2e’) from our FY24 Scope
3 footprint. This accounts for 20% of our
total Scope 3 footprint in FY23 and a 32%
reduction in the base year. We are also
committed to 100% deforestation-free soy
by 2025, and this year we have completed
our first soy footprint alongside many of our
peers in the industry. The result of this work
is that 43% of our soy is deforestation-free
with the remaining 57% to be transitioned
in 2024 and 2025, in collaboration with our
customers and suppliers.
In fisheries, we aim to source all our wild fish
sustainably. 100% of our tuna is sourced from
pole and line fishing, Marine Stewardship
Council (‘MSC’) -certified fisheries or from
those with a Fishery Improvement Project in
place. Meanwhile, 100% of our cold-water
prawns are from MSC fisheries, 100% of our
warm-water prawns are Best Aquaculture
Practices 4 star and 100% of our wild caught
fish are sustainability sourced. This year we
also evolved our engagement with key fish
suppliers on their respective sustainability
strategies to develop a better understanding
of how we can work together to maintain
our targets as well as proactively manage
climate risk associated with the ocean.
In the field, 100% of our fresh produce raw
materials are grown in accordance with
Red Tractor (UK) or Global GAP (rest of
the world) standards for good agricultural
practice. This means that the farmers and
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Greencore Group plc Annual Report and Financial Statements 2023
Sustainability continued
We recognise that responsible sourcing is
a collaborative effort, so we are committed
to establishing strong working relationships
with our supply chain to enable this. We
set clear standards with our suppliers,
embedding these standards in our business
systems and auditing the supply chain
practices against these standards.
In the first quarter of FY23, we launched
our new Responsible Sourcing Code of
Conduct (‘Code’). This Code sets out the
behaviours, practices and standards we
expect from our suppliers to support our
Sourcing with Integrity ambition. We issued
this Code to our key top 40 partners – who
were identified by overlaying volume, spend,
climate and human rights risk factors.
Our suppliers also play a key role in
supporting us with our Scope 3 ambition.
Our total Scope 3 footprint for FY23 is
1.40 mtCO2e, a decrease on the previous
year (1.48 mtCO2e ) and an 11% reduction
in absolute emissions since the FY19 base
year. Ingredients continue to be our main
source of emissions, at 59%, up 2% from
FY22. After engaging in dialogue with
many of our suppliers this year about their
sustainability plans, we know there is sizeable
work happening to reduce their respective
environmental footprints, and we expect to
see this reflected in our footprint from FY24.
Human rights
We are committed to championing
internationally recognised human rights
standards and safeguarding the people who
work for us, with us, and who are affected by
our activities around the world.
Creating supply chains that are free from
human rights abuses is central to our
Sustainability Strategy. We recognise that
cases of child, forced and compulsory labour
are often hidden due to the complexity of
global supply chains, and that economic and
societal pressures increase the likelihood of
worker vulnerability and the risk of criminal
exploitation.
Under the UN Guiding Principles on Business
and Human Rights, companies are expected
to actively demonstrate that they do not
infringe on human rights through their
operations or business relationships. As
such, we undertake ethical risk assessments
annually of our raw materials to identify
areas within our supply chains that are most
at risk of human rights abuses, including
modern slavery. This model is based on
outputs from the Food Network for Ethical
Trade Risk Assessment Tool and is applied in
a ‘double-analysis’ approach that considers
the country of manufacture for all the foods
that we buy, including the country of origin
for the ingredients. This data is used as part
of our supplier engagement work to ensure
we focus on high-risk areas.
We work hard to ensure that everyone is
treated fairly within our global food supply
chains, and we also take direct action on
human rights abuses when we uncover
them. This requires a collaborative effort
from everyone in the food industry, which
is why we are part of a number of initiatives
including the Modern Slavery Intelligence
Network, the Food Network for Ethical
Trade, and Stronger Together, so we can
actively help prevent and disrupt human
rights abuse at its source.
For more information on our approach to
social sustainability and to read our FY22
Modern Slavery and Human Trafficking
Transparency Statement please visit
www.greencore.com. Our FY23 statement
will be published in early 2024.
Looking ahead
Responsible sourcing
• Our primary focus will be on our
2025 targets in caged-free eggs
and deforestation-free soy. To
accelerate our transition work
in both these spaces, we have
established cross-functional
business working groups, led by
our Procurement team.
• We will be learning more
about the role we can play in
supporting biodiversity, both
within the UK via our direct
operations and local sourcing,
and globally through our supply
chain.
• Success in this area means
thinking about our suppliers as
extensions of our core business,
so we will be working closely
with many of them to deeply
embed sustainability throughout
our supply chains.
Human rights
• Collaboration will form the
basis of our continued work
in this area, with engagement,
communication and training a
focus for the year ahead. The
tactics employed by criminals
to carry out exploitation are
changing at pace, so we need
to make sure our teams have
access to the latest insights,
approaches and intelligence.
• We will continue to provide
cross functional training, as well
as training across management
and strategic levels to help
address any challenges in our
supply chains. We take the key
human rights learnings from
different contexts and apply
them across our business,
which includes working in active
partnership with our customers.
27
Making with Care
Energy and water are fundamental to operations at Greencore. Reducing carbon emissions
and water use is critical to lessen the effects of climate change on the environment and meet our
2040 Scope 1 and 2 net zero commitment. Both topics have required significant focus this year.
Energy efficiency
and water use
As a leading food business, reaching net
zero will be a big undertaking, particularly
in light of our energy performance to date.
We remain committed to finding ways of
implementing solutions to achieve our
goals, with minimal disruption. Net zero for
Greencore means reducing our Scope 1
and 2 emissions to the lowest feasible level,
and then exploring additional pathways to
address remaining emissions.
Our Energy Roadmap for Scope 1 and 2 has a
three-pronged approach and we are pleased
to share the below progress highlights:
• Data and insights: Energy Savings
Opportunity Scheme (‘ESOS’) audits
covering 80% of our energy usage have
given us an improved understanding
of our energy-intensive assets, and
we are now trialling energy efficient
motors at two of our sites. We also
now have automated metering across
all Greencore’s significant supplies of
electricity, gas and water, giving us a
clear insight on our energy and water
consumption to drive our reporting and
action going forward.
• Big projects: Our approach to renewables
across the business has received
significant focus from the relevant cross-
functional teams. We are also investing in
our effluent treatment at several sites, to
reduce the impact of discharges from our
manufacturing units and locations.
• Brilliant basics: Business culture and
engagement underpins all our work to
drive transformational change, and there
will be significant emphasis placed on this
pillar in the coming year.
Since launching our targets in this space
in 2020, the business has faced significant
external and internal challenges, and we
have not made the required annual progress
against both energy and water. This has
been recognised by business leadership,
and in the last 12 months we have made
progress in both these spaces with respect
to business understanding and engagement,
roadmap planning and plan ownership.
However, due to the lead times on initiative
implementation, this work is not reflected
in this year’s performance metrics. In
FY23, our total gross Scope 1 and 2 carbon
emissions increased from the previous year
from 92,655 tonnes to 93,366 tonnes, an
increase of 0.8%, and from our base year of
89,606 tonnes, an increase of 4.2%. We are
committed to addressing this and moving to
a reduction path in FY24.
Transport and distribution is a key part of
our business, so we know we must work to
reduce the climate impact in this area. Our
Fleet Roadmap was established in April 2023
and is grounded in our own sustainability
ambitions, in addition to the latest UK
Government policy and regulation around
vehicle procurement, usage and clean air.
Up to 2026, we will continue to optimise
our existing fleet and test the viability of
electric vehicles (EVs), while staying close to
developments in alternative fuels. From 2027
to 2030, we expect to deploy approximately
25 EVs before replacing our entire 3.5t fleet
by 2035. From 2030 onwards, we will also be
focused on converting our larger HGV fleet
to alternative fuels.
Water is an essential consideration for food
businesses, and more broadly the topic
has gained extra focus this year, as extreme
weather events have meant the world faces
intense drought and evolving water shortages.
This impacts Greencore directly through
our operations in water-stressed areas in the
UK, and indirectly through our supply chain,
particularly in raw material groups such as
produce and dairy where it is sourced from
water challenged areas in Europe and further
afield. To support our focus on this topic, we
have assigned a business leader from our
Environment team to lead the creation of
our Water Roadmap, which will support our
broader net zero ambition.
Reduction from our base year in food waste
16.1%
Number of surplus meals we redistributed
in FY23 the equivalent of
1.83m
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Greencore Group plc Annual Report and Financial Statements 2023
Sustainability continued
Food waste
The food system needs to enable better
social outcomes for people, while also
limiting its impact on the planet. Nowhere
is this more relevant than food waste,
and this issue continues to receive
increased attention and scrutiny.
As a leading food business producing large
volumes of food, reducing food waste
is a top priority for Greencore. Doing so
helps us to reduce emissions, improve
global food security, and create a more
efficient and resilient business. Waste data
is used to evaluate performance and review
progress against our UN SDG Friends of
Champions 12.3 commitment1, which will
see us targeting a 50% reduction in food
waste (as measured by food waste as a
percentage of total food handled) by 2030
against a FY17 baseline year. Our baseline
year of FY17 differs from our Scope 1, 2 and 3
carbon emissions baseline year of FY19 due
to reporting in line with the food industry
collaborative programme, the UK Food
Waste Reduction Roadmap.
This year we moved food waste reporting
out of the Sustainability team and into our
Operations function, which has significantly
enhanced and developed both our data
quality and the associated reporting
processes. We have also now developed
a five-year Food Waste Roadmap which
takes a system approach to our product
development, purchasing, manufacturing,
logistics and customer collaboration,
and ensures that a culture of food waste
prevention is firmly embedded throughout
the business.
In FY23, our food waste, measured as a
percentage of food handled, was 7.99%. This
is a decrease from last year’s performance
at 8.48%, primarily due to the Group’s
continued focus on simplification of
products, as well as improvements in data
and reporting. To date, we have achieved a
1.53% reduction from our base year (FY17) in
food waste as an overall percentage of food
handled, and 16.1% of the 50% reduction
target set for 2030.
Communities
Our business depends on the communities
in which we operate. We can only be as
healthy and sustainable as they are, so we
see it as our responsibility to actively engage
with and support our local communities
however we can.
Communities was identified as one of
four sustainability priorities for this year
and into FY24. For Greencore, supporting
our communities starts with food. Having
made successful strides in food surplus
redistribution in recent years, we are now
focused on developing three additional
support channels within our Communities
Roadmap where we believe we can have the
most impact: food education, volunteering
and fundraising. This is in response to
the growing and changing needs of
our communities, and internal work to
understand how we can provide additional
avenues of support.
Although we are looking to evolve our
support beyond food surplus, food surplus
donation continues to be a central focus
for our community engagement efforts.
Greencore strives to minimise food
waste in our operations, but sometimes
it is unavoidable, so we are committed to
ensuring we maximise the social benefit of
the food. We work with a number of food
redistribution organisations – including
FareShare, The Felix Project, The Bread and
Butter Thing, and the Trussell Trust – in order
to ensure our food surplus reaches those
who need it. Through these partnerships
we can redistribute short shelf life, chilled,
frozen, and bulk products, as well as surplus
from new product trials where feasible. In
FY23, we redistributed the equivalent of
1.83m meals.
We are looking forward to seeing our
Communities Roadmap come to life with a
fresh focus on what we can do beyond our
well-established food surplus channel.
1. https://champions123.org/
Looking ahead
• We are committed to upskilling
our teams across the business
to ensure we all have the
knowledge to deliver our net
zero Scope 1 and 2 ambition,
and work toward both designing
and deploying a detailed
transition plan to support our
progress.
• We recognise the need to
reduce our reliance on natural
gas, explore renewable energy
generation, and deliver heat
recovery from equipment such
as refrigeration plants. We have
more work to do to develop
Greencore’s approach to
addressing the carbon gap, and
the role that carbon offsetting
will play in this.
29
Feeding with Pride
Food is what we do, and it is vital that we do it responsibly. We have a real opportunity – and a
responsibility – to drive positive change in the industry. Shifting our current food system to one
centred on more sustainable diets is critical if we are to ensure the health of people and planet.
Healthy and
sustainable diets
What we eat and the way we eat is
inextricably linked to health, climate and
social outcomes, so we acknowledge the
role our products play in delivering critical
food system change. Healthy and sustainable
diets has continued to be a key focus
within the Better Future Plan. Under clear
ownership from our Commercial function,
we now have a high-level delivery roadmap
through to 2030 which we are continuing to
refine as we look to deploy the Group plan at
product portfolio level.
Animal protein accounts for 70% of our
ingredients section within our Scope 3
footprint, and that will require us to think
differently about animal protein use going
forward. The principal way Greencore can
rebalance protein is not solely through
increasing sales of plant-based products, but
by reducing, removing and replacing animal
protein content within existing products
where it is feasible to do so. In parallel with
this, for the animal protein we do use, we
will be working closely with key suppliers
to ensure a reduced environmental impact.
Both sides of our value chain will play a
key role in helping us to understand the
best way to approach animal protein use
going forward, as well as drive an ambition
to include more plants. Being an own-
brand manufacturer producing products
on behalf of our customers, it is imperative
that we work closely with them to deliver
shared goals in relation to better health and
planetary outcomes.
Product footprinting is central to our work
in this space. This year we progressed our
partnership with Mondra and became a
formal member of the BRC Mondra Coalition
group, alongside many of our key retailer
partners. The Mondra software allows us
to create a formulation footprint for each
individual product, and then creates a
‘digital twin’ of that product, allowing us to
experiment with different ingredients and
formulations to see the potential impacts
of different recipes. We are looking forward
to using this tool which will provide our
food teams with the insight they need to
•
make informed recipe decisions, designing
products with taste, quality, and sustainability
at the forefront.
Sustainable packaging
Consumers increasingly expect retailers
and manufacturers to take bold action on
packaging, so it is up to us to find solutions in
which performance, cost and sustainability
can work together.
Our packaging policy defines a ‘less and
better’ roadmap made up of three focus
areas: remove, reduce and recycle. We are
working hard to change the way we package
our products, reviewing our materials and
production processes to ensure we avoid
a linear ‘take-make-dispose’ model and
instead support enhanced recyclability.
We are continuing to explore simplified
materials and lightweighted pack formats
to encourage effective recycling, as well
as ways to reduce food waste through
extended life processing techniques and
pack constructions.
This year, we have made project-led
improvements across all our product
categories:
• within our grab bag format, we are now
using a recyclable substrate with a varnish
that adds to the value perception of these
premium products and removes 60 tonnes
of material annually from this range;
• within ready meals, we launched our
pioneering ‘Tray to Tray’ initiative, which
enables us to produce ready meal trays
directly from the waste of other ready
meal trays collected in Europe. This means
that trays produced under this initiative
will be kept in the supply chain, drastically
reducing the emissions and resources
needed to produce trays from scratch; and
in sushi, we focused on plastic reduction,
investing in new machinery to support
an alternative liner-less labelling format
around our sushi packaging at one of
our key production sites. These Forest
Stewardship Council (‘FSC’) paper labels
require no plastic-based backing paper
to aid application and plastic tamper tabs
are no longer required, with an estimated
saving of over 13 million units of plastic
annually.
While data remains our biggest challenge
in quantifying our progress at Group level,
we know from delivered projects, we have
made significant progress in our packaging
ambitions this year. This has been achieved
through close supplier collaboration and
the strength of our customer relationships
working together to support sustainability
strategies.
Looking ahead
• We will be looking to deploy multiple
levers to ensure our current product
categories are fit for the future of
food, as well as ensuring our future
business strategy is informed by
our ambitions and commitments
in this space.
• Further focus on our high-level
delivery roadmap and developing a
deeper understanding of how this
agenda will impact the business
more broadly.
• Build a robust product nutritional
database and supporting tools to
enable us to report transparently
against our Healthy and Sustainable
Diets Roadmap.
• We recognise the importance
of implementing a packaging
specification system to improve our
transparency and refine the accuracy
of our Scope 3 footprint, and will look
to resolve this in the coming year.
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Greencore Group plc Annual Report and Financial Statements 2023
Sustainability continued
PEOPLE AT THE CORE
With approximately 13,600 colleagues who are critical to the success of our business, People
at the Core is at the centre of The Greencore Way. Our people strategy has three pillars –
embedding a safety culture; inspiring leadership; and engaging and effective teams.
Embedding a safety culture
The health, safety and wellbeing of our
colleagues and visitors is our top priority. We
are continually working to improve the safety
of all our working environments, and we
are committed to developing a culture that
puts physical and emotional wellbeing at the
heart of our business. Our colleagues’ health,
safety and wellbeing is critical to the success
of our business. We pursue a comprehensive
health and safety strategy which includes
priorities, action plans and performance
objectives for every area across the business.
In FY23, we concentrated our focus on
a number of specific areas. We have
introduced a camera and telematics solution,
Webfleet, to our commercial fleet, which
allows driver behaviours to be monitored and
reported via a central dashboard. We have
also developed a new standardised approach
to risk assessment around manual handling
equipment, covering forklift, powered pallet
and pump trucks. In addition to this, we have
also set up a working group to develop new
electrical standards and procedures.
Overall, our Reportable Accident Frequency
Rate (‘RAFR’) has shown an improvement
from 0.33 in FY22 to 0.26 (per 100,000
hours) in FY23. We are now looking ahead to
the creation of our Safety Roadmap, which
aims to maintain excellence in this area
through a blend of continuous improvement
tools and training.
Inspiring leadership
We are continuing to build a culture that
enables our people to thrive by embracing
difference, building the capability of
our leaders, and harnessing the power
of a diverse workforce that represents
our customers and consumers. We can
achieve this by equipping our leaders with
knowledge, tools, and confidence to ensure
fair selection remains an important facet of
our Inclusion and Diversity Strategy.
Engaging and effective teams
During FY23 we carried out a Pulse
Engagement Survey survey across five key
sites and all central functions to ask colleagues
to share their thoughts on how we have
progressed our engagement action plans
since the last People at the Core survey was
completed in October 2022. We are pleased
to report progress in almost all areas. Our
overall sustainable engagement scores
have gone up from 74% to 76% for these
key sites and central functions. We also saw
a significant improvement on the topics
of communication, senior leadership and
colleagues saying they would recommend
Greencore as a place to work. For areas of
improvement, colleagues told us they are keen
to see us do more to work as one team and
to help them progress their careers with at
Greencore. Our next full People at the Core
engagement survey will take place in summer
2024.
Inclusion and diversity
Greencore is a diverse organisation, and it is
important for us to ensure that everyone’s
experience of working with us is one of
inclusion, because we know that diversity
doesn’t work without inclusion.
We believe we can ultimately differentiate
our business through our colleagues, so it
is important to us that we create a culture
where our people can be themselves and
fulfil their potential. By focusing on inclusion
and diversity, we can make better business
decisions informed by diverse perspectives.
We can better reflect our customer and
consumer needs, and therefore better
anticipate change and respond with agility.
And we can rely on a capable, cohesive
colleague base, which feels valued and
motivated to progress and drive our
business.
Our Inclusion and Diversity Strategy sets
our agenda. Our action plan continues to
focus on being inclusive in our approach to
leadership, providing a voice for colleagues,
working to attract diverse perspectives,
creating more opportunities for people to
fulfil their potential, and being transparent in
our approach to inclusion and diversity.
Over the last 12 months we have successfully
expanded the reach of our reverse mentoring
programme in partnership with IGD, elevating
colleague voices and helping our leaders
understand the barriers that underrepresented
groups face at work. This year, as part of our
deep dive on increasing representation of
women, we have drawn on our colleague
perspectives to better inform our approach
to attracting, enabling, and retaining female
talent, which has resulted in the introduction
of new approaches and policies such as a
Menopause Policy to support colleagues.
This year we invested in building a new
programme into our Grow with Greencore
offer, designed to provide our hiring
managers with a greater understanding of
how we ensure a fair and consistent selection
process, understand and manage bias,
promote balance in our hiring decisions, and
deliver better experiences for candidates.
We have committed to train all our hiring
line managers in this important topic in the
coming years, covering approximately 800
managers. Since its launch in June 2023,
169 managers have been trained which
represents over 20% of our managers and
exceeds the target set for this period by 5%.
Gender diversity
Across the Group
Male
FY22
FY23
No. of Colleagues
60.35%
60.89%
8,282
At Board level
FY22
FY23
At Group Executive Team
level
FY22
FY23
At Group Executive Team
direct reports level (-1)
FY22
FY23
Across Group subsidiary
Boards
FY22
FY23
Male
40%
56%
Male
71%
100%
Male
56%
51%
Male
58%
73%
Female
39.55%
39.08%
5,316
Female
60%
44%
Female
29%
0%
Female
44%
49%
Female
42%
27%
31
Other/Prefer not to say
0.10%
0.03%
4
Other/Prefer not to say
0%
0%
Other/Prefer not to say
0%
0%
Other/Prefer not to say
0%
0%
Other/Prefer not to say
0%
0%
Percentage of internal hires
Percentage of female colleagues
41%
39%
Male to female ratio at Board level
56:44
At the end of the financial year, 39% of all
colleagues were female, and this remains
unchanged from FY22. Although the Group
Executive Team ratio is unbalanced, we are
looking forward to welcoming Catherine
Gubbins, our new Executive Director and
Chief Financial Officer in early 2024. The
number of female direct reports to our
Group Executive Team has increased and we
are working hard to improve this balance.
Our male-to-female percentage ratio is
56:44 at Board level, which is a balance
improvement from FY22.
During FY23, the Board was updated on the
progress made against the Group’s Inclusion
and Diversity Strategy and endorsed
inclusion initiatives taking place across
the business. These included the Group’s
investment in reverse mentoring, introducing
representation targets for our leadership
team and placing greater focus on social
inclusion through early career programmes.
The Group continues to review gender
diversity as a key metric, and we commit
to keep driving progress in this area paying
particular attention to understanding and
tackling unconscious biases.
Anti-bribery and corruption
Greencore is committed to the highest
standards of honesty and integrity. The
Group has a zero-tolerance approach
to any form of bribery or corruption. We
provide annual training on our Anti-Bribery
and Corruption Policy and our Gifts and
Hospitality Policy which are available
internally on our intranet. Bribery and
corruption risks are considered as part
of the annual Internal Audit planning
process. Our Anti-Bribery and Corruption
Policy Statement is available on
www.greencore.com.
Strategic Report | Directors’ Report | Financial Statements | Other Information 32
Greencore Group plc Annual Report and Financial Statements 2023
Task force on Climate-related Financial Disclosures (‘TCFD’)
CLIMATE
TRANSITION
Introduction
Climate change is here – the impacts of
which the world is witnessing with increasing
severity, emphasised further by the
changeable weather events during the 2023
summer season. We rely heavily on both
the climate and the natural environment
within our ingredient and packaging supply
chain, so we recognise the importance of
understanding our exposure to the specific
risks arising from climate change and
broader impacts on nature, and how they
are impacting the food system in which we
operate.
In FY23, Greencore established a new
Plan Ownership Model for sustainability,
moving delivery, accountability, and
responsibility from the Sustainability team
into the business. Albeit initially focused
on sustainability delivery, the next phase of
this model will include aligning ownership
of climate risk with our Better Future Plan
topics, ensuring integration where relevant.
We are working to continually improve our
alignment to the recommendations of the
Task force on Climate-related Financial
Disclosures (‘TCFD’) and embed climate-
related risk and opportunity management
across our business. We expect that certain
aspects of our disclosure will further develop
and evolve over time.
Summary of progress to date
To support the management of these risks
and opportunities, together with managing
our own impact on the climate, we
established science-based decarbonisation
targets, which are externally verified by
the Science Based Targets initiative (‘SBTi’).
Under this programme, we have pledged to
reduce absolute Scope 1 and 2 emissions by
46.2% by 2030 from a FY19 base year, and to
reduce Scope 3 emissions from purchased
goods and services, and upstream transport
and distribution, by 42% per tonne of
product sold by 2030, from a FY19 base year.
Our baseline Scope 3 footprint has been
determined by a third-party using carbon
factors from published average carbon
footprint data for individual raw materials.
to Store operations). Despite challenges in
the last three years to reduce our energy
footprint, we remain focused on making
progress against our Scope 1 and 2 target in
FY24.
Each summer, we complete an annual
carbon footprint analysis of Scope 1, 2 and
3 absolute and relative emissions across
our business. This data enables us to
determine more granular emissions profiles
across our product categories to inform
our strategy and risk management process
when considering risks such as exposure
to carbon pricing or business reputation
associated with our carbon intensity. Our
total Scope 3 footprint for FY23 is 1,400
MtCO2 e, a decrease on the previous year
(1,477 MtCO2 e) and an 11% reduction in
absolute emissions since the FY19 base year.
Ingredients continue to be our main source
of emissions, at 59%, up 2% from FY22 at
57%. See table on page 38 for our emissions
intensity performance.
In FY23, our total gross Scope 1 and 2
absolute emissions increased from the
previous year from 92,655 tonnes to 93,366
tonnes, an increase of 0.8%, and from our
base year of 89,606 tonnes an increase
of 4.2%. The Group’s production volumes
in FY23 increased versus FY22 with this
increased activity resulting in higher Scope
1 and 2 emissions. While FY23 did not see
us reduce our Scope 1 and 2 absolute
emissions, we have made significant
traction with business understanding of
the current state of our energy agenda
and what we must do to address this
under new operational leadership from
our Chief Operating Officer (‘COO’) who
joined Greencore in October 2022. FY23
required a reset on energy, establishing
clear plan ownership of both the Scope 1
and 2 agendas within the business, as well
as development of 2030 roadmaps for both
energy and our distribution fleet (Direct
In FY22 we completed our first scenario
analysis to estimate the potential impact
of climate risks and opportunities on
our business. The climate scenarios
considered physical and transition risks
for each identified climate risk and
opportunity identified. The identified risks
and opportunities were prioritised by their
likelihood, velocity and estimated financial
materiality (prior to the consideration of
any mitigation measures). This allowed us
to better understand the potential impacts
from physical and transition climate change
risks. During FY23, we continued our journey
to embed the identified impacts within our
governance, operations and strategic model
and risk management system. In FY24, we
will be rerunning this analysis with a third-
party specialist to ensure it reflects the most
up to date view of the impact of climate on
the business, and further formalising how
this insight on climate risk is integrated within
our broader risk management governance.
Listing Rule 9.8.6R Compliance
Statement
Greencore Group plc has complied with all
of the requirements of LR 9.8.6R by including
climate-related financial disclosures in this
section (and in the information available at
the locations referenced therein) consistent
with the TCFD recommendations. Our
Sustainability Report for FY23 has been
released as a standalone report; all TCFD-
related disclosures are included in this
Annual Report.
33
TCFD index
Area
Recommended disclosures
Page(s)
Governance
Disclose the organisation’s governance
around climate-related risks and
opportunities.
Strategy
(a) Describe the Board’s oversight of climate-related risks and opportunities.
(b) Describe management’s role in assessing and managing climate-related
33 and 34
risks and opportunities.
Disclose the actual and potential impacts of
climate-related risks and opportunities on the
organisation’s business, strategy and financial
planning where such information is material.
(a) Describe the climate-related risks and opportunities the organisation has
34 and 35
identified over the short, medium and long-term.
(b) Describe the impact of climate-related risks and opportunities on the
organisation’s business, strategy and financial planning.
36 and 37
Risk management
Disclose how the organisation identifies,
assesses and manages climate-related risks.
Metrics and targets
(a) Describe the organisation’s processes for identifying and assessing
38
climate-related risks.
(b) Describe the organisation’s processes for managing climate-related risks.
(c) Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s overall risk
management.
Disclose the metrics and targets used
to assess and manage relevant climate-
related risks and opportunities where such
information is material.
(a) Disclose the metrics used by the organisation to assess climate-related
risks and opportunities in line with its strategy and risk management
process.
(b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas
38 and 39
(‘GHG’) emissions, and the related risks.
(c) Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
Governance
As we seek to understand climate-related
risks to and opportunities for our business,
we recognise that active management of
our own impact on the climate and strong
oversight of our Sustainability Strategy
and actions will support climate-related
risk mitigation and lead to climate-related
opportunity identification.
Board oversight
Greencore’s corporate purpose and strategy,
including our Sustainability Strategy, are set
by the Board. The Board oversees progress
towards these ambitions, and tracks the
risks and opportunities that arise. The Group
Sustainability Strategy impacts the entire
business, and the Board delegates certain
responsibilities relating to Sustainability
Strategy to the relevant Board Committee,
and each of their roles are discussed
below. Further information can be found
in the Directors’ Report as set out on
pages 60 to 113.
The identification and management of
climate-change risks follows our established
risk management governance process
for the broader business. The Board has
overall accountability for reviewing and
monitoring the effectiveness of the Group’s
risk management systems and establishing
risk appetite. The Board in part discharges
these duties through delegation to the
Audit and Risk Committee (‘ARC’). The ARC
meets four times per year and formally
reviews the Group’s principal risks at least
bi-annually. It is responsible for overseeing
and advising the Board on the organisation’s
risk exposures, risk management strategy,
and the effectiveness of its risk management
systems. Further detail on the work of the
ARC can be found on pages 82 to 87.
In addition to ARC oversight, this year there
was an increased focus on sustainability at
Board level by establishing a Sustainability
Committee. The Sustainability Committee
is responsible for reviewing the Group’s
sustainability objectives and performance,
including the delivery of the Group’s
Sustainability Strategy, as well as providing
progress updates on sustainability matters
to the Board, primarily covering strategic
progress against roadmaps and programme
foundations, as well as KPI performance.
The Sustainability Committee is comprised
of four Non-Executive Directors with
additional regular attendees including
our Chief Executive Officer (‘CEO’), Chief
Operating Officer (‘COO’) and Chief Financial
Officer. Non-Executive Director, Helen Rose
chairs this meeting with our CEO and COO
leading the agenda, with support from the
Head of Sustainability. A sustainability update
is provided to the Committee twice yearly by
the COO and the Head of Sustainability. In its
inaugural year, the focus of the Committee
during FY23 was to monitor and provide
guidance on the Group sustainability agenda.
The Remuneration Committee has
responsibility for continually reviewing
the appropriateness of the remuneration
framework and specific sustainability metrics
have been considered and included in the
annual incentive for the CEO and CFO
for FY23. Further information on these
objectives can be found on pages 97 to 99.
Strategic Report | Directors’ Report | Financial Statements | Other Information 34
Greencore Group plc Annual Report and Financial Statements 2023
TCFD continued
The Nomination and Governance
Committee is responsible for Board
succession planning and ensuring that
the Board has an appropriate mix of skills
to drive the Group’s strategy, including its
Sustainability Strategy, forward. As part of
this process, experience and knowledge
of sustainability and climate risk would be
considered for new appointments, where
relevant.
Management’s role
The CEO has accountability for overall
environmental, social and governance (‘ESG’)
performance and climate-related risk for
the Group, which includes sustainability
governance. Our COO is the executive
member responsible for sustainability and
has a significant role to play in the Group’s
plans for adapting to climate risks. Each of
the strategic pillars – Sourcing with Integrity,
Making with Care and Feeding with Pride
– also has an executive responsible for its
delivery. Our Chief Commercial Officer
(‘CCO’) is accountable for how we source
our ingredients (Sourcing with Integrity), the
portfolio of food and packaging we produce
(Feeding with Pride) and our Scope 3 agenda.
Our COO leads on all our operational topics
such as energy, water, food waste and
communities.
The Group Executive Team are kept informed
regularly and support the management of
both our ESG agenda and climate risk. ESG
performance and progress is shared as part
of a quarterly ESG performance update, led
by our Head of Sustainability. Sustainability-
related risks are also reported to and
reviewed by the quarterly Risk Oversight
Committee (‘ROC’), which includes the full
Group Executive Team and Director Internal
Audit and Risk.
Our Group Executive Team are also
supported by a refreshed Sustainability
Oversight Committee (‘SOC’), previously
known as the Sustainability Steering
Committee. This SOC includes senior
leaders from relevant Group functions
such as finance, risk, company secretarial,
commercial, strategy and technical, and
meets monthly. The SOC’s purpose is to
act as a cross-functional business advisory
group, primarily supporting the Head
of Sustainability with the programme
foundations (governance, risk management,
transparency and embedding data and
reporting). The Committee outcomes feed
into the quarterly executive update provided
by the Head of Sustainability.
Governance
Board of Directors
Sustainability Committee
Group Executive Team
Sustainability Oversight Committee (‘SOC’)
Sustainable Business Management Groups (‘SBMG’)
Responsible
Sourcing
Ethics
Energy and
Environment
Communities
Packaging
Healthy and
Sustainable
Diets
Strategy
In the formulation of our Group Strategy,
consideration is given to our Sustainability
Strategy, and the commitments and targets
we have set as part of that, to ensure our
longer-term business strategy is an enabler
for these ambitions.
Climate risk is considered in the context of
our overall strategy-setting process, with
particular consideration given to strategic
choices on ‘where to play’ (what customers,
categories and channels we have exposure
to) and ‘how to play’ (how we manage our
operations) will impact on delivery of our
climate commitments, and correspondingly,
the risks and opportunities that we expose
the business to in the context of ongoing
climate change. Of particular consideration is
how we look to shape our product portfolio
going forward – which product categories
we may want to grow, reduce, enter or exit,
particularly in light of the increasing consumer
interest in healthy and sustainable diets, as
well as the changing regulatory requirements
with respect to data transparency and the
‘health’ status of food items.
Managing our Scope 3 footprint will also
be an important consideration for strategic
choices on our key value chain partners
going forward. Our Scope 3 emissions and
the associated climate risk from products
and our supply chain make up most of
our total emissions footprint. Managing
both the transition and physical risk linked
to our emissions profile (such as market,
reputational and policy) in our value chain
will require substantial collaboration with
suppliers, as well as strategic climate-
focused conversations with key customers.
This year we developed a Healthy and
Sustainable Diets Roadmap that will shape
our conversations with customers going
forward. This high-level roadmap will be
matured towards our net zero plan (inclusive
of Scopes 1, 2 and 3), which will include our
value chain optimisation opportunities as
well as product.
Financial planning and financial
statements
Technological investment and the associated
capital expenditure required to future-
proof the business is also considered as we
complete ongoing reviews of our asset base.
The Group’s capital expenditure process
requires a sustainability assessment prior
to approval being provided for expenditure
to proceed. As part of this, the Group are
considering the use of internal carbon prices
for the purposes of making more sustainable
capital expenditure decisions.
In FY23, the Group invested in effluent
treatment at a number of sites to reduce the
impact of discharges from our production
locations. In addition, as part of the Group’s
focus on sustainable packaging, we invested
in new machinery to support an alternative
liner-less labelling format around our sushi
packaging at one of our key production sites.
Both of these are reflected as part of our
additions to property, plant and equipment.
There will be continued investment required
in the near term to ensure delivery of our
commitments to sustainability, most notably
in energy efficiency, as we manage our
consumption, reduce associated emissions,
and reduce our reliance on market sourced
energy. In the FY24 budget, the Group
has budgeted for energy-related capital
expenditure to drive more efficient use
of energy in the business. There is also
further capital expenditure set aside in the
Group’s strategic plans for the transition
of the Group’s distribution fleet to EVs and
alternative fuels. The Group is expecting to
replace its entire 3.5t fleet with EVs by 2035.
From 2030 the Group will be focused on
converting the larger HGV fleet to alternative
fuels.
35
As the Group are targeting 2030 onwards
for the full transition of the distribution fleet
to EVs or to operate with an alternative fuel
to diesel, there are no current anticipated
impairments to the existing fleet.
From a going concern and viability
perspective and goodwill impairment
assessment, the above budgeted and
forecast amounts have also been included
in the assessments performed.
Business resilience to climate-related
risks and opportunities
We carried out a climate change risk and
opportunity assessment during FY22. The
project was supported by an expert third
party, reviewing climate risk and opportunity
for the Group and utilising a climate scenario
modelling tool. The analysis was conducted
across six food categories (red meat, poultry,
dairy, cereal, vegetables and produce) as well
as property.
Refinancing of external borrowings
As disclosed in Note 32 to the Financial
Statements, the Group refinanced its
borrowings in November 2023. The
refinancing has incorporated a number of
key ESG objectives into the financing. The
Group obtained a new £350m sustainability
linked Revolving Credit Facility (‘RCF’)
post year end. The RCF incorporates
sustainability-linked performance targets
which align with our Sustainability Strategy.
The current performance targets include
annual reductions of absolute Scope 1 and
Scope 2 GHG emissions and reduction in
the Group’s Reportable Accident Frequency
Rate. The target set will also evolve to
include Scope 3 emissions following an
update to the Group’s target in the coming
year. All targets need to be achieved in order
to attain maximum margin benefit.
The identification of impacts were based
on no changes being made to Greencore
operations throughout the period selected,
so that the full impact of what could occur if
Greencore were not to take action could be
understood.
The scenario analysis and modelling
was completed under Representative
Concentration Pathways scenarios 1.9 and
8.5. These model the potential impact
on the six food categories and property
from physical risk (being the risk of floods,
increases in ambient temperatures and
heatwaves) and transitional risk (being
increased costs due to a carbon tax on
emissions in the agricultural sector along
with increases in compliance costs due
to a carbon tax on Scope 1 and Scope 2
emissions) through to 2030. The period to
2030 was selected as this is the period most
critical for decision-making in the near to
medium term.
The scenario analysis identified that the
potential impact of transition risk on the
food categories selected was in excess of
£5m for each of red meat, poultry, dairy,
cereal and property if there is no mitigation
employed and the Group’s operating model
in 2030 remained constant at FY21 levels. For
vegetables, the potential impact would be
between £1m and £3m, and for produce, the
potential impact would be between £0.25m
and £1m. For physical risk, the scenario
analysis identified that the potential impact
on each of the categories would be less than
£0.25m. The analysis showed that the key
risks for the Group mainly arise from carbon
pricing under the low carbon transition
scenario with the impacts from chronic
climate change and acute climate events not
found to be material for 2030.
This scenario analysis helped to provide
an initial understanding on the climate-
related physical and transition risks that
are material to Greencore, which we
need to manage through our broader
stakeholder environment. The Group will
continue to use this analysis as a baseline
of understanding, but complete a more in
depth scenario analysis in FY24 to inform a
climate adaptation strategy that will guide
our discussions with stakeholders and our
supply chain, and support us in continuing to
build a business resilient to the physical and
transition climate risks that we will face.
Strategic Report | Directors’ Report | Financial Statements | Other Information 36
Greencore Group plc Annual Report and Financial Statements 2023
TCFD continued
Climate risks and opportunities
Our global supply chain carries significant physical risk due the nature of our business and its reliance on the environment. The process of
identifying climate-related risks and opportunities within our supply chain was done via a qualitative and quantitative risk assessment process
completed in FY22. These key significant risks were then built into the scenario analysis process to fully capture relevant areas of the business.
The following risks and opportunities are linked to our Sustainability Strategy on pages 24 to 31. The results of the scenario analyses are
included below:
Physical risks
Chronic climate change and acute weather events
The occurrence of significant weather events including heatwaves,
drought, floods, storms, crop pests and animal diseases and changes
in precipitation patterns, rising mean temperatures and rising sea
levels.
Horizon: Short/medium/long-term
The Group has noted that there was an immaterial impact to the
Group’s operations as a result of weather events over the past year.
The Group believes that physical risks such as heatwaves, flooding
and acute weather events will continue to be mitigated by the Group.
However, the Group believes that the risk is applicable to the short,
medium and long term due to the changing nature of acute weather
events.
Impact on the Group:
The Group’s business operations rely on raw materials that are key
for the production of the Group’s food products. Climate change and
acute weather events may create shortages in availability or supply
of raw materials that could cause interruption to the business and
constraints on the supply of these critical materials.
Mitigation:
• The Group continuously researches alternative and/or new
materials to use as substitutes for key materials to ensure resilience
of supply chain and business operations.
• The Procurement team are focused on monitoring availability of
existing raw materials to increase supply resilience.
Transition risks
Policy and legal
External infrastructure and energy transition planning resulting in
increased costs and requiring strategic capital investment.
Horizon: Short/medium-term
Market
Changing consumer preferences and changes to operational models
requiring increased costs and changes in processes.
Horizon: Short/medium-term
Impact on the Group:
The availability of low carbon and reliable energy sources for energy
intensive assets along with government policies and investment
in clean energy, or lack thereof, could impact the continuity
of products, increase costs of energy sources (e.g., pricing of
greenhouse gas (‘GHG’) emissions) and require extensive investment
to ensure reliable, clean energy sources.
Mitigation:
• The Group regularly monitors the regulatory and policy
requirements in Ireland and the UK to identify changes in the
regulatory environment that could adversely impact the Group’s
energy requirements.
• The Group applies hedging of energy as appropriate to avoid
energy price fluctuations.
• The Group continually reviews and investigates alternative, lower
carbon energy sources.
• The Group’s Operations function focuses on innovations that
reduce energy consumption and materials.
Impact on the Group:
Changing consumer preferences could impact demand for products
that the Group produces. The change in demand could require
changes to the Group’s operating model and require investment to
facilitate changes to existing processes.
Mitigation:
• The Group closely monitors consumer preferences as part of the
Group’s operations, with healthy and sustainable diets a key focus
of the Group.
• Maintain investment in research and development, process
optimisation and product innovation.
Transition risks continued
Technology
Advancements in technology resulting in transition to lower
emissions technology.
Horizon: Short/medium-term
37
Impact on the Group:
Advancements in technology could result in substitution of existing
products, services or assets with lower emission options and lower
emission technology. This in turn could cause asset write offs as a
result of early retirement of assets that do not meet lower emission
technology requirements.
Mitigation:
• The Group has put aside capital expenditure to assist the business
with advancements in lower emissions technology.
• The Group includes sustainability considerations in its capital
expenditure process and useful life of assets is reviewed annually.
Opportunities
Reputation
The work that the Group is doing on sustainable food products could
result in favourable increase in demand due to shifts in consumer
preferences.
Impact on the Group:
Consumer demand is changing in response to climate risk and the
Group’s ability and reputation for producing products that align to
changing consumer preferences could result in favourable increases
in demand.
Horizon: Short/medium-term
Actions to maximise:
• The Group is proactively working to upskill the organisation and
assigning Plan Owners to bring sustainability into our everyday
decision-making.
• The Group actively monitors consumer preferences.
Technology
Advancements in technology could reduce operating costs.
Horizon: Short/medium/long-term
Impact on the Group:
Advancements in technology could result in reduced operating costs
through efficiency gains and reduced exposure to fossil fuels and
volatile prices.
Actions to maximise:
• The Group is working to onboard advanced technology as
evidenced through the changes being made to the Group’s
distribution fleet on a phased basis to electric and natural fuels.
• Efficient energy management in line with engineering asset
management including installation of metering at sites to track
energy use.
Time horizons for TCFD
Time period
Years
Reason
Short
0 to 3 years
Aligned to our financial planning cycle and typical
capital investment payback time used for financial
planning.
Medium
3 to 10 years
Nearer term to capture transition risks.
Long
10 years +
Longer term to capture physical risks and opportunities.
Strategic Report | Directors’ Report | Financial Statements | Other Information 38
Greencore Group plc Annual Report and Financial Statements 2023
TCFD continued
Risk management
The identification and management of
climate change risks follow our established
risk management process for the broader
business. The Board has overall accountability
for setting the Group’s strategy, reviewing,
and monitoring the effectiveness of the
Group’s risk management systems, and
establishing risk appetite. The Board in part
discharges these duties through delegation
to the Audit and Risk Committee (‘ARC’).
The ARC is responsible for overseeing and
advising the Board on the organisation’s risk
exposures, risk management strategy, and the
effectiveness of its risk management systems.
Principal risks, defined as those most likely
to have a significant impact on Group-wide
objectives, are identified by the Group
Executive Team. The Group has identified
the delivery of our sustainability agenda as
a principal risk. Moving into FY24, broader
climate-risk identification, assessment,
mitigation, and review will be aligned more
closely with our Enterprise Risk Management
(‘ERM’) framework. Once integrated, this risk
will be prioritised against all other business
risks via the risk management process
described on page 49. Our principal risk
profile is dynamic and reviewed on a regular
basis. New risks critical to the success of the
Group will be captured and tracked by these
processes as appropriate. Functional risks are
identified and tracked across a range of risk
registers embedded within core functions.
These are the risks relevant to functional
responsibilities and objectives and include a
tracking of climate-related risk.
The most significant areas of risk identified
to date relate to the potential impacts on
raw material availability through changes in
global weather patterns or extreme weather
events, changing consumer demand leading
to adjustments in our product portfolio, and
the possible disruption to manufacturing
and logistics operations. The existing and
emerging regulatory requirements related
to climate change is a key risk in the short
term and will be closely monitored by the
development of a three year Transparency
Roadmap, that will be owned by the
Sustainability team.
Principal, emerging, and functional Risks
are reported to and reviewed by a quarterly
Risk Oversight Committee (‘ROC’), made up
of the Group Executive Team and Director
Internal Audit and Risk. The remit of the
ROC is to provide management oversight
of the suitability and effectiveness of the
Group’s risk management systems, including
the risk management policy, protocols,
and governance. The ROC is the primary
forum in which climate risk is reviewed and
addressed at business level. However, the
more specific functional level climate risks
such as a crop specific failure, site specific
flooding or other site-specific disruption will
be captured in the relevant Procurement and
Operations risk registers.
The 2023 summer season has highlighted the
accelerated risk of climate change as weather
patterns become increasingly unstable and,
in many cases, extreme and drawn out. In
FY24, the Group will be focusing on how we
identify, measure, and plan for climate risk
across all parts of our business to ensure
the business is preparing for heightened
medium- and long-term impacts.
Read more on our Risk and Risk Management section
on pages 49 to 57
Metrics and targets
This section discloses our operational energy
consumption, carbon footprint, food waste and
surplus, and energy efficiency targets in line
with the UK Government’s Streamlined Energy
and Carbon Reporting (‘SECR’) Regulation.
Our food waste baseline year of FY17 differs
from our Scope 1, 2 and 3 absolute carbon
emissions baseline year of FY19 due to
reporting in line with the food industry
collaborative programme, the UK Food Waste
Reduction Roadmap. We continue to disclose
our total consumption and per tonne water
impact in the interim as we work towards
establishing a medium-term group reduction
target as our primary measure.
We assess our performance against medium-
term targets (2030) and short-term Key
Performance Indicators (‘KPIs’*), with our
SBTi approved target being the primary
measure for progress towards our net
zero Scope 1 and 2 commitment for 2040,
alongside supporting KPIs such as total
gross emissions. With the new Forest, Land
and Agriculture (‘FLAG’) regulation coming
into effect in March this year, affecting
Greencore from FY24, we will begin work
to reset our Scope 3 target to align with a
1.5°C trajectory, and the FLAG regulation,
as well as move to an absolute measure to
enable a glide path to net zero. Our FY24
footprint will be calculated using the FLAG
methodology across our ingredient footprint,
however we do not expect to have our new
target approved by this point due to known
approval delays by the SBTi, so we will report
against our current, relative, SBTi Scope 3
target in FY24.
The SBTi requires that science-based targets
are recalculated to reflect material changes
in climate science and business context to
ensure their continued relevance. The SBTi
stipulates that targets shall be reviewed and, if
necessary, recalculated and revalidated every
five years at a minimum. We review our GHG
inventory on an annual basis and restate our
data and/or recalculate our science-based
targets when required, to reflect changes to
our group structure, methodology changes
or errors.
* We have annual reduction targets in place for
energy, water and food waste, formed as part of
a nonlinear pathway to 2030. This pathway was
previously linear but has been adjusted to reflect
historical performance.
Annual greenhouse gas (‘GHG’) emissions (tonnes CO2e)*
Emissions from Absolute Group GHGs:
Combustion of fuel and operation of facilities (Scope 1)
Electricity, heat, steam and cooling purchased for own use (Scope 2)
Total gross emissions (tCO2e) Scope 1 and 2
Green tariff (tCO2e from green energy certificates)
Total net emissions (Scope 1 and 2)
Scope 3 emissions (m tonnes of CO2e)2
Total Scope 1, 2 and 3 emissions (m tonnes of CO2e)
GHGs Intensity Measure
Revenue (£’000)
Scope 1 and 2 kilogrammes CO2e/£1 revenue
Scope 3 tonnes CO2e/t product
FY23
FY22
Base FY19
71,858
72,320
60,952
21,508
20,335
28,654
93,366
92,655
89,606
(1,761)3
(19,563)
(28,624)
91,605
73,092
60,982
1.40
1.49
1.48
1.55
1.581
1.67
1,913,696 1,739,600 1,446,100
0.049
0.053
0.062
2.73
2.741
2.811
39
* GHG emissions data for Scope 1 and 2 is calculated by reference to our core Group operations and offices in the UK and Ireland (excluding Trilby Trading Limited). Our GHG
emissions have been calculated using the GHG Protocol Corporate Accounting and Reporting Standard, and emissions factors from the Department for Energy, Security and
Net Zero (‘DESNZ’), using UK Government GHG Conversion Factors for Company Reporting.
1. Adjusted historical data for Scope 3 emissions reflecting updates to data collection and ensuring consistency of approach.
2. Scope 3 emissions scoping, data collection and analysis has been performed in line with the Greenhouse Gas Protocol Corporate Standard, which is the most widely
recognised framework for corporate GHG accounting internationally. The key categories for Scope 3 included in this assessment are purchased goods and upstream
transport. These are tracked for the science-based target set in 2021 as they were assessed to be the material categories during our original whole business baseline and
target setting process.
3. This follows a move away from Renewable Energy Guarantees of Origin this year, to focus on workstreams such as solar, PPAs, and other renewables options.
Annual energy consumption*
Emissions from:
Fuel non-renewable (MWh)
Fuel renewable (MWh)
Total fuel consumption (MWh)
Total electricity consumption (MWh)
Total energy consumption (MWh)
FY23
FY22
Base FY19
346,484
346,107
289,954
2,248
1,498
1,045
348,733
347,605
290,999
103,781
105,087
108,012
452,513
452,692
399,011
* Total energy consumption in MWh was calculated from primary consumption data, using standard conversion factors from the UK Government GHG Conversion Factors
for Company Reporting 2023. The data was collated specifically for this Annual Report and Financial Statements. Energy consumption data is for UK and Ireland office
and operations (excluding Trilby Trading Limited).
Energy and water KPIs (for manufacturing only)
Emissions from:
Total primary energy consumption (MWhp)
Energy intensity ratio (kWhp/tonne)
Water consumption (megalitres)
Water per tonne of production (m3/tonne)
Food waste and surplus (for manufacturing only)
Tonnes:
Food waste
Animal feed
Surplus redistribution
Total food handled
Food waste as a % total food handled
1. Number revised following reporting improvements.
FY23
FY22
Base FY19
489,782
488,497
467,617
1,250
2,717
6.93
1,254
2,709
6.96
1,235
2,255
5.96
FY23
FY22
Base FY17
34,523
36,737
42,180
6,506
770
5,9111
7,285
688
746
432,050
433,012
442,865
7.99%
8.48%
9.52%
Focuses for FY24
We will continue to develop our understanding of how climate will materially impact our business, both through risks and opportunities. Our
focus activities for the next 12 months will include:
• Continue to develop our roadmaps and activities towards meeting our climate commitments including decarbonisation targets under SBTi;
• Update our scenario analysis to inform an evaluation of our key risks and opportunities;
• Ensure climate-risk identification, assessment, mitigation, and review is aligned more closely with our ERM Framework as well as strategic
and financial planning;
• Ensure climate-risk and opportunity is embedded and monitored under the same governance framework as our Sustainability Strategy;
• Ensure our Board, Group Executive Team and functional leaders are upskilled on climate risk and opportunity; and
• Collaborate with our key suppliers with the intention to include validated supplier data to further refine our Scope 3 and increase the
accuracy, allowing us to better understand the ingredient and packaging physical risk profile.
We recognise the deep and intricate connections between food systems and the health of both people and planet, as well as the impact of
a changing climate for our own future. Greencore is committed to maturing both our understanding and approach to the risk we face, the
mitigating actions to address these and upskilling our business leaders to support this.
Strategic Report | Directors’ Report | Financial Statements | Other Information 40 Greencore Group plc Annual Report and Financial Statements 2023
Our Key Performance Indicators
FINANCIAL
We use our Key Performance Indicators (‘KPIs’) to assess
and monitor the performance of the Group and to measure
our progress against our strategic objectives.
Our financial KPIs measure progress of our strategic priorities in delivering profitability,
returns and cashflow. In measuring this progress, we also consider the relationship
between each of these measures.
All of the Group’s financial KPIs are non-IFRS measures or Alternative Performance Measures
(‘APMs’). The definitions, calculations and reconciliations of all APMs (including these financial
KPIs) to IFRS are set out within the APMs section on page 177.
Profitability
Pro Forma Revenue Growth
Adjusted Operating Profit
Adjusted Earnings per Share (‘EPS’)
+13.5%
(FY22: +29.4%)
£76.3m
(FY22: £72.2m)
9.3p
(FY22: 9.2p)
FY23
FY22
FY23
FY22
FY23
FY22
Strategic relevance
The Group uses Pro Forma Revenue Growth
as it believes this provides a more accurate
guide to underlying revenue performance.
It is central to our strategic framework.
Strategic relevance
The Group uses Adjusted Operating Profit
to measure the underlying and ongoing
operating performance of each part of
the business and of the Group as a whole.
Strategic relevance
The Group uses Adjusted EPS as a
key measure of the overall underlying
performance of the Group and returns
generated for each share.
FY23 performance
Pro Forma Revenue Growth increased by
13.5% in FY23 driven by modest volume
growth (including impact of new business
wins) and the pass through of inflation. In
addition, an adjustment was made to reflect
the additional trading week in FY22 as FY22
was a 53 week trading period and FY23 was
a 52 week trading period.
FY23 performance
Adjusted Operating Profit in FY23 was
£76.3m, an increase of £4.1m against
FY22, supported by the implementation of
commercial and operational initiatives.
FY23 performance
Adjusted EPS was 9.3 pence an increase
of 0.1 pence against FY22, as a result of an
improvement in Adjusted Operating Profit.
41
Link to remuneration
The remuneration of Executive Directors is aligned closely with financial and non-
financial KPIs through the Company’s Performance Share Plan (‘PSP’) and Annual
Bonus Plan (‘ABP’). PSP awards granted in FY23 (and those intended to be granted
in FY24) are based on a scorecard of three equally-weighted measures comprising
Return on Invested Capital (‘ROIC’) and Adjusted EPS, alongside Total Shareholder
Return (‘TSR’). The financial element of the ABP continues to be linked to Adjusted
Operating Profit (weighted 50%) and Free Cash Flow (weighted 25%), with the
remaining 25% linked to personal and strategic objectives selected each year
to reflect our non-financial KPIs and other short-term business priorities.
See Report on Directors’ Remuneration on page 88
Returns
ROIC
8.9%
(FY22: 8.4%)
FY23
FY22
Cash Flow
Free Cash Flow
£56.8m
(FY22: £58.7m)
Free Cash Flow Conversion
42.8%
(FY22: 46.3%)
FY23
FY22
FY23
FY22
Strategic relevance
The Group uses ROIC as a key measure
to determine what return is generated
from each part of the business, as well
as measuring the financial quality of
potential new investments.
FY23 performance
The Group’s ROIC in FY23 was 8.9%
which was 50bps ahead of the FY22
measure of 8.4%. ROIC was positively
impacted by the increase in Adjusted
Operating Profit, which was offset by
an increase in the effective tax rate
from 19% to 21%.
Strategic relevance
The Group uses Free Cash Flow to measure
the amount of underlying cash generation
and the cash available for distribution and
allocation.
FY23 performance
Free Cash Flow in FY23 was an inflow of
£56.8m compared to £58.7m in FY22.
The main driver of the decrease is due to
increased Maintenance Capital Expenditure
and increased financing costs. In addition,
the Group had lower Strategic Capital
Expenditure than FY22 and disposed of
Trilby Trading Limited during FY23.
Strategic relevance
The Group uses Free Cash Flow Conversion
to measure how efficiently profits from
the overall underlying performance of the
Group are transformed to cash available
for distribution and allocation.
FY23 performance
The Free Cash Flow Conversion metric
of 42.8% decreased from 46.3% in FY22
consistent with Free Cash Flow, this was
due to increased Maintenance Capital
Expenditure and increased financing costs.
In addition, the Group had lower Strategic
Capital Expenditure than FY22 and disposed
of Trilby Trading Limited during FY23.
Strategic Report | Directors’ Report | Financial Statements | Other Information 42
Greencore Group plc Annual Report and Financial Statements 2023
Our Key Performance Indicators continued
NON-FINANCIAL
We use our KPIs to assess and monitor the performance of the
Group and to measure our progress against our strategic objectives.
Our non-financial KPIs are designed to measure progress against
the key drivers of our purpose – People at the Core, Sustainability,
Excellence and Great Food.
People at the Core
Employee
engagement
Learning and
development
% Engagement
in survey
76%
(FY22 and FY23)1
% Internal
progression rate
41%
(FY22: 44%)
Strategic relevance
We aim to motivate and
support our people to take
on more responsibility and
ownership, we also recognise
and reward talent. The
internal progression rate is a
useful measure to assess this
development and is calculated
as the total number of roles
vacant in the year that were
filled by internal candidates.
FY23 performance
Despite a slight decline in the
internal hire ratio our Grow with
Greencore approach helps our
people to enrich their careers,
providing opportunities for
growth and progression,
and to achieve their potential.
Strategic relevance
Our employee engagement
score provides us with insight
into how committed our
people are to our goals,
how motivated they are to
contribute to our success and
importantly how likely they
are to recommend Greencore
as an employer.
FY23 performance
The full People at the Core
survey is completed by our
colleagues every 18 months.
In the interim period, we
issued a Pulse Engagement
Survey. During FY23, a Pulse
Engagement Survey was
carried out across five key
sites and all central functions
asking colleagues to share
their thoughts on how we’ve
progressed on engagement
action plans. We are pleased
to report that the sustainable
engagement scores for the five
key sites and central functions
increased from 74% to 76%.
Our next full People at the
Core survey will take place
in summer 2024.
1. The % engagement in survey score for FY22 and FY23 is 76% as this KPI
relates to the People at the Core survey that took place in October 2022
and therefore applies to both FY22 and FY23.
Sustainability
Food waste
Energy efficiency
Waste as % total food
handled
Primary energy consumption
per tonne
7.99%
(FY22: 8.5%)
Strategic relevance
Managing food waste is a top
priority across our operations.
We address this in multiple
ways including prevention,
redistribution, and use in animal
feed. This forms the basis of our
commitment to halve our food
waste (from a FY17 baseline)
by 2030, in line with the UN
Sustainable Development
Goal target.
FY23 performance
In FY23, our food waste,
measured as a percentage of
the product and ingredient
handled, was 7.99%. This
is a decrease from last
year’s performance at
8.48%, primarily due to the
Group’s continued focus on
simplification of products, as
well as improvements in data
and reporting. To date, we have
achieved a 1.53% reduction
from our base year (FY17)
in food waste as an overall
percentage of food handled,
and 16% of the 50% reduction
target set for 2030.
1,250
kWp per tonne
(FY22: 1,254)
Strategic relevance
Reducing GHG emissions
through intelligent energy use
will help us transition towards
a net zero future. We have
committed to science
based targets to help guide
us to succeed, and we are
continually monitoring
our use of energy to assess
our progress.
FY23 performance
In FY23, our total gross Scope
1 and 2 carbon emissions
increased from the previous
year from 92,655 tonnes
to 93,366 tonnes, an 0.8%
increase, and from our base
year of 89,606 tonnes an
increase of 4.2%. Although
data quality and availability
has improved this year, we
have not decoupled energy
consumption from production
tonnage. We are committed to
addressing our challenges in
the coming year by deploying
our Energy Roadmap across
our Operations network.
43
Link to remuneration
The remuneration of Executive Directors is aligned closely with financial and non-
financial KPIs through the Company’s Performance Share Plan (‘PSP’) and Annual
Bonus Plan (‘ABP’). PSP awards granted in FY23 (and those intended to be granted
in FY24) are based on a scorecard of three equally-weighted measures comprising
ROIC and Adjusted EPS, alongside Total Shareholder Return (‘TSR’). The financial
element of the ABP continues to be linked to Adjusted Operating Profit (weighted
50%) and Free Cash Flow (weighted 25%), with the remaining 25% linked to personal
and strategic objectives selected each year to reflect our non-financial KPIs and
other short term business priorities.
See Report on Directors’ Remuneration on page 88
Excellence
Service
Health
and safety
% products delivered on
time and in full
Reportable Accident
Frequency Rate (‘RAFR’)
98.5%
(FY22: 97.4%)
0.26
(per 100,000 hours)
(FY22: 0.33)
Strategic relevance
Building customer relationships
underpins the Group’s strategic
priority to deepen customer
relevance. An important
component of measuring this
is our service level. We track
our service level by measuring
the products we deliver to
customers, on time and in full,
compared to what they ordered
from us.
FY23 performance
Operational service levels in
the year were improved from
97.4% to 98.5%, as supply
chain and labour challenges
eased and other operational
improvements were
embedded.
Strategic relevance
We are committed to
enhancing the health,
safety and wellbeing of our
colleagues. We recognise
this is critical to the success
of our business, and we work
hard to understand risks to
our colleagues in order to
build strategic, targeted and
evidence-based interventions.
We continually review and
measure the performance
of our compliance and
culture through monitoring
performance measures
and auditing that informs
Greencore leadership on
improvement programmes for
health and safety.
FY23 performance
Our RAFR has shown a slight
improvement from 0.33 to 0.26
as a result of a continued focus
on health and safety.
Commercial
Advantage survey
#1
(FY22:#1)
Strategic relevance
Central to our commercial
success is a relentless
focus on our customer
relationships. Each year, the
Advantage Group surveys
retailers about their chilled
convenience supplier base,
both branded and own-label,
across a range of important
performance areas.
FY23 performance
Despite a challenging
backdrop, we maintained
the number-one position in
the overall Advantage Group
survey. We ranked as clear
number-one supplier within
the food to go and ready meals
categories and scored strong
positions across our other
product areas.
Great Food
Food safety
% BRCGS audits at
AA/A grades
100%
(FY22: 100%)
Strategic relevance
Producing safe, authentic
and excellent quality food is
central to everything we do.
The Group utilises the Brand
Reputation Compliance Global
Standards in food safety (the
‘BRCGS’) to measure food
safety levels, a standard that
is recognised by the Global
Food Safety Initiative. Testing
is carried out through audits
on food safety, quality and
operational criteria at each
of our sites. All unannounced
audits were paused during
the pandemic. These are
now being reinstated so the
current audit results are a
mixture of announced and
unannounced audits.
FY23 performance
For the sixth consecutive year,
we met the highest level of
food safety performance, with
all 16 of our manufacturing
sites audited achieving AA or
A grades, the highest levels
attainable for announced
audits under BRCGS.
Strategic Report | Directors’ Report | Financial Statements | Other Information 44 Greencore Group plc Annual Report and Financial Statements 2023
Operating and financial review
OPERATING
REVIEW1
Strategic developments
The Group delivered good progress against
its strategic priorities in FY23, underpinned
by close customer engagement in a highly
inflationary and difficult consumer spending
environment. The Group delivered year-
on-year reported revenue growth of 10.0%,
through a combination of underlying volume
growth, including net new business wins and
also recovering significant levels of inflation.
Manufactured volume growth of 0.5%
represents a strong volume performance,
relative to the wider market performance.
The Group maintained outstanding
operational service levels during the financial
year, working closely with our customers and
supply partners, with overall service levels at
98.5% in FY23 compared to 97.4% in FY22.
Management has remained focused on
proactively managing contract returns and
capacity management across the Group.
The Group has exited a number of contracts,
which were delivering sub-optimal returns
with a focus on maximising returns and
optimising use of our manufacturing footprint.
The Group successfully delivered on its Better
Greencore programme targets in FY23, a
change programme to drive efficiency and
profit improvement, with a focus on fixed
cost and overhead inflation. The targeted
£30m of annualised benefits from this
programme were realised during H2 FY23.
In March 2023, the Group accelerated a
headcount reduction programme which
resulted in the reduction of approximately
250 salaried roles, in addition to this, a further
100 vacant salaried roles were removed from
the organisational structure.
An exceptional charge of £8.9m was
recognised in FY23 related to the Better
Greencore programme; bringing the
cumulative cost of delivery of the
programme to £25.7m, including £0.7m
of capital expenditure.
During the financial year the Group
established a strategic framework for recovery
and growth, with goals set across a three
horizon framework:
Trading Performance
Revenue
Group Operating Profit
Adjusted Operating Profit
Group Profit Before Tax
FY23
£m
1,913.7
66.0
76.3
45.2
FY22
£m
Change
(As reported)
1,739.6
52.1
72.2
39.8
+10.0%
+£13.9m
+£4.1m
+£5.4m
Change
(Pro Forma
basis)
+13.5%
n/a
n/a
n/a
• The first objective was to stabilise the
business through the first horizon, which
was achieved in FY23;
• The second horizon is focused on the
rebuilding of profitability and returns; and
• The focus of the third horizon is to further
develop our strong growth platform.
Our horizon framework will guide the
prioritisation and sequencing of our long-
term strategic objectives.
The Group also initiated incremental activity
on commercial and operational efficiencies
to support profitability and mitigate inflation
in FY23. The Group made good progress in
implementing these in FY23 as outlined below.
• A commercial excellence programme
combining profit enhancement activities
across volume, cost, pricing and product
mix:
– a deep product innovation pipeline
has enabled the Group to drive volume
and unlock value for both Greencore
and customers;
– improvements in our NPD process
have increased efficiency and allowed
us to better support customers;
– in FY23, the number of SKUs were
reduced by 9% with volume per SKU
increasing 10%; while the Group
continued to be a supplier of choice to
our chosen partners; and
– increased focus on returns has led to
the resignation from contracts which
were delivering sub-optimal returns.
• A structured operational excellence
programme has been rolled-out across
the business. This involves:
– detailed diagnostic benchmarking of
the Group’s manufacturing facilities;
– the selection of four pilot large sites
for improvement activities, which
together account for c.50% of Group
cost of goods sold; and
– implementation of improvement
methodologies, with each of the
four sites focused on one of material
waste, labour, planning, supply chain
planning or engineering.
Following on from this the Group will
continue to focus on commercial excellence,
operational excellence and continued tight
management of costs.
The Group announced the appointment of
Catherine Gubbins as Executive Director and
Chief Financial Officer on 5 September 2023.
Catherine joins the business on 6 February
2024 from daa plc, the global airports and
travel retail group where she has worked for
nine years in various roles including as Group
CFO since March 2021.
In November 2023, John Amaechi and Sly
Bailey advised the Board that they would not
be seeking re-election at the 2024 Annual
General Meeting.
Trading Performance
Group reported revenue increased by
10.0% to £1.9bn in FY23. Reported revenue
growth was driven by an 11.3% benefit from
recovery of cost inflation, a 0.7% benefit
from manufactured volume increases (a
combination of underlying growth, price
mix and new business wins) and a (1.9%)
decline related to distribution of third-party
goods, the Trilby Trading Limited business
and revenue contribution from the 53rd
week in FY22. On a pro forma basis, revenue
increased 13.5% in FY23 as a result of
1. The Group uses Alternative Performance Measures (‘APMs’) which are non-International Financial Reporting Standards (‘IFRS’) measures to monitor the performance of
its operations and of the Group as a whole. These APMs along with their definitions and reconciliations to IFRS measures are provided in the APMs section on page 177.
45
Group Cash Flow and Returns
Free Cash Flow
Net Debt
Net Debt (excluding lease liabilities)
ROIC
adjusting for the impact of the 53rd week
in FY22 and the disposal of the edible oils
trading business, Trilby Trading Limited.
Overall, Group Operating Profit in FY23
increased 26.7% to £66.0m and Adjusted
Operating Profit increased by 5.7% to
£76.3m. The Adjusted Operating Profit
improvement was driven by the increased
revenue performance underpinned by
the operational and commercial initiatives
implemented during the financial year.
Group Profit Before Tax was £45.2m in FY23,
compared to £39.8m in FY22.
Substantial inflation in the Group’s main
cost components led to a low double
digit percentage rate of inflation in FY23.
Inflation incurred was largely recovered or
mitigated in the period, through a number
of mechanisms, including pass-through of
cost increases, cost reductions, product
and range reformulations, and alternative
sourcing. Specifically, the Better Greencore
change programme alongside other
efficiency initiatives also supported the
offsetting, recovery and mitigation of labour,
fixed cost and other overhead cost inflation.
The largest component of inflation was
in commodities across raw materials and
packaging, some of which was recovered
through pre-agreed recovery mechanisms in
place with a number of customers. The other
elements of inflation were largely recovered
through a combination of close customer
engagement and operational efficiencies.
Key initiatives on which the Group worked
in collaboration with customers, included
range alterations, packaging redesigns and
product reformulations.
New business, net of business losses,
contributed c.2% of the Group’s revenue
growth in the period. The new business was
largely driven by the annualisation of the on-
boarding of a strategic business win across
multiple categories, which was supported by
a strategic capital investment.
The Group managed a very active
commercial agenda with customers in
FY23 and launched approximately 400
new or reformulated products, within the
Group’s total SKU range of more than 1,600
products. Examples of launches with key
customers during the financial year include
Christmas ranges of sandwiches. In January
2023, a series of new own label brands were
launched in the vegan and health category
with major retailers. We also launched a new
range of cooking sauces, as well as creating
summer twists on the nation’s favourite
quiche and picnic ranges.
Revenue in the Group’s Food to Go
categories (comprising sandwiches, salads,
sushi and chilled snacking) totalled £1.25bn
and accounted for approximately 65%
of reported revenue. Reported revenue
increased by 7.9% in these categories, largely
driven by inflation recovery, in addition
to volume growth in sandwiches and the
contribution of new business wins. The
Group also experienced volume growth
across the Food to Go Salads category,
however there were weaker performances
in the Side of Plate category and a continued
challenging own label sushi market. Revenue
from the distribution of third-party products
accounted for approximately 9% of Group
revenue in FY23.
FY23
£m
56.8
199.0
154.0
8.9%
FY22
£m
Change
(As reported)
58.7
228.0
180.0
8.4%
-£1.9m
-£29.0m
-£26.0m
50bps
The Group’s Other Convenience categories
comprise activities in the chilled ready
meals, chilled soups and sauces, chilled
quiche, ambient sauces and pickles, and
frozen Yorkshire Pudding categories, as
well as the Trilby Trading Limited business.
Reported revenue across these categories
increased by 14.3% to £661.1m in FY23. The
increase was driven by inflation recovery,
in addition to volume increases across a
number of categories. Revenue related to
volume growth was 0.4% higher than in
FY22, excluding the impact of the 53rd week
in FY22, due largely to the annualisation
of new business wins onboarded in the
ready meals category in FY22. In addition
to this the Group also saw a strong volume
performance in the cooking sauce and soup
categories, however much of the remainder
of the grocery category saw a more
challenging performance.
Group Cash Flow and Returns
The Group continued to carefully manage
both Cash Flows and leverage in FY23.
The Group recorded a Free Cash inflow of
£56.8m in FY23 a modest decrease on the
prior year as the higher profitability in FY23,
was offset by increases in financing and tax
costs. Free Cash Flow conversion was 42.8%
compared with 46.3% in FY22.
The Group’s Net Debt at 29 September
2023 was £199.0m, a decrease of £29.0m
compared to 30 September 2022. Net Debt
excluding lease liabilities was £154.0m
down 14% on the prior year due to increased
profitability, reduction in capital expenditure
and disposal proceeds of Trilby Trading
Limited. The Group’s Net Debt: EBITDA
leverage covenant as measured under
financing agreements was 1.2x at period end,
compared to 1.5x at 30 September 2022.
Strategic Report | Directors’ Report | Financial Statements | Other Information
46
Greencore Group plc Annual Report and Financial Statements 2023
Operating and financial review continued
Progress across the Better Future Plan was
made as outlined below:
•
reported on deforestation-free soy for the
first time, providing visibility of the total
soy footprint;
• embedded human rights as an agenda
item for discussion in key supplier
performance meetings;
launched scope 3 carbon engagement
with key suppliers, for collaboration with
suppliers;
•
• completed energy savings opportunity
scheme (ESOS) audits across 80% of our
total group energy usage; and
• on-boarded the Mondra environmental
footprinting tool.
In January 2023, the Group further
strengthened its balance sheet when it
extended the maturity on its £50m bilateral
facility by two years to January 2026. As at
29 September 2023, the Group had total
committed debt facilities of £482.8m, a
weighted average maturity of 2.1 years and
cash and undrawn committed bank facilities
of £327.8m. Subsequent to the year end, the
Group has refinanced its debt facilities with
a new five year £350m sustainability linked
revolving credit facility.
ROIC increased to 8.9% for the year ended
29 September 2023, compared to 8.4% for
the prior year. The year-on-year increase was
driven primarily by increased profitability in
the 12-month period to 29 September 2023.
Average invested capital decreased year-on-
year from £695.0m to £678.1m.
Better Future Plan
During FY23, we focused on assigning
ownership of action and refined topic
priorities to help us to reach our targets.
Our FY23 key sustainability strategy progress
included the implementation of a new
Plan Ownership Model which sees plan
owners within relevant business functions
take responsibility for each element of our
Better Future Plan and defined the strategic
focus to four priorities; energy, food waste,
communities and healthy and sustainable
diets.
47
FINANCIAL
REVIEW1
Revenue and Operating Profit
Reported revenue in the period was
£1,913.7m, an increase of 10.0% compared
to FY22, due to increased volume in the
financial year including new business wins,
as well as recovery of inflation. Pro Forma
Revenue increased by 13.5%. Pro Forma
Revenue adjusts for the disposal of the Trilby
Trading Limited in both financial years and
has adjusted FY22 revenue for the additional
week of trading.
Group Operating Profit increased from
£52.1m in FY22 to £66.0m in FY23 as a
result of the increased revenue performance
underpinned by the operational and
commercial initiatives implemented during
the financial year. Adjusted Operating Profit
was £76.3m compared to £72.2m in FY22.
Adjusted Operating Margin was 4.0%, 20bps
lower than FY22.
Net finance costs
The Group’s net bank interest cost was
£16.9m in FY23, an increase of £5.8m versus
FY22. The increase was driven by higher
cost of debt during FY23. The Group also
recognised a £1.2m interest charge relating
to the interest payable on lease liabilities in
the period (FY22: £1.2m).
The Group’s non-cash finance charge in
FY23 was a net £2.7m (FY22: £Nil). The
change in the fair value of derivatives and
related debt adjustments including foreign
exchange in the financial year was a £1.4m
charge (FY22: £1.2m credit) and the non-
cash pension financing charge of £1.2m was
£0.1m higher than the FY22 charge of £1.1m.
Profit before taxation
The Group’s Profit before taxation increased
from £39.8m in FY22 to £45.2m in FY23,
driven by higher Group Operating Profit and
lower exceptional items offset by higher
finance costs. Adjusted Profit Before Tax in
the period was £58.1m compared to £59.8m
in FY22, the decrease primarily driven by a
higher effective tax rate.
Taxation
The Group’s effective tax rate in FY23 was
21% (FY22: 19%). The increase in the effective
tax rate reflects the increase in the UK
corporation tax rate.
Exceptional items
The Group had a pre-tax exceptional charge
of £6.7m in FY23, and an after tax charge of
£5.5m, comprised as follows:
Exceptional Items
Reorganisation costs
Pension restructuring
Profit on disposal of trading
business
Release of legacy business
liability
Reversal of Impairment
Non-core property related
income
Exceptional items (before tax)
Tax on exceptional items
Exceptional items (after tax)
£m
(8.9)
(0.4)
0.1
1.7
0.6
0.2
(6.7)
1.2
(5.5)
In FY23, the Group continued the Better
Greencore programme to support
the Group’s excellence cost efficiency
programmes and to unlock further cost
efficiencies by reducing organisational
complexity. The Group recognised a charge
of £8.9m in respect of work carried out in
the period (FY22: £16.1m). These exceptional
costs were offset by a number of exceptional
credits which included the profit on disposal
of Trilby Trading Limited of £0.1m and the
release of a legacy business liability of £1.7m.
Earnings per share
The Group’s basic earnings per share for
FY23 was 7.2 pence compared to 6.2 pence
in FY22. This was driven by a £3.6m increase
in profit attributable to equity holders and a
decrease in the weighted average number
of shares in issue in FY23 to 495.4m (FY22:
523.4m) due to the impact of the share
buyback programme.
Adjusted Earnings were £46.2m in the
period, £1.9m behind FY22 largely due to an
increase in Adjusted Operating Profit offset
by an increase in interest and tax costs.
Adjusted Earnings Per Share of 9.3 pence
compared to adjusted earnings per share of
9.2 pence in FY22.
Cash Flow and Net Debt
Adjusted EBITDA was £5.9m higher in
FY23 at £132.8m. The Group recognised
a net working capital inflow of £2.2m
(FY22: working capital inflow of £2.0m).
Maintenance Capital Expenditure of £26.6m
was recorded in the financial year (FY22:
£16.9m). The cash outflow in respect of
exceptional charges was £10.9m (FY22:
£13.6m).
Interest paid in the period was £17.6m (FY22:
£16.7m), including interest of £1.2m on lease
liabilities, an increase on FY22 reflecting
higher interest costs on borrowings in FY23.
The Group recognised tax paid of £2.7m
(FY22: £2.2m tax receipt) in the period. The
cash tax payable by the Group will remain
low due to the availability of full expensing
relief for capital expenditure. The Group’s
effective tax rate will be higher than the cash
tax rate in the medium term as deferred
tax liabilities will arise on assets where full
expensing relief has been claimed. The
deferred tax liabilities will release over the
useful life of the assets. Cash repayments
on lease liabilities decreased to £15.6m
(FY22: £17.3m). The Group’s cash funding
for defined benefit pension schemes was
£11.1m (FY22: £11.5m).
In FY23, the Group recorded Strategic Capital
Expenditure of £10.8m (FY22: £33.1m).
The Group did not make any equity dividend
cash payments in either period. The Group
made net share purchases of £30.1m in
FY23 reflecting the continuation of the
Group’s share buyback programme in
FY23 with £26.2m of shares bought back
in FY23 and the purchase of shares for the
Group’s employee share ownership scheme
of £3.9m. This compared to net share
purchases of £11.8m in FY22.
In September 2023, the Group completed
the sale of its interests in its edible oils
business, Trilby Trading Limited for a final net
cash consideration of £6.1m.
1. The Group uses Alternative Performance Measures (‘APMs’) which are non-International Financial Reporting Standards (‘IFRS’) measures to monitor the performance of
its operations and of the Group as a whole. These APMs along with their definitions and reconciliations to IFRS measures are provided in the APMs section on page 177.
Strategic Report | Directors’ Report | Financial Statements | Other Information £15.0m to 30 March 2024. Between
10 October 2023 and 24 November
2023, the Company purchased a total
of 4,907,006 ordinary shares under the
Buyback Programme, returning an
additional £4.5m in cash to shareholders.
Jonathan Solesbury
Interim Chief Financial Officer
27 November 2023
48
Greencore Group plc Annual Report and Financial Statements 2023
Operating and financial review continued
The Group’s Net Debt excluding lease
liabilities at 29 September 2023 was
£154.0m, a decrease of £26.0m compared to
the end of FY22.
Group recognised an actuarial loss in equity
reflecting the change in the value of the plan
assets to match the related obligation.
The decrease in the Group’s net pension
deficit was driven principally by net actuarial
losses particularly on the Irish scheme offset
by contributions paid by the Group. The
movement in the discount rate is driven by
the corporate bond rate. The UK scheme is
75% hedged for movements in gilt yields.
Separate to this IAS 19 Employee Benefits
valuation, the valuations and funding
obligations of the Group’s legacy defined
benefit pension schemes are assessed on
a triennial basis with the relevant trustees.
A full actuarial valuation was carried out on
the Irish scheme at 31 March 2022 and a full
actuarial valuation is ongoing with reference
to 31 March 2023 for the UK defined benefit
scheme. The Group expects the annual cash
funding requirement for all schemes to be
approximately £12m–£15m.
Return of value to shareholders
In May 2022, a £50m return of value to
shareholders over the next two years
was announced. The Group completed
£35.0m of share buyback programme to
29 September 2023, of which the total
cash returned in FY23 was £26.2m. On
10 October 2023, the continuation of
the Group’s share buyback programme
was announced up to a maximum of
Financing
As at 29 September 2023, the Group had
total committed debt facilities of £482.8m
and a weighted average maturity of 2.1 years.
These facilities comprised:
• a £340.0m revolving credit bank facility
with a maturity date of January 2026;
• a £50.0m bilateral bank facility with a
maturity date of January 2026;
• a £45.0m bank term loan facility with a
maturity date of June 2024; and
• £13.5m and $41.9m of outstanding
Private Placement Notes with maturities
ranging between June 2024 and June
2026.
At 29 September 2023 the Group had cash
and undrawn committed bank facilities of
£327.8m (FY22: £398.0m).
Subsequent to the financial year end, the
Group has refinanced its debt facilities with
a new five year £350m sustainability linked
revolving credit facility (‘RCF’), maturing in
November 2028 with the option to extend
for up to a further two years. The facility also
includes a £100 million accordion option
which provides additional potential financing
facilities. This new facility replaces the
existing £340m RCF that was due to mature
in January 2026. A £45m term loan due to
mature in June 2024 was also repaid in full as
part of this debt restructuring.
Pensions
All of the Group’s legacy defined benefit
pension schemes are closed to future
accrual. The net pension deficit relating to
legacy defined pension schemes, before
related deferred tax, at 29 September 2023
was £20.1m, £0.2m lower than the position
at 30 September 2022. The net pension
deficit after related deferred tax was £12.8m
(FY22: £10.4m), comprising a net deficit on
UK schemes of £28.3m (FY22: £44.5m) and
a net surplus on Irish schemes of £15.5m
(FY22: £34.1m).
In November 2022, the trustees of the Irish
legacy defined benefit scheme entered into
an annuity buy-in transaction to purchase
an insurance policy for the pensioner
liabilities, representing approximately 80%
of the liabilities of the scheme. This has
the benefit of de-risking the future of the
scheme. The insurance policy is treated as
a plan asset and the fair value of the policy
is determined to be the present value of
the related obligations. At the completion
of the buy-in of the insurance policy, the
49
Risks and risk management
MANAGING OUR RISKS
The Group recognises that effective risk management is critical to our success
and that like all businesses, we face a wide range of risks that could impede the
achievement of our vision and strategic objectives. A new Group Enterprise Risk
Management (‘ERM’) framework has been established to support informed decision-
making and to ensure that such risks are understood, evaluated, and mitigated.
In FY23, we conducted a comprehensive review of our ERM framework, introducing an enhanced risk strategy, process, and
governance arrangements.
Risk management strategy
Risk management process
The Group’s enhanced risk management strategy
acknowledges that effective risk management supports us
in achieving our strategy and delivering for our customers.
The new ERM framework is supported by a refreshed risk
process and methodology, with a standardised toolkit
supporting a four stage process:
The Board has ultimate accountability for reviewing and
monitoring the effectiveness of our risk management
systems and is committed to:
•
identifying, understanding, and assessing risks that
threaten the achievement of our strategy and objectives,
and responding to them appropriately;
• embedding risk management in all areas of our work;
•
recognising that focus must not only be on eliminating
risk, and that some risk taking to support the Group’s
ambitions may be appropriate;
• establishing a risk-aware culture to support informed
decision-making and ownership of risk throughout the
business;
• articulating a Statement of Risk Appetite to provide
direction and set boundaries on the amount or type
of risk that can be accepted throughout the Group;
effectively and efficiently prioritising the use of
resources to address the most significant risks;
• producing insightful and value-add risk reporting;
• monitoring progress and evaluating the effectiveness
of our approach to risk management; and
• ensuring that all colleagues understand their
responsibilities in relation to ERM.
Risk
strategy
Risk process
Governance and assurance
Stage 1: Risk identification uses a variety of approaches,
tools, and techniques to evaluate the business environment
and consider the risk events that could impede the
successful achievement of the Group’s or functions
objectives. Risks are assigned ownership and categorised
according to their nature.
Stage 2: Risk assessment takes place to support
prioritisation and decision-making, with an evaluation of
risk impacts and likelihoods in line with standard criteria,
and the documentation of the existing control environment.
Stage 3: Risk response activities are planned and pursued
for risks where the exposure is greater than the target risk
levels defined by our risk appetite, and will incorporate a
mix of actions aimed at reducing both the likelihood of the
risk materialising and its potential impacts.
Stage 4: Involves regular risk monitoring to track progress,
evaluate control effectiveness, and consider changes in
the risks or risk landscape, suitable reporting within a
governance framework to provide assurance across the
Group, and the escalation of significant risks according to
certain criteria.
This cycle is underpinned by a detailed evaluation and
understanding of the internal and external risk context to
ensure focus across each stage of the risk management
process, and is supported by ongoing communication and
consultation to ensure that it incorporates the views and
insights of key stakeholders across the business.
Strategic Report | Directors’ Report | Financial Statements | Other Information
50
Greencore Group plc Annual Report and Financial Statements 2023
Risks and risk management continued
Risk process and methodology
Risk monitoring,
reporting and
escalation
Stage 4
C ontext
St
a
g
e
1
Risk identification
Ongoing
communication
and consultation
Stage 2
Risk assessment
Risk response
3
e
g
Sta
Governance and assurance
Principal risks
Emerging risks
T
o
p
d
o
w
n
Group Risk Function
p
u
m
o
t
t
o
B
Functional risks
HR
Finance
Commercial
Operations
Transformation
and Strategy
Company
Secretarial
and Legal
Risk Oversight Committee
• Executive oversight of risk
management activities.
• Monitors principal, emerging and
functional risks.
• Directs risk mitigation activity in
•
line with strategy and risk appetite.
Fosters a risk-aware culture across
the Group.
Audit and Risk Committee
• Provides oversight of risk exposures
and risk management activities on
behalf of the Board.
• Provides challenge to management
on risk management activities.
• Advises the Board on risk strategy.
• Reviews and monitors effectiveness
of risk management systems.
Board
• Accountable for review and
monitoring of the effectiveness
of risk management systems.
• Defines Group strategy and
risk appetite.
The Group operates a combined top-down and bottom-up
risk management framework to ensure that the risk priorities
of our business leadership are defined and understood
across Greencore, and that risks identified within functions
are visible to our business leadership.
The ERM framework is overseen by the Group Risk
Function, who provide the Group with risk management
methodology, training, support, advice, and assurance
over all aspects of its risk management systems.
51
Governance and assurance cont.
Our risk appetite
Principal risks, defined as those most likely to have a
significant impact on Group-wide objectives, are identified
by the Group Executive Team.
Functional risks are identified and tracked across a range
of risk registers embedded within our core functions.
These are risks relevant to functional responsibilities and
objectives. This process is supported by risk champions and
risk advisors within each function, who are responsible for
guiding the risk identification and assessment processes,
ensuring rigorous risk reviews take place, and providing
regular reporting to the Group Risk Function.
Principal, emerging, and functional risks are reported to
and reviewed by a quarterly Risk Oversight Committee
(the ‘ROC’), made up of the full Group Executive Team and
Director Internal Audit and Risk. The remit of the ROC is
to provide management oversight of the suitability and
effectiveness of the Group’s risk management systems,
including the risk management policy, protocols, and
governance.
Overall accountability for reviewing and monitoring the
effectiveness of the Group’s risk management systems
remains with the Board, who also establishes the Group’s
strategy and risk appetite. The Board in part discharges
these duties through delegation to the Audit and Risk
Committee (the ‘ARC’). The ARC is responsible for
overseeing and advising the Board on the organisation’s
risk exposures, risk management strategy, and
effectiveness of risk management systems.
Emerging risks
As part of our overall risk assessment process, the Group
also captures and monitors emerging risks, defined as risks
that have a high degree of uncertainty, with unclear but
potentially far-reaching impacts.
The Group uses a diverse range of sources to gather
insights on the risk landscape and performs horizon
scanning, capturing relevant emerging risks and assessing
their potential impacts.
Current emerging risk themes include:
•
risks related to changes in consumer behaviour, which
may impact the success of our product portfolio and
category mix;
risks related to the long-term impacts of climate change
and extreme weather on our supply chain and operating
environments; and
risks related to the effects of disruptive technology,
including artificial intelligence, on our commercial
markets, operations, and workforce.
•
•
These emerging risks are monitored within the Group’s
broader ERM governance framework.
During FY23, the Group reviewed and refreshed our
Statement of Risk Appetite, in order to provide improved
direction on the amount or type of risk that can be
accepted throughout the Group. This is designed to support
informed decision-making, improve consistency across
governance, and assist in prioritisation.
At Greencore, our risk appetite is shaped by our
commitments to delivering profitable growth for
our stakeholders, having long-term relevance for our
customers, differentiating ourselves from our competitors
with excellence in everything we do, producing great
food with long-term sustainability, and placing our
people at the core.
We understand that taking calculated risks is essential
for growth, innovation, and the achievement of our long-
term strategic objectives, but that to do so, we must
make risk-informed decisions. Our preference is for
reduced risk and uncertainty, but we acknowledge that
some residual risk may be necessary and beneficial. We
always strive to ensure that risks are managed prudently
but are willing to accept risk where it can be carefully
managed, measured, and monitored. Therefore, we may
pursue options giving rise to risk if the potential rewards
outweigh the potential downsides.
There are some areas where we are willing to take more
risk than others and we have defined risk appetite
statements accordingly.
More averse to risk
More open to risk
Strategic
Commercial
People – Talent, culture
People – Safety, wellbeing,
equality, inclusion and diversity
Operations
Operational Excellence –
Product safety, cyber
security, sustainability
Financial
Legal, regulatory
and compliance
Our risk appetite is dynamic and will be updated as
necessary to reflect any significant changes in the context
in which we operate.
Strategic Report | Directors’ Report | Financial Statements | Other Information 52
Greencore Group plc Annual Report and Financial Statements 2023
Risks and risk management continued
Principal risks and uncertainties
In FY23, a full principal risks assessment exercise was conducted, resulting in a refined
and updated principal risk profile which is detailed below.
The Group’s risks and uncertainties continue to be influenced by its
external context and operating environment.
action across multiple sectors is impacting consumer spending
habits, whilst supply risks are further influenced by climate/weather
related disruption and geopolitical instability.
Inflationary pressure and price volatility persists across the food
industry and affects our cost base. The Group remains focused on
inflation recovery and we have continued to successfully work with
customers and supply partners to mitigate the ongoing impacts. In
addition, the ongoing cost of living crisis and associated industrial
The Group monitors such factors closely and is confident that our
key categories remain resilient and that our robust, agile commercial
and operational arrangements enable an effective response to a
dynamic risk environment.
Risk movement
Risk increased
Risk unchanged
Risk decreased
Strategic risks
Transforming our business
The Group continues to pursue an ambitious change programme to address the challenges we face and to build a
better business for customers, employees, and shareholders. Doing so requires focus and engagement across a broad
stakeholder group, strong leadership, effective resourcing, investment, and governance. Failing to deliver the aims of our
transformation could adversely impact the long-term performance of the Group.
Changes in FY23
Mitigations and controls
• We have continued to embed the organisational changes introduced
by our Better Greencore transformation programme, establishing a
functional, customer-centric operating model.
• We have implemented further reductions in the size of our indirect
colleague base, with associated fixed cost savings and successfully
delivered efficiency and value creation initiatives across commercial,
operational and other fixed costs.
• The Group Executive Team have clear ownership of
transformation activities, with clear Executive Team sponsors
for each pillar in place.
• Weekly Transformation Pillar Steering Committees and Group
Executive reviews take place as needed.
• Transformation governance and oversight is provided by our
Chief Strategy and Transformation Officer.
• Clear Operational Excellence and Technology Roadmaps for future
• A communication plan is in place from our Chief Executive Officer
strategic transformation have been developed.
• As we now move towards defining a new long-term vision and
strategy, there will remain risk related to the effective delivery of the
ongoing strategic change required.
(‘CEO’) down with engagement across the entire business to ensure
alignment around goals, shared purpose, and visibility of progress
and benefits.
• Regular tracking of financial benefits to ensure progress is
maintained.
Sustainability
The Group’s Better Future Plan, which provides a roadmap for our contribution to transforming the food system to have a
positive impact on people and planet, is a key part of our strategy and important to our stakeholders. Successful delivery
of these commitments will need to involve new ways of thinking and working commercially and operationally, a significant
investment in resources and the prioritisation of these ambitions. Failing to deliver on our commitments could impact the
future success of the Group and cause reputational damage.
Changes in FY23
Mitigations and controls
• A Plan Ownership Model, seen as key to unlocking action, has been
• A clear Sustainability Strategy is in place through the Greencore
established with clear business understanding and accountability and
high levels of engagement at all levels.
Better Future Plan, consisting of three interlocking pillars:
Sourcing with Integrity; Making with Care; and Feeding with Pride.
• This has enabled us to progress the development of delivery
roadmaps, several of which are now complete for priority areas.
• We have committed significant time and resources to upskilling,
leading to more capable sustainability leadership and informed
decision-making.
• We have enhanced governance, with increased Board oversight
introduced through a dedicated Sustainability Committee, and a
refreshed Sustainability Oversight Committee.
• A tightening regulatory environment (particularly regarding reporting)
and increased focus and scrutiny of sustainability agendas from banks
and insurers, is increasing the priority, risk, and focus across our
entire Better Future Plan. A Group Transparency Roadmap is being
developed which will provide a clear plan for disclosure, regulatory,
and reporting requirements for the next two years.
• Comprehensive governance programme in place, along
with detailed and regular monitoring of a wide array of
performance metrics. This includes a Sustainability Oversight
Committee, regular reviews by the Group Executive Team, and
a Sustainability Committee of the Board.
• Clear ownership and accountability structure across the
business including delivery plan ownership and Group
Executive Team sponsorship.
• Science-based targets established and approved by Science
Based Target initiative.
• Clear delivery roadmaps have been produced for priority areas
and are under development for all areas.
53
Risk movement
Risk increased
Risk unchanged
Risk decreased
Financial risks
Management of costs
Inflationary pressure together with any inefficiencies in operational processes or gaps in control systems may lead to an
unsustainable growth in overheads costs and negatively impact our financial performance.
Changes in FY23
Mitigations and controls
• FY23 saw the successful delivery of a significant cost reduction
• Comprehensive expenditure controls are in place including
programme, Better Greencore, which is a change programme to
drive efficiency and profit improvement that commenced in FY22.
Improved standardisation and granularity in reporting has been
implemented, allowing for increased oversight and monitoring.
•
defined purchase-to-pay processes, authority levels,
segregation of duties, and rigorous monitoring and oversight.
• Additional controls and approval processes in relation to
headcount cost.
• Detailed tracking and monitoring of inflationary pressures takes
place through budget processes and ongoing monitoring and
reporting.
• Defined commercial and operational targets tracked weekly
and monthly.
Demand shocks
Significant external events, such as pandemic, war, or natural disaster, could result in sudden and significant reductions in
customer and consumer demand, which could have a material impact on our financial performance.
Changes in FY23
Mitigations and controls
• The business is recovering well from the effects of the COVID-19
• The Group has the commercial agility to quickly respond to
pandemic and continues to have inherent commercial and
operational agility to respond effectively to external events.
• We have embarked on an exercise to augment existing business
changing customer needs and to rationalise product category,
range, and mix.
• Close working relationships with our customers and supply
continuity arrangements with a formalised Group Crisis Management
framework, to be developed and tested throughout FY24.
chains enable effective cooperation and collaboration in times
of disruption.
• A dispersed, diverse, broad national manufacturing network
provides agility to rationalise and move production if required.
• We have flexibility in our labour model enabling us to respond
to events as required.
Strategic Report | Directors’ Report | Financial Statements | Other Information
54
Greencore Group plc Annual Report and Financial Statements 2023
Risks and risk management continued
Principal risks and uncertainties continued
Risk movement
Risk increased
Risk unchanged
Risk decreased
People risks
High reliance on labour
We are reliant on high volumes of labour. An uncertain political, economic and social context, alongside wage inflation
pressures and the fast-paced and dynamic labour needs of the Group, could increase the costs of labour in unsustainable
ways and impact labour relations. This could have operational, commercial, and financial impacts across the Group.
Changes in FY23
Mitigations and controls
• An increase in industrial action across many sectors nationally,
together with cost of living and wage demand pressures, has
increased the risk of labour disputes and industrial action at
Greencore.
• We have flexibility in our labour model through proportional
use of agency workers to ensure agility and responsiveness to
front-line labour needs.
• Mature labour forecasting processes and systems enable
• We maintain ongoing dialogue with trade unions on pay negotiations
and actively prepare to limit the impacts of any potential industrial
action.
•
effective planning of labour needs.
Increasing automation in production processes reduces our
reliance on labour requirements.
• The development of our Operational Excellence transformation
• Development and training frameworks assist in retention and
strategy includes workstreams related to optimum operating models.
productivity.
• We are increasing in-house expertise in relation to technology and
• Regular wage benchmarking is in place to ensure that
automation.
colleagues are paid fairly.
• We maintain proactive and cooperative relationships with trade
unions.
• A dispersed, diverse, broad national manufacturing network
provides agility to rationalise and move production if required.
Recruitment and retention of key personnel
The ongoing success of the Group is dependent on attracting and retaining high quality senior management, with the
right skills, experience, commercial acumen and sector knowledge to effectively implement our strategy. Unacceptably
high loss of key personnel or challenges in recruitment into key positions could impact our performance.
Changes in FY23
Mitigations and controls
• Employee attrition across our senior management community was
• Regular salary benchmarking as part of our recently revised
higher than optimum levels in FY23.
reward framework ensures colleagues are paid fairly.
• Succession planning and other arrangements have limited the impact
of this colleague turnover, but we are committed to ensuring that
Greencore is and continues to be an attractive and rewarding place
to work.
• Multiple variable compensation incentive schemes including
ShareSave, annual bonuses, Performance Share Plan, and
restricted share awards, are in place to further incentivise
retention.
• The Group’s variable compensation schemes are anticipated to
contribute to improved retention.
• This year’s Pulse Engagement Survey showed further improvements
in employee engagement with results favourable to external
benchmarks.
• Comprehensive talent review and talent management
processes are embedded throughout the business.
• Mature succession planning structure is in place for senior roles.
• Senior management are subject to contractual provisions
including non-compete and non-solicitation clauses.
• We have well-established colleague engagement and
recognition initiatives including our Shine Awards, shared
purpose and strategy, community events, and a comprehensive
learning and development offer.
55
Risk movement
Risk increased
Risk unchanged
Risk decreased
Commercial risks
Competitor activity
The Group operates in highly competitive markets. Significant product innovations, technical advances and/or the
intensification of price competition by competitors, both direct manufacturing competitors and competitors of our
customers, could adversely affect the Group’s results.
Changes in FY23
Mitigations and controls
• The Group continues to monitor trends within the sector and invest
in competitor analysis and insights to inform decision-making and
commercial propositions.
• Extensive nationwide production and distribution network
provides the Group with a market-leading capacity and
capability.
• We have increased the level of quantitative data in the business to
• Close cooperative relationships, together with investment in
innovation and new product development, enables us to work
together with our customers on our product portfolio to meet
customer and consumer needs.
• Agile production capabilities and a broad product range enables
the Group to respond effectively and quickly to changing
customer needs.
• Comprehensive controls are in place around quality of product.
• A broad and balanced portfolio of customers ensures that
reliance on any single relationship is minimised.
ensure faster fact-based reporting and action planning.
• We have improved market share in our core sandwich business year-
on-year but we have seen declines in some of our other segments
driven by branded entrants and strategic business disposal decisions.
• An increasing cost/price focused competitive environment in FY23
has driven choices around business disposal to protect and drive
profitable volumes.
• We review our portfolio on an ongoing basis, and in FY23 have exited
some sales arrangements and gained others, continuing to grow our
core business through the launch of new options and propositions.
• We have also developed clear portfolio strategies that will allow us
to drive our performance and growth over the next three years, and
lead the market as innovators in the face of agile competition.
• This will also enable us to be successful in developing products to
meet and exploit emerging consumer trends.
Operational risks
IT systems
We rely heavily on information technology to support the business, which requires continuous investment and innovation.
Failure to modernise and standardise our IT estate may lead to inefficient operations, ineffective decision making, and an
inability to build and maintain competitive advantage, impacting our performance.
Changes in FY23
Mitigations and controls
• The Group has identified significant opportunities to improve
• Existing IT systems enable us to successfully deliver our
organisational efficiency through enhanced technology and we are
building a comprehensive roadmap of technology improvements to
realise these opportunities.
• This roadmap will make business easier for Greencore, streamlining,
•
standardising, and simplifying core processes.
In parallel, progress continues against opportunities identified as part
of our Better Greencore programme, with significant steps made to
standardise core systems, upgrade and consolidate onto our core
Enterprise Resource Planning platform, and improve our human
resources and logistics capabilities.
operational requirements, and our IT department ensure that
systems are supported.
• Technology risks are qualified and mitigated by a
comprehensive suite of general IT controls, aligned with
industry standards, and these controls are subject to internal
and external audit.
• A rolling programme of investment in our capability to maintain
currency of IT services, ensures that our systems continue to
support the business in achieving our objectives.
• A dedicated IT Operations Improvement team is in place,
focused on continual improvement of the IT estate.
IT risk management processes are well-established.
•
• Comprehensive and formal business partnering is in place
to identify priorities, evaluate gaps, and plan remediation
roadmaps.
• We have formal IT Disaster Recovery processes.
Strategic Report | Directors’ Report | Financial Statements | Other Information
56
Greencore Group plc Annual Report and Financial Statements 2023
Risks and risk management continued
Principal risks and uncertainties continued
Risk movement
Risk increased
Risk unchanged
Risk decreased
Operational risks continued
Cyber security
The cyber threat landscape is complex and constantly evolving. In common with most large organisations, we are exposed
to the risk of a cyber-attack that could threaten the availability and integrity of our systems, and the confidentiality of data.
Such attacks could cause significant business disruption and cause financial and reputational damage to the Group.
Changes in FY23
Mitigations and controls
• We take seriously the cyber security risk to our business operations
• Our dedicated IT Security team works in partnership with
and data, and we continue to invest significantly in our cyber security
defences, both technical and through awareness programmes for all
colleagues.
industry-leading cyber security partners to form a 24 x 7 x 365
Security Operations Centre, which incorporates best-in-class
security tooling.
• Controls and protections have been enhanced across multiple areas
of cyber security threat, including best-in-class tooling to protect
against phishing and unauthorised access to IT assets.
• A rolling programme of investment in our capability to maintain
currency of IT services is in place, ensuring that our systems remain
fully supportable.
• To seek assurance on our cyber security controls, which are
aligned with global standards, the IT department engage with
expert partners to conduct a rigorous schedule of audit and
testing, which includes regular penetration tests and ‘red team’
exercises.
• Comprehensive policies, standards, procedures, and risk
management frameworks are in place.
• Mandatory security awareness training and assessments
required for all users.
Environmental impact
The Group has significant manufacturing operations and an obligation to minimise the impact of these activities on the
environment. Failure to sufficiently monitor and manage operational activities to minimise the environmental impacts
could lead to business disruption, and cause financial and reputational damage to the Group.
Changes in FY23
Mitigations and controls
• We continue to treat the management and mitigation of our
• There are defined accountabilities with named responsible
•
environmental impact as a priority.
In-house waste monitoring policies have been revised and enhanced,
with improvements to our systems for monitoring, managing, and
escalating the results of testing.
• Waste management infrastructure improvements have been
delivered across a range of production sites, and are in progress in
other parts of our production network.
subsidiary company directors on all environmental permits and
Regulation 61 submissions.
• A dedicated infrastructure is in place in our production sites for
managing environmental impacts, including effluent treatment
plants and dissolved air flotation plants.
• Comprehensive in-house and third-party waste product
monitoring ensures ongoing assurance.
Operational Excellence and Health & Safety
The Group’s strategy and future success is underpinned by Operational Excellence. Any failure to deliver this across all
operational and supporting activities could impede delivery of our strategic ambitions and impact future performance.
Part of this is to ensure that Operational Excellence is delivered in a way that maintains our robust safety and risk systems,
as ensuring the health and safety of our colleagues is of paramount importance at Greencore. Safety failures could result
in harm to individuals as well as reputational and potential financial damage.
Changes in FY23
Mitigations and controls
• We recognise Operational Excellence as a key enabler for our future
strategic success and are embarking on the development of an
enterprise-wide world class operation management model.
• Manufacturing Excellence is delivered through standardised
processes, tools, and techniques to optimise labour usage and
waste product.
• Business improvement opportunity and risk have been evaluated in
• Bespoke technology has been implemented to inform real-time
depth.
• New leadership in Operational Excellence is in place, and the design
of the infrastructure and resource required to drive further progress
has been completed.
decision-making within production operations to support
performance target excellence.
• Broad business-intelligence is embedded as part of operational
delivery.
• Comprehensive health and safety processes, procedures, and
training are in place.
• Rigorous monitoring protocols including annual health and
safety audits and operational physical inspections provide
assurance of ongoing control and compliance.
• Competent health and safety persons are in place at all sites.
• Site risk assessment processes are in place across a
comprehensive range of health and safety hazards and controls.
57
Risk movement
Risk increased
Risk unchanged
Risk decreased
Operational risks continued
Product contamination
We produce a large volume of food annually and there are risks of product contamination at a Greencore manufacturing
facility or one of our approved suppliers, through either accidental or deliberate means. This may lead to potential harm
to consumers and result in potentially significant financial, reputational, and/or legal impacts on the Group. In addition,
product recalls and withdrawals would require significant resource investment.
Changes in FY23
Mitigations and controls
• We continue to maintain industry-leading food safety and traceability
processes and procedures and we are proud of our strong track
record of consistent highest level audit outcomes which have
continued in FY23.
• Best practice site quality management systems are in place
with industry standard policies, procedures, and control
environments.
• A substantial training regime ensures ongoing excellence in
• An internal audit of the Group’s Technical function and food safety
colleague awareness.
monitoring processes was conducted as part of FY23’s Internal Audit
plan, providing assurance that risks are being well managed.
• A new food quality and safety training package has been deployed to
further enhance product safety culture.
• Comprehensive assurance is provided by extensive internal
and external independent monitoring and audits, including
unannounced regulator, third-party consultant, and customer
site visits.
• Rigorous supply chain quality assurance is in place, including
independent and in-house audits.
• We have a robust allergen-management programme and
product stringent testing regime.
• Comprehensive and documented product recall procedures
are in place, including mock recall exercises and crisis plans.
• Formal horizon scanning process established to generate
insight on industry trends, threat/supply issue intelligence, and
to ascertain requirement for control or testing changes.
Legal and compliance
Our activities are subject to a complex and constantly evolving regulatory landscape, particularly in the areas of food
safety and environmental protection. Failure to comply with such regulations may lead to serious financial, reputational
and/or legal risk.
Changes in FY23
Mitigations and controls
• We remain committed to complying with all industry-specific and
•
wider regulatory requirements and upholding the highest standards
of corporate governance.
In-house and external legal and regulatory compliance
expertise is in place to interpret regulatory requirements and
consult, guide, and advise the business as needed.
• Progress is being made on augmenting existing strong specialist
compliance functions with a new Group Compliance Framework
to promote alignment in processes, consistency in approach
to compliance governance, and a more holistic assurance
methodology.
• Comprehensive legal, regulatory, and statutory compliance
control and management functions are in place.
• Broad assurance and monitoring is provided across a range of
regulatory compliance areas, including assurance received from
third-party independent, regulator, and customer inspections
and audits.
• Expert second-line-of-defence functions are being established
in all key compliance areas, with external networks sharing
information and best practice.
• We have access to industry and legal literature and trade bodies
to keep up to date with the changing regulatory landscape.
Strategic Report | Directors’ Report | Financial Statements | Other Information
Viability statement disclosure
In line with the Code Provision 31, the Directors have carried out
a rigorous review of the prospects of the current business and its
ability to meet its liabilities as they fall due over the medium-term. In
undertaking this review, the Directors concluded that a three-year
timeframe continues to be an appropriate period for this assessment
given that this is the key period of focus within the Group’s strategic
planning process and is a typical period for visibility of commercial
arrangements with the Group’s customers. The objectives of the
annual strategic planning process are to consider the key strategic
choices facing the Group and to build a consolidated financial model
with various scenarios taking into account the principal risks facing
the Group which may threaten the Group’s solvency, liquidity, cash
flow, future performance and business model.
Assumptions are built for the income statement with a flow through
to the balance sheet and cash flow. These are rigorously tested by
management and by the Directors. Sensitivity analysis is applied to
reflect the potential impact of some of the principal strategic and
commercial risks of the Group as described on pages 52 to 57. These
risks could affect the level of sales, profitability and cash generation
of the Group and the amount of capital required to deliver them. The
Group has reflected the new refinancing that was obtained by the
Group in November 2023 as part of the analysis. Based on the results
of this analysis, the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as
they fall due over the three year period of their assessment.
58
Greencore Group plc Annual Report and Financial Statements 2023
Risks and risk management continued
Going concern and viability statement
Going concern
The Directors, after making enquiries, have a reasonable expectation
that the Group has adequate resources to continue operating as a
going concern for the foreseeable future.
In the current period, the Group continued to operate in a complex
trading environment linked to ongoing challenges with inflation.
Accordingly, the Directors have considered a number of scenarios
for the next 18 months from the commencement of FY24. These
scenarios consider the potential impact of inflation on consumer
spending, along with consideration of under recovery of targets set
out under the Group’s commercial and operational initiatives. The
impact on revenue, profit and cashflow are modelled, including the
consequential impact on working capital.
The scenarios assumed by the Group are as follows:
• a base case assuming internally approved budget and strategic
plans, which includes amounts for near term climate change
related expenditure;
• a downside scenario which assesses the potential impact of
inflation on consumer spending and corresponding impact on
volume, along with under recovery of targets set out under the
Group’s commercial and operational initiatives; and
• a severe downside scenario which includes further potential
impacts on volume due to the inflationary environment and
further under recovery of targets set out under the Group’s
commercial and operational initiatives.
In each scenario, the Group would employ mitigants within its
control, which would include a reduction in non-business critical
capital projects and other discretionary cash flow items.
While the Group is in a net current liability position of £193.9m
(2022: £128.7m) at 29 September 2023, the Group has retained
financial strength and flexibility, with cash and undrawn committed
bank facilities of £327.8m at 29 September 2023 (September 2022:
£398.0m).
Subsequent to the year end, the Group has refinanced its debt
facilities with a new five year £350m sustainability linked revolving
credit facility (‘RCF’), maturing in November 2028 with the option to
extend for up to a further two years. This new facility replaces the
existing £340m RCF that was due to mature in January 2026. A £45m
term loan due to mature in June 2024 was also repaid in full as part
of this debt restructuring.
The Group is satisfied that there is sufficient headroom in the
financial covenants under facilities for each scenario.
Based on these scenarios and the resources available to the Group,
the Directors believe the Group has sufficient liquidity to manage
through a range of different cashflow scenarios over the next 18
months from the year end date. Accordingly, the Directors adopt the
going concern basis in preparing these Group Financial Statements.
59
Group Executive Team
LEADING BY EXAMPLE
TO DRIVE EXCELLENCE
Nigel Smith
Chief Strategy and
Transformation Officer
Nigel is Chief Strategy and
Transformation Officer, with
responsibility for development
and integration of Group
strategy and our broader
change agenda.
He joined Greencore in 2017,
and has held a variety of
roles supporting the strategic
development of the Group,
before taking on executive
leadership of strategy
since 2021. Prior to joining
Greencore, Nigel worked as
a strategy consultant with
McKinsey & Company, and in
multiple public policy positions
within European Union
institutions.
Nigel is an alum of Trinity
College Dublin, Sciences-
Po in Paris and the College
d’Europe in Bruges. He has also
completed Executive Education
at the UCD Smurfit School.
Dalton Philips
Chief Executive Officer
Andy Parton
Chief Commercial Officer
Guy Dullage
Chief People Officer
Dalton joined as Chief
Executive Officer in September
2022 and has overall
responsibility for running the
business, driving shareholder
value and developing strong
relationships with stakeholders.
Dalton’s roles, prior to joining
Greencore include chief
executive of daa plc, the
global airports and travel retail
group, chief executive of Wm
Morrison plc, then a FTSE 100
company and the UK’s fourth
largest supermarket chain,
chief executive of luxury goods
retailer Brown Thomas Group,
and chief operating officer
of Canadian retailer Loblaw
Companies Limited. Dalton also
served as a senior advisor to the
Boston Consulting Group.
He started his career with
Jardine Matheson followed by
Walmart.
Lee Finney
Chief Operating Officer
Lee joined Greencore in
October 2022 as Chief
Operating Officer. He is the
executive accountable for
technology, sustainability, and
the end-to-end supply chain.
He has extensive experience in
transforming the operational
performance of global
businesses, having held vice
president, chief transformation
officer and chief supply officer
roles in the UK, Europe, North
America and Australasia.
Lee has an MBA, was awarded
the Advanced Management
Program, and has completed
executive programmes at MIT
and Stanford, USA.
Andy is Chief Commercial
Officer, responsible for setting
and delivering the commercial
strategy and agenda. The role
covers marketing, insights and
category management, product
development and management,
sales and procurement.
Prior to this Andy was Business
Director for our Food to Go
business. Andy joined Greencore
in 2014 having previously held
senior commercial positions in Aldi
and PepsiCo.
Guy is Chief People Officer and is
responsible for human resources
across the Group. Prior to this,
Guy served as HR Director for the
Prepared Meals business.
Guy joined Greencore in 2015.
Previously, he held a variety of
senior HR roles in the UK and
Europe, with the majority of
his experience over this time
within the manufacturing sector.
Guy has also held a number of
directorships, board and pension
trustee roles during his career.
Guy became a fellow of the CIPD
in 2014.
Damien Moynagh
Group General Counsel and
Company Secretary
Damien joined Greencore in
November 2022 and is responsible
for leading Greencore’s Legal and
Company Secretariat functions.
With over 20 years’ experience
as a corporate/M&A lawyer and
senior executive in Europe, the
US and Asia, Damien was most
recently general counsel and
company secretary of FTSE-listed
UDG Healthcare plc, responsible
for its legal, corporate secretarial,
risk, compliance, quality and
sustainability functions. Prior
to this, Damien practiced at
Freshfields Bruckhaus Deringer
and Maples and Calder.
Educated at University College
Dublin and Université Toulouse
Capitole, he has also completed
executive education programmes
at Cambridge University and
Columbia University.
Jonathan Solesbury
Interim Chief Financial Officer
Jonathan was appointed as
Interim Chief Financial Officer
with effect from 15 June 2023.
The Chief Financial Officer
is primarily responsible for
managing the financial affairs
of the Company and optimising
its financial performance. The
Chief Financial Officer is also
responsible for Internal Audit
and risk management as well as
the Company’s tax affairs.
Jonathan has extensive
experience in senior finance
roles in both the food and
beverage industries, including
one year as chief financial
officer at ARYZTA, three years
as group chief financial officer
with C&C Group plc and 22
years with SABMiller plc.
Strategic Report | Directors’ Report | Financial Statements | Other Information 60 Greencore Group plc Annual Report and Financial Statements 2023
Chair’s introduction to corporate governance
DEVELOPING
NEW WAYS OF
WORKING
“My first year as Board Chair has been largely
focused on the refreshment of the Board and
its Committees, and developing new ways of
working.”
Compliance with the Code
The Directors present their report and Financial
Statements for the year ended 29 September
2023. The Directors’ Report (this ‘Report’) is
contained on pages 60 to 113.
The 2018 UK Corporate Governance Code
(the ‘Code’), which is available on the
Financial Reporting Council’s website,
www.frc.org.uk, continued to be the standard
against which we measured ourselves in FY23.
This letter explains how the Group has applied
the principles and complied in full with the
provisions of the Code during the year.
Corporate governance in FY23
My first year as Board Chair has been largely
focused on the refreshment of the Board and
its Committees and developing new ways of
working.
FY23 has seen substantial change to Board
membership. Dalton Philips was appointed by
the Board as Chief Executive Officer (‘CEO’) at
the end of FY22. In November 2022 Damien
Moynagh was appointed by the Board as Group
General Counsel and Company Secretary. I was
appointed to the Board in December 2022 and
became Board Chair in January 2023 when
Gary Kennedy, the Group’s esteemed past
Chair, retired from the Board.
Helen Weir and Paul Drechsler stepped down
as Non-Executive Directors as of December
2022 and January 2023, respectively.
In September 2023, the Group announced
that Catherine Gubbins had been appointed
to the role of Executive Director and Chief
Financial Officer (‘CFO’) and would take
up her role in early 2024, replacing Emma
Hynes who stepped down from the Board as
Executive Director and CFO in May 2023.
John Amaechi and Sly Bailey have advised
the Board that they will not be seeking re-
election at the 2024 Annual General Meeting.
This is discussed further in the Report of the
Nomination and Governance Committee.
The Board and Committee evaluation
for FY23 showed that good progress had
been made following implementation
of outcomes from the FY21 and FY22
evaluations. Further details on the
effectiveness review are on page 77.
Our priority as a Board was to ensure
open and transparent communications
with Dalton, in his first year as CEO, and
the Group Executive Team, on Board
expectations. In addition to this, the
Board agreed on new ways of working by
streamlining corporate governance initiatives
to promote more effective decision-making.
Recognising the importance of driving
sustainable business practices, the Board
formed a Sustainability Committee to drive
this agenda forward. The membership of
other Board Committees was also refreshed.
We built our Board strength with the
appointments of Alastair Murray and
Harshitkumar (Hetal) Shah, in February 2023
and April 2023 respectively, both of whom have
strong financial and food industry experience.
The work of our Workforce Engagement
Director, Sly Bailey, continued during the
year. Information on how Sly connected with
our people during the year can be found on
pages 72 and 73.
Throughout my first year as Chair I have
endeavoured to promote continuing Board
engagement with our people through Group
site visits, allowing valuable insight into the
day-to-day business which helps shape
discussions in the boardroom.
Priorities for FY24
The Board incorporates the Group’s purpose
‘Making every day taste better’ in its decision-
making process as it continues to strive for
better. Our objective remains unchanged – it
is to continue to deliver value and to create
a positive and sustainable impact for all our
stakeholders.
The Board is focused on medium
to long-term strategic priorities and
remains confident that the Group has
stable foundations to create value for all
stakeholder groups going into FY24 and
beyond.
We will also maintain focus on colleague
sentiment and culture, as well as our
engagement with other stakeholders.
I would like to thank my Board colleagues,
past and present, for their ongoing
commitment and support since joining the
Board and during my first year as Board
Chair.
Leslie Van de Walle
Board Chair
27 November 2023
61
Board diversity as at 29 September 2023
By gender
By role
By tenure
44%
56%
11%
89%
11%
11%
33%
45%
Female
Male
Executive
Non-Executive
<1 year
1-5 years
5-10 years
>10 years
Number of scheduled
meetings in FY23
Scheduled Board meeting attendance
in FY23
18
96%
Number of new Directors
appointed in FY23
Independence of the Board excluding
the Chair as at the end of FY23
3
88%
Read our Report of the Nomination and Governance Committee (on pages 78 to 81)
Directors and scheduled Board meeting attendance during FY23
Compliance with the UK Corporate
Governance Code
The Company applied the principles of the 2018 UK
Corporate Governance Code (the ‘Code’) for the
financial year ended 29 September 2023.
Available from www.frc.org.uk
The Board are pleased to report that the Group
complied with the provisions of the Code for the
financial year ended 29 September 2023.
Further information on these governance matters can
be found as follows:
Director
John Amaechi1
Sly Bailey
Linda Hickey
Anne O’Leary
Alastair Murray2
Dalton Philips
Helen Rose
Harshitkumar (Hetal) Shah3
Leslie Van de Walle4
Former Directors who served during FY23
Director
Paul Drechsler5
Emma Hynes6
Gary Kennedy 7
Helen Weir8
Number of
scheduled Board
meetings held
Board meetings
attended
8
8
8
8
5
8
8
4
7
7
8
8
8
4
8
8
4
7
Board leadership, culture and
company purpose
See more on page 64
Division of responsibilities
See more on page 74
Composition, succession
and evaluation
See more on page 76
Scheduled
Board meetings
held
Scheduled
Board meetings
attended
Audit, risk and internal control
2
6
2
1
2
6
1
1
See more on page 82
Remuneration
See more on page 88
1. John Amaechi was unable to attend a meeting due to illness. Having read the papers,
he communicated his views on the business of the meeting to the Chair.
2. Alastair Murray was appointed to the Board on 1 February 2023. Alastair was unable to
attend a meeting due to prior business commitments. Having received the papers,
he communicated his views on the business of the meeting to the Chair.
3. Hetal Shah was appointed to the Board on 1 April 2023.
4. Leslie Van de Walle joined the Board on 1 December 2022.
5. Paul Drechsler retired from the Board on 26 January 2023, following the conclusion
of the 2023 Annual General Meeting.
6. Emma Hynes stepped down from the Board on 31 May 2023.
7. Gary Kennedy was unable to attend one meeting due to an illness. Gary retired from the
Board on 26 January 2023, following the conclusion of the 2023 Annual General Meeting.
8. Helen Weir retired from the Board on 31 December 2022.
Strategic Report | Directors’ Report | Financial Statements | Other Information 62
Greencore Group plc Annual Report and Financial Statements 2023
Board of Directors
OUR BOARD
OF DIRECTORS
Leslie Van de Walle
Dalton Philips
BA, MBA
John Amaechi
OBE, BSc
Sly Bailey
Linda Hickey
BBS
Alastair Murray
MA, MBA, FCMA
Anne O’Leary
CDir
Helen Rose
BSc, FCA
Harshitkumar (Hetal)
Damien Moynagh
BCL, DEUE
Shah
BS, CIMA
Non-Executive Director
Board Chair (Aged 67)
Appointed as Non-Executive
Director and Chair Designate
on 1 December 2022. Leslie
became Board Chair on
26 January 2023.
Leslie joined Greencore in
December 2022 bringing a
wealth of extensive leadership
and non-executive and chair
experience across multiple
sectors. Leslie has a deep
knowledge of the food
industry having held previous
positions at Danone, Cadbury
Schweppes and United
Biscuits, where he served as
group chief executive officer.
Leslie has held multiple non-
executive roles throughout
his career including currently
serving as the chair of the
Robert Walters Group and
chair of their nomination
committee, having previously
served as chair between 2012
and 2018. He has held various
non-executive roles and was
previously chair of Euromoney
Institutional Investor plc and
SIG plc, as well as deputy chair
and a non-executive director
and chair of the nomination
committee at Crest Nicholson
Holdings plc, a non-executive
director of HSBC UK Bank
plc and senior independent
director and chair of the
remuneration committee of
DCC plc.
Committee membership
Chief Executive Officer
(Aged 55)
Appointed as Chief Executive
Officer with effect from
26 September 2022.
Non-Executive Director
(Aged 53)
Appointed as Non-Executive
Director with effect from
1 February 2021.
Dalton joined Greencore
on 26 September 2022.
Dalton started his career with
Jardine Matheson followed by
Walmart before moving into
roles including chief executive
of daa plc, the global airports
and travel retail group, chief
executive of Wm Morrison
plc, then a FTSE 100 company
and the UK’s fourth largest
supermarket chain, chief
executive of luxury goods
retailer Brown Thomas Group,
and chief operating officer
of Canadian retailer Loblaw
Companies Limited. Dalton
has also previously served as
a senior advisor to the Boston
Consulting Group.
Dalton is currently serving as
a non-executive director of
IBEC CLG.
Dalton has a BA from
University College Dublin, an
MBA from Harvard University,
and an honorary Doctorate of
Management from Bradford
University.
John brings insight to
Greencore having actively
worked in inclusive leadership
and building high-performing
teams. John is a respected
organisational psychologist,
executive coach and is the
founder and chief executive
officer of APS Intelligence
Ltd, a talent and leadership
development firm. In
addition, John is a leadership
training partner with the
National Health Service and
is currently serving on the
Lloyd’s of London culture
advisory group. John has
previously been a member of
the Inclusive Advisory Panel
at Tesco, the Diversity and
Inclusion Board at Sanofi and
the Inclusive Leadership Board
for KPMG UK.
John is a Chartered Scientist,
a Chartered Fellow of
the Chartered Institute of
Personnel and Development,
and a Fellow of the Royal
Society for Public Health. John
is currently a research fellow at
the University of East London.
Non-Executive Director
(Aged 61)
Appointed as Non-Executive
Director with effect from
1 February 2021.
Linda brings extensive
corporate experience and
knowledge to the Board
having spent her executive
career in stockbroking and
investment banking. Linda
previously worked at NCB
Stockbrokers and Merrill
Lynch, before serving as
head of corporate broking at
Goodbody Stockbrokers for
15 years.
Linda is a non-executive
director of Kingspan
Group plc, a global leader
in insulation and building
envelope solutions, where
she serves as senior
independent director, worker
relations director, chair of the
remuneration committee and
a member of the nominations
committee. Linda is also a
non-executive director of
Cairn Homes plc where she is
remuneration committee chair
and a member of the audit
and risk committee. She is also
currently acting as vice chair
of Quanta Capital’s advisory
board and has previously
served as chair of the Irish
Blood Transfusion Service.
Non-Executive Director
Senior Independent
Director (Aged 61)
Appointed as Non-Executive
Director with effect from
17 May 2013 and Senior
Independent Director with
effect from 14 December 2017.
Sly is an experienced executive
having held several listed and
private board roles including
serving as a non-executive
director of Ladbrokes plc and
EMI plc, where she served
as both senior independent
director and chair of the
remuneration committee.
She has also served as a non-
executive director and chair of
the remuneration committee
for the Press Association. Sly
currently serves as a non-
executive director of IPSX
Group Limited where she is
also chair of the remuneration
committee and a member of
the nomination committee.
Sly previously served as chief
executive officer for one of the
UK’s largest media companies,
Trinity Mirror plc, for almost 10
years. She has also previously
served as chief executive
officer of IPC Media.
Sly’s broad knowledge
spanning a variety of sectors
provides her with a deeper
understanding of different
markets and business
circumstances underpinning
her appointment as Senior
Independent Director. Sly’s
strong interest in employee
related matters has been
invaluable in her role as
Workforce Engagement
Director.
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Group General Counsel
(Aged 62)
(Aged 56)
(Aged 58)
(Aged 51)
Appointed as Non-Executive
Appointed as Non-Executive
Appointed as Non-Executive
Appointed as Non-Executive
Director with effect from
Director with effect from
Director with effect from
Director with effect from
1 February 2023.
1 February 2021.
11 April 2018.
1 April 2023.
and Company Secretary
(Aged 46)
Appointed as Group General
Counsel and Company
Secretary with effect from
7 November 2022.
Alastair joined Greencore in
February 2023 and brings
extensive food industry and
financial experience having
previously held the role of
chief financial officer and
director of Premier Foods plc
Anne brings extensive
experience across a variety
of sectors including digital
integrations, data analytics,
Helen has significant
operational, financial, risk
Hetal joined Greencore in
Damien brings over 20 years’
April 2023. Hetal has a strong
experience as a corporate
and UK retail experience and
record as a senior finance
previously held senior finance
professional with significant
lawyer and senior executive
across Europe, the US and
cultural change programmes,
roles at Dixons, Forte, Safeway
experience gained in large,
Asia. Damien was responsible
and strategic acquisitions and
partnerships. Anne previously
and Lloyds Banking Group
over a 30-year executive
international groups and has
for the legal and corporate
proven leadership credentials.
secretarial functions, as well
Hetal has held several finance
as the risk, sustainability,
roles in both publicly listed and
quality and compliance
private organisations, including
functions, in his previous
a 17-year career at Cadbury
plc where he held finance
director roles spanning the
UK, US, Asia and Africa, and
role as general counsel and
company secretary of FTSE
250 listed UDG Healthcare
plc. Prior to this, Damien acted
where he was also responsible
as chief operating officer and
until September 2019. Alastair
served as chief executive
career.
is a chartered management
accountant having financial,
property, and IT experience
across a number of listed
officer of Vodafone Ireland
for nine years before joining
Meta in her current role as vice
president of the mid-market
companies including Premier
business division for the EMEA
Foods plc, Dairy Crest plc and
region. Prior to this she acted
Helen brings significant
change leadership and
transformation experience
gained from her roles as
retail integration director at
Lloyds Banking Group and
as chief operating officer
at TSB Banking Group plc.
The Body Shop International
plc. In addition to the above
Alastair has a proven track
record in corporate strategy,
restructuring and M&A. Alastair
is a non-executive director
and chairs the audit and risk
committee of McBride plc,
a British-based business
manufacturing own brand
household goods. Alastair is
also serving as an independent
member of the audit and risk
committee for the Department
for Education in England.
as managing director of BT
Ireland.
Anne previously served as
a non-executive director of
Vodacom Group Ltd. She also
Helen has a probing focus on
cyber security, risk matters,
and internal controls. She is
served as chair of Goal Global
a qualified executive coach
and as president of the Dublin
and mentor and understands
Chamber of Commerce. Anne
the importance of building
is currently a board member
of IBEC CLG, a business and
employer association for
a diverse talent pipeline.
Helen has an ongoing
interest in sustainability, her
organisations based in Ireland
leadership and appetite to
and Ludgate, an Irish non-
drive the Group’s agenda in
profit enterprise facilitating job
this area has been integral
for leading transformational
projects across supply chain,
finance, IT and strategy in
various locations. Hetal is
currently serving as the chief
financial officer for Europe
at Belron International, a
portfolio company of Clayton,
Dubilier & Rice. In addition to
his financial experience, Hetal
brings experience in corporate
strategy and M&A and
operational improvements.
general counsel at Sysnet
Global Solutions (now Viking
Cloud), a fast-growing global
technology business.
Damien trained and practiced
as a corporate/M&A lawyer
with Freshfields Bruckhaus
Deringer in their London,
Tokyo and New York offices
before moving to Maples and
Calder’s Dublin office and has
extensive experience advising
global clients on public and
private large-scale multi-
jurisdictional transactions. He
has also completed executive
education programmes
most recently at Cambridge
University (in sustainability
management) and Columbia
University (in leading strategic
change).
growth via digital technology
and remote working hubs,
and the Economic and Social
Research Institute, an Irish
research institute focusing
on the areas of sustainable
economic growth and social
progress.
to the establishment of the
Sustainability Committee.
Helen is deputy chair of
Compton Varney and a
member of their finance and
audit committee.
Helen is a fellow of the
Institute of Chartered
Accountants in England and
Wales, having trained with
Coopers & Lybrand.
63
Board Committees
Audit and Risk
Nomination and Governance
Remuneration
Sustainability
Committee Chair
Leslie Van de Walle
Dalton Philips
BA, MBA
John Amaechi
OBE, BSc
Sly Bailey
Linda Hickey
BBS
Alastair Murray
MA, MBA, FCMA
Anne O’Leary
CDir
Helen Rose
BSc, FCA
Harshitkumar (Hetal)
Shah
BS, CIMA
Damien Moynagh
BCL, DEUE
Non-Executive Director
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
(Aged 55)
(Aged 53)
Senior Independent
(Aged 61)
Appointed as Chief Executive
Appointed as Non-Executive
Officer with effect from
26 September 2022.
Director with effect from
1 February 2021.
Appointed as Non-Executive
Director with effect from
1 February 2021.
Non-Executive Director
(Aged 62)
Appointed as Non-Executive
Director with effect from
1 February 2023.
Non-Executive Director
(Aged 56)
Appointed as Non-Executive
Director with effect from
1 February 2021.
Non-Executive Director
(Aged 58)
Appointed as Non-Executive
Director with effect from
11 April 2018.
Non-Executive Director
(Aged 51)
Appointed as Non-Executive
Director with effect from
1 April 2023.
Alastair joined Greencore in
February 2023 and brings
extensive food industry and
financial experience having
previously held the role of
chief financial officer and
director of Premier Foods plc
until September 2019. Alastair
is a chartered management
accountant having financial,
property, and IT experience
across a number of listed
companies including Premier
Foods plc, Dairy Crest plc and
The Body Shop International
plc. In addition to the above
Alastair has a proven track
record in corporate strategy,
restructuring and M&A. Alastair
is a non-executive director
and chairs the audit and risk
committee of McBride plc,
a British-based business
manufacturing own brand
household goods. Alastair is
also serving as an independent
member of the audit and risk
committee for the Department
for Education in England.
Anne brings extensive
experience across a variety
of sectors including digital
integrations, data analytics,
cultural change programmes,
and strategic acquisitions and
partnerships. Anne previously
served as chief executive
officer of Vodafone Ireland
for nine years before joining
Meta in her current role as vice
president of the mid-market
business division for the EMEA
region. Prior to this she acted
as managing director of BT
Ireland.
Anne previously served as
a non-executive director of
Vodacom Group Ltd. She also
served as chair of Goal Global
and as president of the Dublin
Chamber of Commerce. Anne
is currently a board member
of IBEC CLG, a business and
employer association for
organisations based in Ireland
and Ludgate, an Irish non-
profit enterprise facilitating job
growth via digital technology
and remote working hubs,
and the Economic and Social
Research Institute, an Irish
research institute focusing
on the areas of sustainable
economic growth and social
progress.
Helen has significant
operational, financial, risk
and UK retail experience and
previously held senior finance
roles at Dixons, Forte, Safeway
and Lloyds Banking Group
over a 30-year executive
career.
Helen brings significant
change leadership and
transformation experience
gained from her roles as
retail integration director at
Lloyds Banking Group and
as chief operating officer
at TSB Banking Group plc.
Helen has a probing focus on
cyber security, risk matters,
and internal controls. She is
a qualified executive coach
and mentor and understands
the importance of building
a diverse talent pipeline.
Helen has an ongoing
interest in sustainability, her
leadership and appetite to
drive the Group’s agenda in
this area has been integral
to the establishment of the
Sustainability Committee.
Helen is deputy chair of
Compton Varney and a
member of their finance and
audit committee.
Helen is a fellow of the
Institute of Chartered
Accountants in England and
Wales, having trained with
Coopers & Lybrand.
Hetal joined Greencore in
April 2023. Hetal has a strong
record as a senior finance
professional with significant
experience gained in large,
international groups and has
proven leadership credentials.
Hetal has held several finance
roles in both publicly listed and
private organisations, including
a 17-year career at Cadbury
plc where he held finance
director roles spanning the
UK, US, Asia and Africa, and
where he was also responsible
for leading transformational
projects across supply chain,
finance, IT and strategy in
various locations. Hetal is
currently serving as the chief
financial officer for Europe
at Belron International, a
portfolio company of Clayton,
Dubilier & Rice. In addition to
his financial experience, Hetal
brings experience in corporate
strategy and M&A and
operational improvements.
Director (Aged 61)
Appointed as Non-Executive
Director with effect from
17 May 2013 and Senior
Independent Director with
effect from 14 December 2017.
Board Chair (Aged 67)
Appointed as Non-Executive
Director and Chair Designate
on 1 December 2022. Leslie
became Board Chair on
26 January 2023.
experience across multiple
sectors. Leslie has a deep
knowledge of the food
Schweppes and United
Biscuits, where he served as
group chief executive officer.
Leslie has held multiple non-
executive roles throughout
his career including currently
serving as the chair of the
Robert Walters Group and
chair of their nomination
committee, having previously
served as chair between 2012
Institutional Investor plc and
SIG plc, as well as deputy chair
and a non-executive director
and chair of the nomination
committee at Crest Nicholson
Holdings plc, a non-executive
director of HSBC UK Bank
plc and senior independent
director and chair of the
remuneration committee of
DCC plc.
Committee membership
Leslie joined Greencore in
December 2022 bringing a
Dalton joined Greencore
on 26 September 2022.
John brings insight to
Sly is an experienced executive
Linda brings extensive
Greencore having actively
having held several listed and
corporate experience and
wealth of extensive leadership
Dalton started his career with
worked in inclusive leadership
private board roles including
knowledge to the Board
and non-executive and chair
Jardine Matheson followed by
and building high-performing
serving as a non-executive
Walmart before moving into
teams. John is a respected
director of Ladbrokes plc and
industry having held previous
and travel retail group, chief
positions at Danone, Cadbury
executive of Wm Morrison
founder and chief executive
officer of APS Intelligence
roles including chief executive
organisational psychologist,
of daa plc, the global airports
executive coach and is the
EMI plc, where she served
as both senior independent
director and chair of the
remuneration committee.
having spent her executive
career in stockbroking and
investment banking. Linda
previously worked at NCB
Stockbrokers and Merrill
Lynch, before serving as
plc, then a FTSE 100 company
Ltd, a talent and leadership
She has also served as a non-
head of corporate broking at
and the UK’s fourth largest
supermarket chain, chief
executive of luxury goods
development firm. In
executive director and chair of
Goodbody Stockbrokers for
addition, John is a leadership
the remuneration committee
15 years.
training partner with the
for the Press Association. Sly
and 2018. He has held various
Dalton is currently serving as
non-executive roles and was
a non-executive director of
previously chair of Euromoney
IBEC CLG.
retailer Brown Thomas Group,
National Health Service and
and chief operating officer
of Canadian retailer Loblaw
Companies Limited. Dalton
is currently serving on the
Lloyd’s of London culture
advisory group. John has
currently serves as a non-
executive director of IPSX
Group Limited where she is
also chair of the remuneration
has also previously served as
previously been a member of
committee and a member of
a senior advisor to the Boston
the Inclusive Advisory Panel
Consulting Group.
at Tesco, the Diversity and
the nomination committee.
Sly previously served as chief
Dalton has a BA from
University College Dublin, an
MBA from Harvard University,
and an honorary Doctorate of
Management from Bradford
University.
Inclusion Board at Sanofi and
executive officer for one of the
the Inclusive Leadership Board
UK’s largest media companies,
for KPMG UK.
John is a Chartered Scientist,
a Chartered Fellow of
the Chartered Institute of
Trinity Mirror plc, for almost 10
years. She has also previously
served as chief executive
officer of IPC Media.
Personnel and Development,
Sly’s broad knowledge
Society for Public Health. John
provides her with a deeper
is currently a research fellow at
understanding of different
the University of East London.
markets and business
Linda is a non-executive
director of Kingspan
Group plc, a global leader
in insulation and building
envelope solutions, where
she serves as senior
independent director, worker
relations director, chair of the
remuneration committee and
a member of the nominations
committee. Linda is also a
non-executive director of
Cairn Homes plc where she is
remuneration committee chair
and a member of the audit
currently acting as vice chair
of Quanta Capital’s advisory
board and has previously
served as chair of the Irish
Blood Transfusion Service.
and a Fellow of the Royal
spanning a variety of sectors
and risk committee. She is also
circumstances underpinning
her appointment as Senior
Independent Director. Sly’s
strong interest in employee
related matters has been
invaluable in her role as
Workforce Engagement
Director.
Group General Counsel
and Company Secretary
(Aged 46)
Appointed as Group General
Counsel and Company
Secretary with effect from
7 November 2022.
Damien brings over 20 years’
experience as a corporate
lawyer and senior executive
across Europe, the US and
Asia. Damien was responsible
for the legal and corporate
secretarial functions, as well
as the risk, sustainability,
quality and compliance
functions, in his previous
role as general counsel and
company secretary of FTSE
250 listed UDG Healthcare
plc. Prior to this, Damien acted
as chief operating officer and
general counsel at Sysnet
Global Solutions (now Viking
Cloud), a fast-growing global
technology business.
Damien trained and practiced
as a corporate/M&A lawyer
with Freshfields Bruckhaus
Deringer in their London,
Tokyo and New York offices
before moving to Maples and
Calder’s Dublin office and has
extensive experience advising
global clients on public and
private large-scale multi-
jurisdictional transactions. He
has also completed executive
education programmes
most recently at Cambridge
University (in sustainability
management) and Columbia
University (in leading strategic
change).
Strategic Report | Directors’ Report | Financial Statements | Other Information 64 Greencore Group plc Annual Report and Financial Statements 2023
Board leadership, culture and company purpose
Board leadership, culture, and company purpose
The Board is ultimately responsible to shareholders for the direction,
management, performance and long-term sustainable success of
the Company with key stakeholders in mind. It sets the Group’s
strategy and objectives and oversees and monitors internal controls,
risk management, principal risks, governance and viability of the
Company, ensuring that these are aligned to the Group’s purpose
and culture.
The strategy of the Group is set by the Board and is subject to an
in-depth annual review. The Board is committed to the delivery of
the Group’s refreshed three horizon strategy: Horizon 1: stabilise the
business, Horizon 2: rebuilding profitability and returns; and Horizon
3: developing our strong growth platform. Our strategy is set out on
pages 18 to 21.
An overview of the key activities of the Board for FY23 is set out on
pages 66 to 67.
Company purpose – Making every day taste better
Our purpose sets a common goal throughout the Group to always
strive for better. Every day, under the Board’s leadership, our
colleagues make a positive contribution to the lives of many people,
including by providing convenient, nutritious and tasty food for our
customers and consumers whilst sourcing responsibly. Embedding
the Group’s purpose through decision-making is a fundamental part
of the Board’s role. The Board understands this responsibility as it
works to ensure that the Group has processes in place to look after
our colleagues and care for our communities and the planet. Further
information on the Group’s purpose is set out on page 4 of the
Strategic Report.
Our stakeholders
The Board is committed to actively engaging with and understanding
the views of our different stakeholders and taking their views
into consideration. The Board is mindful that our actions and
decisions impact all of the Group’s stakeholders. Read more on our
engagement with stakeholders during FY23 on pages 68 to 73.
Decision-making
Culture
O u r purpose
k i n g e v e r y day taste better
M a
sum ers
n
o
C
C
o
l
l
e
a
g
u
e
s
S t a k eholders
Decision-
making
Local
Communi t i e s
C
u
s
t
o
m
e
r
s
s
r
Supplie
Our strateg y
Read more on pages 1 8 t o 2 1
65
Board Committees
The Board has four principal Board Committees to assist in the
fulfilment of its responsibilities, providing dedicated focus on
particular areas. Each Committee is responsible for reviewing and
overseeing activities within its particular Terms of Reference. The
Chair of each Committee provides a summary of the proceedings
of any Committee meetings held since the previous Board meeting
at each scheduled meeting. Details of the various Committees’
members, together with their relevant biographies are set out on
pages 62 and 63 of this Report. Further details on the role of the
Committees and the work undertaken by each Committee in the
year under review can be found on pages 78 to 107.
Sub-committees of the Board
During FY23, sub-committees of the Board were established in order
to facilitate the streamlined consideration and approval of specific
projects or items which may require additional or particular focus
and attention outside of the scheduled meetings. Sub-committees
of the Board comprise of a minimum of three directors. Four sub-
committee meetings were held during FY23.
Governance structure
How we are governed
How the Board operates
The Directors are responsible for the proper stewardship of the
Group’s affairs, both on an individual and collective basis, and it is
the Board alone that has the authority and responsibility for planning,
directing and controlling the activities of the Group.
There is an agreed procedure for Directors to take independent
legal advice at the expense of the Company in the furtherance of
their duties as Directors of the Company. In addition, the Directors
are indemnified for any legal action taken against them in respect of
matters pertaining to their duties as Directors, subject always to the
limitations under Irish company law.
Matters reserved to the Board
There is an agreed list of matters reserved for Board consideration
which is formalised in a Matters Reserved to the Board Policy. This is
reviewed annually and updated as appropriate. The Matters Reserved
to the Board Policy was last reviewed in September 2023 and is
available under the Investor Relations section of the Group’s website,
www.greencore.com.
Conflicts of interest
Under the Board’s formal Conflicts of Interest Policy, all Directors
have a duty to avoid a situation in which they have, or may have, a
direct or indirect interest that conflicts, or possibly may conflict, with
the interests of the Company while serving on the Board. As such,
at the beginning of every meeting all Directors are asked to declare
any conflicts. Directors are not permitted to vote regarding their own
conflicts, if any. The Conflicts of Interest Policy was last reviewed in
September 2023.
The Board
Audit and Risk
Committee
Read more on page 82
Nomination and
Governance
Committee
Read more on page 78
Remuneration
Committee
Sustainability
Committee
Read more on page 88
Read more on page 107
Chief Executive Officer
Chief Financial Officer
Group Executive Team
Read more on page 59
B
o
a
r
d
o
v
e
r
s
i
g
h
t
M
a
n
a
g
e
m
e
n
t
a
c
c
o
u
n
t
a
b
i
l
i
t
y
Strategic Report | Directors’ Report | Financial Statements | Other Information
66
Greencore Group plc Annual Report and Financial Statements 2023
Board activities and engagement with stakeholders
WHAT THE BOARD
DID IN FY23
Total number of meetings held in
FY23
28
Includes scheduled and unscheduled
Board, Board Committee and sub-
committee meetings.
Site visits in FY23
4
At each Board meeting, the Chief
Executive Officer (‘CEO’) provides a
report on the overall performance of the
business, while the Chief Financial Officer
(‘CFO’) provides a report on the financial
performance and updates are received
from each of the Committee Chairs.
Through scheduled business reports, the
Board focuses on key commercial and
operational updates. In addition to these
matters and other recurring agenda items,
specific areas of focus were considered
by the Board in FY23 as are set out this
section.
Board Committees
Audit and Risk
Remuneration
Nomination and
Governance
Sustainability
Strategy and corporate development
Strategy
Corporate development
Considered and approved the disposal
of the edible oils business, Trilby
Trading Limited, to K.T.C. (Edibles) Limited,
a majority owned subsidiary of funds
managed by Endless LLP, in light of the
Group’s current strategic focus on the
UK convenience food market.
Group strategy and corporate
development was considered in detail
during the year, including during a
standalone Board strategy session in April.
Received regular updates on the progress
of strategic development, reframing the
future direction and, in particular, the
progress of Horizon 1, and consideration
of Horizons 2 and 3 for FY24 and beyond.
Supported the incorporation of
sustainability into the strategic planning
of the Group together with the newly-
established Sustainability Committee.
Operational and financial performance
Performance
and trading
Budgeting, financing
and capital management
Reviewed and considered the CEO, CFO
and Interim CFO reports at each Board
meeting, together with commercial and
operational updates from the Group
Executive Team.
Discussed, reviewed and approved the
Group’s budget presentation for FY24.
Considered strategic objectives and
implications on long-term performance
and future capital investment and returns.
Reviewed and considered monthly
reports, including management accounts
and details of performance against
budget.
Approved FY22 Full Year Results,
FY23 Half Year Results and the FY23 Q1
and Q3 Trading Updates.
Following a review of the Group’s
financing structure and requirements,
approved terms of new financing
arrangements to replace existing facilities
and extend the tenor of the Group’s
overall funding position.
Approved £35m in aggregate in share
buyback programmes (ongoing) to
complete the £50m of value return
programme which was announced in
May 2022.
67
During FY23, a period of transition, the
Board focused on supporting the Group
Executive Team in realigning commercial and
operational imperatives, resetting the Group’s
governance structures and paving the way for
refreshed strategic priorities.
In ensuring that the Board agenda meets the
needs of the business, each Board meeting
agenda is agreed in advance by the Chair,
the CEO and the Group General Counsel and
Company Secretary.
Governance and legal
Risk management
Board succession
and Committee composition
Supported the onboarding of Leslie Van
de Walle as the new Chair of the Board,
replacing Gary Kennedy.
Approving the appointments of Alastair
Murray and Harshitkumar (Hetal) Shah as
Non-Executive Directors and Catherine
Gubbins as Executive Director and CFO.
Reviewed and restructured the Committees
against good corporate governance
practices and the current and future needs
of the Group, including establishing a new
Sustainability Committee.
Board evaluation and operation
Oversaw internally-facilitated Board
and Committee evaluations and the
implementation of actions from previous
evaluation processes.
Considered evaluators for the planned
FY24 externally-facilitated Board review.
Legal and regulatory
Received reports on and discussed
regulatory developments, such as
proposed changes to the UK Corporate
Governance Code.
Received reports from each of the
Committee Chairs and the Workforce
Engagement Director on their activities,
receiving recommendations for approval,
as appropriate.
Reviewed and approved the FY22 Annual
Report and Financial Statements, FY22
Full Year Results and the FY23 Half Year
Results announcements.
Reviewed and approved various Group
policies including, Tax Strategy and Policy,
Treasury Policy, and Code of Ethics and
Business Conduct.
Received updates from the Risk
Oversight Committee and considered
functional risks, the Group’s principal
risks and uncertainties and emerging
risks.
Received regular updates and
considered certain risk areas including
cybersecurity, IT, technical/food safety
and operational safety, health and
environment.
Considered Group risk management
and approved the Group’s Statement
of Risk Appetite.
Considered and approved the Group’s
viability statement and considered the
effectiveness of internal controls and
the risk management system.
Stakeholder engagement
Shareholders
Colleagues
Held an in-person Annual General
Meeting in the Aviva Stadium in Dublin,
Ireland on 26 January 2023.
Following his appointment, the
Chair connected with the Group’s
largest shareholders, and updated
the Board following meetings with
a number of these.
Received updates from the CEO and the
Investor Relations team following
meetings with the Group’s shareholders
following release of results, with the
Board receiving updates from these
meetings in addition to reports and
feedback from brokers and analysts.
Customers and suppliers
Received regular updates on business
opportunities with new and existing
customers.
Reviewed updates and considered supplier
relationships as part of the Group’s
strategy and operational discussions.
Reviewed employee engagement
results, such as results from our People
at the Core survey which took place in
October 2022 and our FY23 Pulse
Engagement Survey.
Represented by the Board’s Workforce
Engagement Director, meetings were
held with members of the workforce,
after which the Board received updates
on findings and recommendations.
Approved the 2023 Remuneration
Policy and received updates on the
remuneration framework applicable
to the wider workforce.
Engaged with members of management
and the wider workforce, during Board
and Committee meetings and during
site visits, getting the opportunity to
see talent from across the Group.
Local communities
Supported the Group’s involvement
in initiatives supporting the local
communities in which we operate.
Strategic Report | Directors’ Report | Financial Statements | Other Information 68
Greencore Group plc Annual Report and Financial Statements 2023
Board activities and engagement with stakeholders continued
ENGAGING WITH
OUR STAKEHOLDERS
Our purpose-led
stakeholder engagement
For the Group, strategic engagement
creates trusted relationships with our key
stakeholders and enables the Board to
understand their needs and priorities in order
to deliver value and build a better, more
resilient and sustainable business.
The Board is aware that the Group’s actions
and decisions impact all of our stakeholders
and it ensures that there is regular dialogue
taking place with stakeholders, which is
carried out by those most relevant to the
stakeholder group or issue, and discussed
appropriately in the boardroom.
Feedback from all engagement activities is
regularly considered by the Board as part
of its decision-making process. Effective
stakeholder engagement helps us better
understand the impact of our decisions on
all our stakeholders as well as their needs
and concerns.
The Board is also aware that situations
will exist where not every stakeholder
interest can be addressed in full, however
stakeholder regard continues to the greatest
extent possible in decision-making at every
level.
The Board’s approach to stakeholder
engagement and some key decisions made
during FY23 following those engagements,
are set out on pages 69 to 71. To give greater
understanding to this, we have provided
clear cross-referencing to where more
detailed information can be found in this
Annual Report. Shareholders and other
stakeholders can be confident that the
contents of our corporate reporting reflect
the frameworks for strategy, stakeholder
engagement, governance, risk management
and culture as established and overseen by
the Board.
More information
• Our 2023 Sustainability Report
sets out how our purpose
and Sustainability Strategy are
interlinked with stakeholders
in mind and is available on
www.greencore.com. Further
information on our Sustainability
Strategy can be found on pages
22 to 39 of this Annual Report.
•
The Group’s Code of Ethics
and Business Conduct sets out
our fundamental principles and
values directly applicable to our
stakeholders. The Code of Ethics
and Business Conduct is available
on www.greencore.com.
69
Our stakeholders
Shareholders
Customers
Suppliers
Consumers
Colleagues
Local
communities
Shareholders
Customers
Why engage with our shareholders?
Why engage with our customers?
• As owners of our business, engagement with shareholders helps
us understand their expectations as regards key areas of interest.
• Key areas of interest include our financial and operational
performance, our strategy for sustainable growth, capital
allocation and corporate governance.
• We are in business to provide a valuable service to our valued
customers, and they rely on us to provide quality products
sustainably, on time and at a competitive price and engagement
helps us understand both their needs and the needs of the
consumer.
• Key areas of interest include the development of valued long-
term partnerships, innovating together to provide great-tasting
sustainable quality food to the highest technical and food safety
standards.
How we engage
How we engage
•
In addition to regular communication channels (e.g., website,
social media channels) our Group Executive Team and Investor
Relations team meet regularly with equity investors and analysts.
• Attendance at our Annual General Meeting and the presentation
of our annual and half year results and the associated roadshows
also provide opportunities for engagement.
• Our CEO, CFO and Investor Relations team provide investor
meeting updates and feedback to the Board and, following his
appointment this year, our Chair contacted a number of our
largest shareholders.
• Our Chair engaged with many of our shareholders in person
at the 2023 AGM as well as six of our largest shareholders
throughout the year.
• We work closely with our customers on a daily basis to develop,
improve and refine our products and ensure quality and food
safety, through collaborative projects, market insights and
innovation workshops with existing and new products aligned to
our healthy and sustainable diets strategy.
• This engagement occurs at multiple levels, including at senior
management and Executive Director level, and the Board receives
regular customer relationship and industry trend updates.
• The Board supports the Group as it identifies opportunities
to deepen these relationships and, through the Sustainability
Committee, is particularly focused on opportunities with
customers to progress our healthy and sustainable diets agenda.
What outcomes were achieved?
What outcomes were achieved?
• Through our engagements, we understand that shareholders
remain focused on financial performance, sustainable growth and
capital allocation.
• Feedback received from shareholders showed differing views with
regard to share buyback and dividends.
• The Board remain mindful of these views when considering the
most appropriate means of returning capital to shareholders.
• During FY23 we developed and launched a number of new
product ranges in response to existing and emerging trends.
• Customer and industry feedback was regularly shared with the
Board, helping the Board understand and support customer
opportunities and potential issues as they arose, including for
example the impact of the cost of living crisis.
Read more on page 67
Read more in our Strategic Report
Strategic Report | Directors’ Report | Financial Statements | Other Information 70
Greencore Group plc Annual Report and Financial Statements 2023
Board activities and engagement with stakeholders continued
Suppliers
Consumers
Why engage with our suppliers?
Why engage with our consumers?
• By working closely with our suppliers, we better understand our
supply chain, helping us identify potential issues and opportunities
for the supplier, the Group and our customers.
• The Group’s focus on great taste and quality, food safety,
innovation and a sustainable supply chain means that mutually
beneficial supplier relationships are essential to ensuring
sustainable opportunities continue to exist for both ourselves and
our suppliers.
• As the end user of our products, we understand that consumers
rely on us every single day and by engaging with consumers,
we better understand changing consumer behaviours and
preferences, allowing us to provide them with great-tasting
sustainable quality food to the highest technical and food safety
standards.
How we engage
How we engage
• We interact daily with our suppliers, and our procurement teams
hold workshops with key suppliers to drive strategies for mutual
benefit, share our strategy on growth and sustainability and
request support as required in relation to volume, quality and
source.
• The Board is updated regularly on our key relationships and
through our Sustainability Committee, is particularly focused on
sustainable sourcing and working with suppliers as we encourage
ethical sourcing, and identify areas of our supply chain that may
be at risk from modern slavery and human rights abuses.
• Our Board also receive updates relating to shared challenges,
e.g., inflation and responsible sourcing, and, importantly, through
the Audit and Risk Committee, monitor payment terms to ensure
these are fair and reasonable.
• We carry out a significant amount of analysis and research on
the different food categories that we produce, focusing on
how each category is performing and the major trends in that
category from a consumer and marketplace perspective.
• Our Board, through its Sustainability Committee, is committed to
understanding these trends and changing behaviours, particularly
as by doing this we can better contribute to society by improving
livelihoods and helping consumers make healthier food choices.
What outcomes were achieved?
What outcomes were achieved?
• A key pillar to the Group’s Sustainability Strategy is Sourcing
with Integrity and the Group’s Sustainability Committee has re-
iterated the Group’s intention to be an ethical business, sourcing
its priority ingredients from a fairer and more sustainable supply
chain.
• The Board and management discuss and consider the findings
of the analysis and research conducted, and importantly the
inputs of our customers and this is factored into discussions
when considering the Group’s strategy, particularly in relation to
sustainability.
• During FY23, the Board also approved the Group’s Modern Slavery
and Human Trafficking Transparency Statement.
Read more in our Strategic Report
Read more on page 16
71
Colleagues
Local communities
Why engage with our colleagues?
Why engage with our local communities?
• Our greatest asset is our dedicated and experienced workforce –
they are the lifeblood of our business and the anchor to the local
communities in which we operate.
• Our business depends heavily on the communities in which we
operate and by engaging with our local communities we can
provide support in a more effective manner.
• Engaging with our colleagues has helped us understand that
they seek an open, diverse and safe workplace, an environment
enabling them to achieve their full potential, and one where they
are accepted and valued for who they are, regardless of their
background.
• We consider ourselves to be a part of these communities and it
is our responsibility to provide a positive impact, whether that
is as an employer or as a producer of healthy, quality food that
everyone should be able to access, particularly in severely difficult
economic times as we are currently experiencing.
How we engage
How we engage
• Through numerous channels, the Group undertakes a significant
number of engagement activities with colleagues each year, such
as colleague forums across our sites, or through the anonymous
People at the Core survey and Pulse Engagement Survey.
• Through these activities, the Board and management are provided
with valuable insights from colleagues expressing their views,
both positive and negative. Colleagues’ views about where they
work are obtained from the People at the Core survey results,
whereas the colleague forums provide opportunities for ‘two-way’
dialogue with senior leaders in the business.
• The Board is regularly updated on the numerous regular
communication channels such as weekly CEO videos, fortnightly
leadership calls, the quarterly leadership forum, while our peer-
to-peer listening service, Talk2Us, continues to offer colleagues
a confidential service that they can use for emotional and social
support.
• We interact through various channels from colleague
engagement and participation in local events to more direct
intervention such as charitable donations. Food donations in
particular continue to be a central focus for our community
engagement efforts.
• Supporting local communities is a priority area of the Group’s
Sustainability Strategy, the Better Future Plan.
• The Board, through its Sustainability Committee, received regular
updates in relation to the progress of the Group’s Sustainability
Strategy, the Better Future Plan.
What outcomes were achieved?
What outcomes were achieved?
•
In addition to people and engagement updates provided in the
CEO’s report at each Board meeting, the Board’s Workforce
Engagement Director also met with colleagues and provided the
Board with valuable feedback which management have been able
to act upon. Read more on pages 72 to 73.
• Recognising the importance of a diverse and inclusive workplace,
the Board approved the Board Diversity Policy, ensuring its
alignment with the Group Inclusion and Diversity Policy, and
performance will form part of the CEO’s’ personal and strategic
objectives for the FY24 annual bonus plan.
• A Communities Roadmap has been developed as part of our
Sustainability Strategy, the Better Future Plan.
• During FY23, the Group has redistributed over 770 tonnes (or
1,833,370 equivalent meals) of edible food waste.
• We have also increased the number of onsite staff shops where
our own colleagues can purchase discounted products to help
with the ongoing cost-of-living crisis.
Read more on pages 72 and 73
Read more on page 28
Strategic Report | Directors’ Report | Financial Statements | Other Information 72
Greencore Group plc Annual Report and Financial Statements 2023
Board activities and engagement with stakeholders continued
ENGAGING WITH
OUR STAKEHOLDERS
Greencore recognises that our colleagues are intrinsic to the
success of our business. Active engagement continues to be
vitally important as we navigate ongoing external challenges,
develop and win new business, refine working practices and
seek to further improve retention.
During FY23, along with the assistance of our Workforce Engagement
Director, Sly Bailey, the Group strengthened existing, and implemented
several new, colleague engagement initiatives. These included:
the introduction of a colleague app to help us improve
•
communication with our frontline colleagues;
• weekly communication video from our CEO to ensure all
colleagues are updated on business performance and progress;
the launch of an in-house online coaching and mentoring portal;
the opening of discounted ‘staff shops’ at several sites; and,
•
•
• continuation of our cross-functional colleague forum.
Sly ensures that our colleagues’ voices are heard in the boardroom
and their interests are taken into consideration when making
important decisions.
73
“The cross-functional forum was
an ideal way, during this year’s
organisational changes, for colleagues
to have a voice and share regularly,
with management, what they felt was
working well and where we could do
things differently. The colleagues in
this group act as a temperature check
for the business – sharing how people
are feeling and looking at how we can
work together to continue to enhance
engagement and, also, support each
other right across the business.”
Feedback from a colleague forum member
Autumn 2023
Activities of the Workforce
Engagement Director during FY23
Our plans to further improve
colleague engagement
Hosted a listening group with our cross-functional salaried
colleague forum members and provided feedback to the
Board.
Advised and supported on the restructuring that took place
during the year.
Continued to review the Group’s recruitment, selection and
training processes.
Expand roll-out of our ‘staff shop’ concept to ensure as many
colleagues as possible get access to discounted products.
Provide training to both leaders and colleagues to ensure
our colleague app is best utilised to enhance engagement.
Develop key processes to help streamline and standardise
work – including the launch of a new people management
system.
Reported to the Board on a number of colleague engagement
areas including inclusion and diversity and talent management.
Build on our approach to hybrid working to support positive
work life balance for all colleagues.
Met with the Chief People Officer to discuss colleague training
and development plans, organisational changes, Inclusion and
Diversity Strategy and new communication initiatives.
Input to the plans and discussed output from our FY23 Pulse
Engagement Survey.
Re-energise the focus we put on The Greencore Way as an
enabler that will support us on our growth journey.
Strategic Report | Directors’ Report | Financial Statements | Other Information 74
Greencore Group plc Annual Report and Financial Statements 2023
Division of responsibilities
As set out on page 65 of this Annual Report, the Board is collectively responsible for planning,
directing and controlling the activities of the Group. The Board’s responsibilities are set out in
a formal Matters Reserved to the Board Policy. The Board is currently made up of nine Directors:
one Executive Director and eight Non-Executive Directors, one of which is the Board Chair.
Board Chair
Leslie Van de Walle
Roles of the Board Chair and Chief Executive Officer (‘CEO’) are separate and distinct and there is a clear
division of responsibilities between the two roles. It is the role of the Board Chair to lead the Board and
ensure its overall effectiveness in directing the Company, whilst demonstrating objective judgement and
promoting a culture of openness and debate.
Chief Executive Officer
Dalton Philips
Reporting to the Board Chair, the CEO has overall responsibility for running the business, driving
shareholder value and developing strong relationships with stakeholders.
Chief Financial Officer
Emma Hynes1
(October 2022 – May 2023)
The Chief Financial Officer (‘CFO’) is primarily responsible for managing the financial affairs of the
Company and optimising its financial performance. The CFO is also responsible for internal audit and risk
management, as well as the Group’s tax affairs.
Non-Executive Directors
John Amaechi
Sly Bailey
Linda Hickey
Alastair Murray
Anne O’Leary
Helen Rose
Harshitkumar (Hetal) Shah
Leslie Van de Walle
Senior Independent Director
Sly Bailey
The role of a Non-Executive Director includes providing entrepreneurial leadership, developing
strategy, scrutinising management performance and challenging management proposals in a clear
and constructive manner. Non-Executive Directors also utilise their skills, expertise and experience to
contribute to the development of the Group as a whole. Information on the time commitment expected
from each Non-Executive Director is set out below.
In accordance with best practice and the 2018 UK Corporate Governance Code, the Board has appointed
a Non-Executive Director as the ‘Senior Independent Director’. It is the role of the Senior Independent
Director to act as a confidential sounding board for the Board Chair and to serve as an intermediary for the
other Directors when necessary. The Senior Independent Director is available to shareholders, and other
stakeholders, if they have concerns which they have been unable to resolve through the normal channels
of Board Chair, CEO or CFO, or indeed where such contact through the aforementioned channels is
deemed inappropriate. Terms of Reference for the Senior Independent Director are approved by the Board
and are reviewed annually. A copy of the Terms of Reference for the Senior Independent Director can be
found on the Group’s website, www.greencore.com.
Group General Counsel and
Company Secretary
Damien Moynagh
The Group General Counsel and Company Secretary, whose appointment and removal is a matter for the
Board as a whole, is responsible for advising the Board on all governance matters and ensuring that Board
policies and procedures are followed. The Group General Counsel and Company Secretary is available to
each of the Directors for any advice or additional support they may require.
1. Jonathan Solesbury is currently acting as Interim Chief Financial Officer. He is not a member of the Board. As noted on page 60, Catherine Gubbins will join the Board in
early 2024 as Executive Director and Chief Financial Officer.
Time commitment
Each year, a schedule of regular meetings to be held in the following
calendar year is agreed with each of the Directors. A list of the
Directors’ attendance at scheduled meetings throughout the year
can be found on page 61. Additional Board meetings are held on an
ad hoc basis as required throughout the year.
Board and Committee meetings normally take place at the Group’s
head office in Dublin as well as at the Group’s sites where tours of the
local facilities and/or customer visits are also incorporated into the
Board agenda.
Board papers are circulated electronically to Directors in the week
preceding the Board meetings. The Board papers include the minutes
of the previous Board meetings and, where appropriate, Committee
meetings. In addition, the Chair of each Committee provides a verbal
update on the relevant Committee meeting’s proceedings at the
following meeting of the Board.
If a Director is unable to attend a Board meeting, either in person
or remotely, he or she is encouraged to communicate his or her
views on any particular topic to the Board Chair, the CEO, the
Senior Independent Director or the Group General Counsel and
Company Secretary, in advance of the meeting. These views are
then communicated at the Board meeting on behalf of the absent
Director.
Where appropriate, the Board also establishes sub-committees
on an ad hoc basis in order to deal with any additional items of
business which arise throughout the year. The membership of
the sub-committees will depend upon the purpose for which it
was established and will take into account the skills and expertise
necessary. During FY23, four sub-committee meetings were held.
The Board held 28 scheduled and unscheduled meetings during
FY23. Attendance at scheduled Board and Committee meetings held
during the year was as follows:
75
Scheduled meeting attendance during FY23
Scheduled meetings held during the year
John Amaechi2
Sly Bailey
Paul Drechsler3
Linda Hickey
Emma Hynes4
Gary Kennedy5
Alastair Murray6
Anne O’Leary
Dalton Philips
Helen Rose
Harshitkumar (Hetal) Shah7
Leslie Van de Walle
Helen Weir8
Board1
Audit and Risk
Committee
Nomination and
Governance
Committee
Remuneration
Committee
Sustainability
Committee
8
7/8
8/8
2/2
8/8
6/6
1/2
4/5
8/8
8/8
8/8
4/4
7/7
1/1
4
–
–
–
4/4
–
–
2/2
4/4
–
4/4
2/2
1/1
1/1
2
1/1
1/1
0/0
1/1
–
0/0
1/1
–
–
1/1
–
1/1
–
3
2/2
2/2
1/1
3/3
–
–
–
3/3
–
–
–
–
–
1
0/1
1/1
–
–
–
–
1/1
–
–
1/1
–
–
–
1. The Board and each Committee held additional meetings throughout the year. Further details on additional Committee meetings are set out in the respective Committee
reports.
2. John Amaechi was unable to attend a Board meeting and a Sustainability Committee meeting due to illness. Having read the papers, he communicated his views on the
business of the meetings to the Chair.
3. Paul Drechsler stepped down from the Board and as Non-Executive Director on 26 January 2023.
4. Emma Hynes stepped down as Executive Director and Chief Financial Officer on 31 May 2023.
5. Gary was unable to attend one meeting due to an illness. Gary stepped down from his role as Board Chair and Non-Executive Director on 26 January 2023.
6. Alastair Murray was appointed to the Board as Non-Executive Director and Chair of the Audit and Risk Committee on 1 February 2023. Alastair was unable to attend a
meeting due to prior business commitments. Having received the papers, he communicated his views on the business of the meeting to the Chair.
7. Hetal Shah was appointed to the Board and as Non-Executive Director on 1 April 2023.
8. Helen Weir stepped down from the Board as Non-Executive Director and Chair of the Audit and Risk Committee on 31 December 2022.
Site visit policy
The Board has a formalised Site Visit Policy for Non-Executive
Directors. Under the Site Visit Policy, Non-Executive Directors
visit certain sites, absent Executive Directors, in order to meet
local management teams, members of the wider workforce, see
operations and experience the culture of the business. During FY23,
Non-Executive Directors had the opportunity to visit the sites at Bow,
Tamworth, Warrington and Park Royal, after which an update on the
visits and associated learnings were shared with the Board.
In addition to the above, in accordance with the Appointment Policy,
Executive Directors shall not normally be permitted to take on more
than one non-executive directorship in a FTSE 100 company or
other significant appointment, however, each proposed external
appointment shall be considered independently. In the event
that permission is granted for an incumbent Director to take on
a significant external appointment, full details of the rationale for
permitting such an appointment shall be clearly explained in the
Group’s Annual Report and Financial Statements.
The Appointment Policy was reviewed in FY23 and minor
amendments were approved by the Board.
External appointment policy
The Board has a formalised External Appointment Policy
(‘Appointment Policy’) for Directors. The Appointment Policy
stipulates that in advance of any new Board appointment, each
potential new Non-Executive Director will be provided with
information on the time commitment expected of him or her for
his or her role. The potential Non-Executive Director is required
to provide a detailed overview of all other directorships and other
significant commitments together with a broad indication of the time
commitment associated with such other directorship(s) or significant
commitment(s). The proposed appointee must also confirm that
they have sufficient time to dedicate to the role and meet their
requirements as a potential Non-Executive Director of the Company.
Furthermore, all incumbent Directors must seek the prior written
approval of the Board in advance of undertaking any additional
external appointments. Before approving any additional external
appointment, the Board shall consider the time commitment
required for the role. Each proposed external appointment shall be
reviewed independently.
Strategic Report | Directors’ Report | Financial Statements | Other Information 76
Greencore Group plc Annual Report and Financial Statements 2023
Composition, succession and evaluation
Board composition and independence
The Board consists of eight Non-Executive Directors and currently
one Executive Director, being the Chief Executive Officer (‘CEO’).
In early 2024, Catherine Gubbins will join as Executive Director and
Chief Financial Officer (‘CFO’). A number of Board changes occurred
during FY23 which are detailed in the section entitled ‘Board
succession and changes to the Board’. The biographical details of
each of the Directors, along with each of their individual dates of
appointment, are set out on pages 62 and 63.
Collectively and individually, the Directors are highly experienced
with a wide range of skills, understanding and expertise which
facilitates effective and entrepreneurial leadership. The Directors’
individual capabilities, as well as the effective processes and
structures in place, ensure effective leadership of the Group and that
the highest standards of corporate governance are preserved.
The Board comprises individuals from a varied range of backgrounds,
each of whom brings independent judgement on a number of key
issues for the Group, including strategy, performance, operations,
culture, sustainability, health and safety, data analytics, leadership,
ethics and regulation, diversity, finance, risk and IT. This range of
backgrounds and expertise is invaluable to both the Board and the
Group as it continues to rebuild its economic and operating model
effectively and sustainably with all stakeholders.
At least annually, the Nomination and Governance Committee
undertakes a detailed review of Board and Committee composition
to ensure that there is effective succession planning in place and that
the Board and the Committees are of the appropriate size, structure
and composition, with no one individual or small group having the
ability to dominate decision making. Given the current composition
of the Board, no undue reliance is placed on any individual Non-
Executive Director and the Board is satisfied that it is sufficiently
independent in order to operate effectively.
In accordance with Provision 11 of the 2018 UK Corporate
Governance Code (the ‘Code’), at least half of the Board, excluding
the Board Chair, is considered independent. In accordance with
Board policy, the independence of each Non-Executive Director is
considered by the Nomination and Governance Committee prior to
appointment and independence is reviewed annually by the Board
and reassessed as necessary. The Board has determined that each
of the Non-Executive Directors is independent in character and
judgement and free from any business or other relationship that
could affect their judgement.
In assessing the independence of Sly Bailey, the Board considered
her length of service on the Board, which is in excess of nine years,
and formed the view that Sly has always and continues to exercise
independent judgement as a Non-Executive Director and as Senior
Independent Director. The Board concurred that Sly brings an
independent mind-set to Board and Board Committee meetings and
expresses her views independently of any other relationships. Sly has
confirmed that she will retire from the Board at the conclusion of the
2024 Annual General Meeting.
Board succession and changes to the Board
On 31 December 2022, Helen Weir stepped down from the Board as
Non-Executive Director and Chair of the Audit and Risk Committee.
At the conclusion of the AGM on 26 January 2023, Gary Kennedy retired
from his role as Board Chair and Non-Executive Director, Paul Drechsler
also retired from his role as Non-Executive Director and Leslie Van de
Walle assumed the position of Board Chair on the same date.
On 1 February 2023, Alastair Murray was appointed to the Board as a
Non-Executive Director and Chair of the Audit and Risk Committee
and on 1 April 2023, Harshitkumar (Hetal) Shah was appointed to
the Board as a Non-Executive Director. On 17 April 2023, the Board
announced that Emma Hynes would step down from her role
as Executive Director and CFO with effect from 31 May 2023. In
September 2023, the Group announced that Catherine Gubbins had
been appointed to the role of Executive Director and CFO
and would take up her role in early 2024.
The Board together with the Nomination and Governance
Committee keeps the composition of the Board under review, and
will continue to actively consider Board renewal and succession
planning during FY23 to ensure that it remains strongly positioned to
support and lead the Group into the future.
Further information in relation to Non-Executive Director
refreshment and succession planning is contained in the Report of
the Nomination and Governance Committee on pages 78 to 81.
Induction and development
New Non-Executive Directors undertake a tailored induction process
which includes dedicated time with the Group Executive Team and
senior management and scheduled trips to business operations.
The programme is tailored based on experience and background
of the individual and the requirements of the role. All Directors visit
the Group’s main operating sites as part of their induction and are
encouraged to make at least one visit to other sites every year. The
Board encourages visits to Group businesses, including meetings
with local management and meetings with members of the wider
workforce, as these help Directors understand the Group’s activities
through the direct experience of seeing our facilities and operations
and by having discussions with a diverse group of our people.
During FY23, the Directors received training on governance-related
matters and external experts are invited to attend Board meetings as
appropriate. This included proposed changes to the Code expected
in 2024.
Members of the Board also have access to online seminars and training
events to keep up-to-date on developments in key areas. All Directors
are encouraged to avail of opportunities to hear the views of and meet
with the Group’s shareholders and analysts. There is an established
Board diversity as at 29 September 2023
By gender
By role
By tenure
44%
56%
11%
89%
33%
45%
11%
11%
Female
Male
Executive
Non-Executive
<1 year
1-5 years
5-10 years
>10 years
77
Inclusion and diversity
The Group’s Board Diversity Policy (available on
www.greencore.com) sets out the approach taken to ensure
Board appointments support and embrace difference and nurture
an inclusive Board culture. In this context, diversity not only
encompasses gender, ethnic and social ambitions/diversities, but
also extends further to differing experience, background, intellectual
and personal strengths. All Board appointments are made on merit
against objective criteria, in the context of the overall balance of
skills, experience, expertise and backgrounds that the Board needs
to remain effective. This ethos is integral to the Nomination and
Governance Committee’s approach when carrying out its duty of
reviewing the Board composition. The Board is fully supportive of the
recommendations of the Hampton-Alexander Review and the Parker
Review in respect of both gender and ethnic diversity and aims to
maintain Board representation of at least 33% female gender diversity.
During FY23, the Board was updated on the progress made against
the Group’s Inclusion and Diversity Strategy and endorsed inclusion
initiatives taking place across the business. These included the
Group’s investment in reverse mentoring, introducing representation
targets for our leadership team and placing greater focus on social
inclusion through early career programmes. In addition, for FY24,
inclusion and diversity will remain an important goal in the CEO’s
personal and strategic objectives.
The Nomination and Governance Committee reviews the Board
Diversity Policy annually, monitoring progress on diversity and, where
appropriate, reports on the process used in relation to any Board
appointments.
Detailed information in relation to the Board appointment process for
FY23 is set out on page 79.
procedure for Directors to take independent professional advice in the
furtherance of their duties, if they consider this to be necessary.
Board evaluation
The Code specifies that the Board should undertake a formal and
rigorous annual evaluation of its own performance and that of its
committees and individual directors, and that the Board should have
an externally-facilitated evaluation at least once every three years.
The Board recognises the importance of ensuring sustained
improvement to and enhancement of its effectiveness, and
undertakes various phases of evaluation to facilitate this, as well
as a review of its independence. Each year, the Board conducts
an internal evaluation of its performance, which is led by the
Board Chair, as well as a triennial external evaluation. In FY21, the
evaluation was conducted by an external third party, Independent
Audit, in accordance with the requirement under the Code to have
it externally facilitated every three years. In FY22 and FY23, the
performance evaluation process was conducted internally.
In the FY22 Annual Report and Financial Statements, a number
of recommendations to enhance the Board’s effectiveness were
mentioned. In FY23, particular focus was given to optimise the
Board’s time and create a new way of working to maximise its
effectiveness. The quality of Board papers has improved, with more
concise papers being included in Board packs, leading to more
constructive discussion at meetings. In addition, the Board spent
considerable time refining the Group’s strategic priorities and how
these will be measured.
During FY23, the Board undertook an internal review of its operation,
performance and effectiveness, which was conducted using an
online questionnaire. The review concluded that the Board was
effective and working well. The results of the review, including Board
members’ comments in each area, as well as focus areas to enhance
the Board’s effectiveness, were reviewed by the Board, following
which the Board agreed to:
• enhance its focus on medium and long-term strategic objectives
and priorities;
• support successful onboarding of the new CFO; and
• continue to consider talent management strategy as part of
succession planning as well as development and performance of
the Group Executive Team and below.
A review of the operation, performance and effectiveness of the
Board Committees was also conducted in FY23 and a performance
evaluation discussion was included on the agenda for each of the
Committees, supported by an analysis of how each Committee was
performing against key areas of its Terms of Reference. Each of the
Board Committees concluded it was operating effectively.
The Board Chair held private discussions with each of the Non-
Executive Directors regarding individual Director performance. The
outcome of these evaluations was positive, noting that each Director
continues to contribute effectively.
The Senior Independent Director led the annual evaluation of
the Board Chair which involved the completion of a tailored
questionnaire by each Director on the Board Chair’s performance
and effectiveness for FY23. The Senior Independent Director
discussed the findings of the evaluation with the Board Chair and
then presented the findings, including proposed areas for further
focus in FY24, to the Board.
Strategic Report | Directors’ Report | Financial Statements | Other Information 78
Greencore Group plc Annual Report and Financial Statements 2023
Report of the Nomination and Governance Committee
REPORT OF THE
NOMINATION AND
GOVERNANCE
COMMITTEE
“During FY23, the Committee’s objective was to
maintain continuity of business knowledge on the
Board while overseeing the ongoing refreshment cycle
of the Board membership.”
Dear Shareholder,
As Chair of the Nomination and Governance
Committee (the ‘Committee’), it is my
pleasure to present my first Committee
report as Committee Chair for the year
ended 29 September 2023. This report sets
out the Committee’s main areas of focus
over the past financial year.
The Committee’s objective was to maintain
continuity of business knowledge on
the Board while overseeing the ongoing
refreshment cycle of the Board membership.
Activities of the Committee
During the year, in addition to two scheduled
meetings, the Committee also held four
unscheduled meetings.
Role of the Committee
The Committee’s responsibilities are outlined
in its Terms of Reference, which can be found
at www.greencore.com. The Committee
reviews and refers any proposed amendments
to its Terms of Reference to the Board for
approval annually. The Terms of Reference
were last updated in September 2023.
Membership of the Committee
The Committee currently consists of five
Non-Executive Directors: Sly Bailey, Linda
Hickey, Alastair Murray, Helen Rose and
myself, all of whom are considered to
be independent. Further details on the
Membership of the Committee
Committee members
Date appointed
Leslie Van de Walle1
1 February 2023
John Amaechi2
1 February 2021
Sly Bailey3
28 January 2014
Paul Drechsler4
1 February 2021
Linda Hickey
1 February 2023
Gary Kennedy5
26 July 2012
Alastair Murray
1 February 2023
Helen Rose
1 February 2023
Attendance at
scheduled Committee
meetings during FY23
1/1
1/1
2/2
0/0
1/1
0/0
1/1
1/1
1. Leslie Van de Walle was appointed Committee Chair on 1 February 2023.
2. John Amaechi stepped down from the Committee on 1 February 2023.
3. Sly Bailey stepped down as Committee Chair on 1 February 2023 and remains a member of the Committee.
4. Paul Drechsler retired from the Committee on 26 January 2023, following the conclusion of the 2023 Annual
General Meeting.
5. Gary Kennedy retired from the Committee on 26 January 2023, following the conclusion of the 2023 Annual
General Meeting.
Committee members’ skills, qualifications,
experience and expertise are set out on pages
62 and 63. No Director attends discussions
relating to their own appointment. In addition
to members of the Committee, the Chief
Executive Officer (‘CEO’) attends meetings
of the Committee when it is considered
appropriate for him to do so.
Committee effectiveness
The FY23 review of the operation,
performance and effectiveness of the
Committee was conducted through one-to-
one discussions held by me, as Committee
Chair, and each of the members, and a
performance evaluation discussion was
included on the agenda for the Committee
at its September 2023 meeting. The review
confirmed that the Committee continues
to operate effectively and efficiently and
has the skills and expertise required in order
to perform its role appropriately. In FY24,
particular focus for the Committee will be on
succession planning and talent management
and to continue to drive for diverse
candidates both at Board and executive level.
Board composition
The Committee, together with the Board
keeps the composition of the Board under
review, and, in FY23, considered Board size,
renewal, and succession planning to ensure
that it remains strongly positioned to support
and lead the Group into the future.
Length of service
Less than 1 year
Between 1 year and 5 years
Between 5 years and 10 years
Over 10 years
Number of
Non-Executive
Directors
31
32
13
14
1. Hetal Shah, Leslie Van de Walle and Alastair Murray.
2. John Amaechi, Linda Hickey and Anne O’Leary.
3. Helen Rose.
4. Sly Bailey.
The Committee is responsible for ensuring
that the Company has a formal, rigorous
and transparent process in place for Board
appointments. Prior to making any new
appointments to the Board, the Committee
considers the skills and attributes required
and agrees a profile. This is preceded by
an evaluation of the skills, knowledge,
experience and diversity on the Board as well
as the anticipated time commitment for the
role. The Committee also provides input into
a shortlist of candidates and is involved in the
interview process for all appointments. The
Committee recommends the appointments
to the Board for approval.
Chief Financial Officer appointment
During FY23, the Committee, led by the
Chair, oversaw a thorough and inclusive
selection process which resulted in the
appointment by the Board of the incoming
Chief Financial Officer (‘CFO’), Catherine
Gubbins, with effect from early 2024, to
replace Emma Hynes who stepped down
from the Board in May 2023. Catherine is an
experienced CFO with a strong track record
of successfully leading finance, legal and
procurement functions. An extensive search
was followed by a multi-stage interview
process which gave the Non-Executive
Directors the opportunity to meet the
shortlisted candidates. The Executive Search
Firm, Russell Reynolds were engaged by the
Committee and Russell Reynolds has no
connection with individual directors or the
Company other than its work as advisor to
the Company.
Non-Executive Director changes
The Committee oversaw a number of
changes to the Non-Executive Directors
during FY23. Helen Weir and Paul Drechsler
stepped down in December 2022 and
January 2023, respectively. I was appointed
by the Board as Non-Executive Director
and Chair Designate in December 2022,
and assumed the role of Board Chair
earlier than expected in early January
2023, due to the sudden illness of Gary
Kennedy. At the conclusion of the Annual
General Meeting (‘AGM’) in January 2023,
Gary officially retired as Board Chair. Gary
sadly passed away in February 2023. On
behalf of the Board, I would like to express
my condolences to Gary’s family and on
a personal note, I would like to express
my gratitude to Gary for his support and
generosity of time during my induction. He is
sadly missed.
Russell Reynolds was engaged in FY23
to assist in the identification of suitable
candidates for appointment of Non-
Executive Directors to the Board. The
Committee defined a set of specific criteria
for the two new Non-Executive Directors
which were set out in a role specification
to determine the key skills, experience,
knowledge, characteristics and requirements
for the role, having regard to the challenges
and demands of the future operating
environment, growth opportunities and
Board diversity.
In February 2023, Alastair Murray joined
the Board and became Chair of the Audit
and Risk Committee. Alastair is also chair
of the audit and risk committee at McBride
plc since August 2021. In April 2023,
Harshitkumar (Hetal) Shah joined the Board
and became a member of the Audit and Risk
Committee. Both Alastair and Hetal have
strong financial expertise and a background
in the food industry and their addition
strengthens the Board’s knowledge base.
Letters of appointment of each of the
Non-Executive Directors detail the terms of
appointment and Directors’ responsibilities,
and also stipulate the time commitment
required from Directors. Copies of Directors’
letters of appointment are available to
shareholders for inspection at the AGM and at
the Company’s registered office during normal
office hours.
Re-election
The Company’s Articles of Association
provide that at every AGM, each Director
shall retire and seek re-election. Under its
Terms of Reference, the Committee makes
recommendations to the Board concerning
the annual re-election of Directors. New
Directors may be appointed by the Board but
are subject to election at the first AGM after
their appointment. Both Alastair Murray and
Hetal Shah will seek first election at the 2024
AGM.
79
As the Group refreshes its priorities, it remains
important to me as Chair to review the
Board size and structure. In November John
Amaechi and Sly Bailey advised the Board
that they will not be seeking re-election
at the 2024 AGM. I would like to take this
opportunity to sincerely thank Sly for her
dedication to the Board. During her tenure,
Sly has sat on various Board Committees,
assumed the role as Senior Independent
Director and became the Group’s first
Workforce Engagement Director. Her
business leadership expertise has been
especially invaluable during the past two years
of transition on the Board and she played an
instrumental part in the Board Chair and CEO
succession plans. We would also like to thank
John for his contribution, bringing a wealth of
inclusive leadership experience and insights
to the Board and Committees on which he
served.
Committee composition
In early FY23, the Committee reviewed
the size, structure and composition of
the Board Committees and Board roles.
Considerations included reviewing Director
tenure on the Board and the tenure of the
Senior Independent Director and Workforce
Engagement Director (with consideration
that both roles are currently held by Sly
Bailey, the review was undertaken in her
absence), as well as Board Committees.
The Committee made recommendations
to the Board in respect of refreshing Board
Committee composition, taking into account
the requirements of the Committees’ Terms
of Reference, as well as the provisions of the
2018 UK Corporate Governance Code (the
‘Code’).
A new Sustainability Committee was also
formed and will oversee the implementation
of the Group’s Sustainability Strategy having
regard to key stakeholders.
Succession planning
Succession planning for all Directors,
including the Executive Directors, is an
ongoing cycle of work. As part of our
succession planning, the Committee
considers the current skills, experience and
tenure of the Directors and assesses future
needs against the longer-term strategy of the
Group.
We also considered the Group’s inclusion
and diversity planning as part of our
succession planning in order to support
developing a diverse pipeline.
Strategic Report | Directors’ Report | Financial Statements | Other Information 80 Greencore Group plc Annual Report and Financial Statements 2023
Report of the Nomination and Governance Committee continued
General experience
IT/Technology
Corporate Development/M&A
Capital Markets
Financial Expertise
Sustainability/ESG
Relevant Industry (Food/Retail)
Enterprise Leadership
Other Board Experience
PLC Board Experience
2
3
4
4
5
5
3
4
6
5
4
3
8
1
2
7
6
Corporate governance developments
Throughout FY23, we have continued to
keep up to date with corporate governance
requirements and in ensuring that Board
and Committee agendas were reflective of
current issues, and information provided
to members was current and timely.
Understanding and taking into account
the significance and importance of each
component of environmental, social and
governance (‘ESG’) related issues to the
business of the Company, the Board formed
a new Sustainability Committee. The new
Sustainability Committee is chaired by Helen
Rose who, having previously assumed the
role of Sustainability Engagement Director,
is close to the Group’s Sustainability Strategy
and the challenges faced. The Committee’s
role is to oversee and provide direction in
this area.
The Code continues to apply to the Group.
The Committee has developed a number
of policies and processes in order to
enhance corporate governance standards,
each of which were approved by the
Board, following recommendations from
the Committee. During FY23, each of the
policies were reviewed by the Committee,
updated where appropriate, and approved by
the Board.
Directors’ induction and training
A comprehensive, tailored induction
programme is developed for newly-
appointed Non-Executive Directors, which
includes dedicated time with the Group
Executive Team and senior management and
scheduled trips to business operations. The
programme is tailored based on experience
and background of the individual and the
requirements of the role. As part of their
induction programme, they are provided
with detailed information in relation to the
Group’s history and structure. They also
receive data and analysis on the Group’s
people, sustainability, commercial, strategic,
operational, financial, governance, risk
management and capital markets agenda.
In order to gain a deeper understanding
of the business, all Directors visit Group
operating sites as part of their induction and
are encouraged to make at least one visit
to other sites every year. Site visits are an
important part of the induction process, as
well as for continuing education in helping
Directors understand the Group’s activities
through the direct experience of seeing our
operations and by having discussions with a
diverse group of our people.
Directors receive ongoing training
and development, and the Board and
Committees receive regular updates and
briefings on relevant legal, environmental,
social, governance, regulatory and financial
developments, including from the external
auditor and external advisors.
81
Diversity representation as at
29 September 2023
The following tables set out the information
required to be disclosed under Listing Rule
9.8.6R(10) as set out in Annex 2 to UK LR 9,
as at 29 September 2023. For the purposes
of these tables, Executive management is
as defined in the Listing Rules, being the
executive committee or the most senior
executive or managerial management
body below the Board (or where there is no
such formal committee or body, the most
senior level of managers reporting to the
chief executive), including the company
secretary but excluding administrative and
support staff. For Greencore, this is the
Group Executive Team including the Group
General Counsel and Company Secretary.
Collection of data was done on the basis of
self-reporting from each Board member.
As at 29 September 2023, 44% of the Board
members were female. The Company
has also met the requirement to have at
least one Board member from an ethnic
minority background. The Group gender
diversity breakdown, which is also set out on
page 31, shows the gender mix across the
organisation.
Men
Women
Other
Not specified/prefer not to say
White British or other White (including minority-white groups)
Mixed/Multiple ethnic groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/prefer not to say
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage
of executive
management
5
4
–
–
56%
44%
–
–
2
1
–
–
7
–
–
–
100%
–
–
–
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage
of executive
management
7
1
1
–
–
–
78%
11%
11%
–
–
–
3
–
–
–
–
–
7
–
–
–
–
–
100%
–
–
–
–
–
the Committee will remain focused on
driving our inclusion and diversity agenda,
as well as managing senior talent succession.
I would like to express my gratitude to my
colleagues on the Committee for their
ongoing commitment to both the Board and
the Committee.
Leslie Van de Walle
On behalf of the Nomination and
Governance Committee
27 November 2023
Inclusion and diversity
During the year, the Board was updated
in relation to the initiatives to improve the
Group’s Inclusion and Diversity Strategy.
The Committee will continue to monitor
closely the Group’s wider diversity initiatives
and progress against plans over the course
of FY24. In the year under review, the
Committee reviewed and updated the
Board Diversity Policy to reflect the new
disclosure requirements. The Board’s gender
and ethnicity diversity disclosures, including
those relevant under the new Listing Rule
9.8.6R(10), are set out above. The Board
Diversity Policy is available under the
Governance section of our website,
www.greencore.com.
We strongly believe that diversity
throughout the Group and at Board level
is a driver of business success and overall
Group strategy. We recruit and appoint
talented Board members, who have the
appropriate mix of skills, capabilities and
market knowledge to ensure the Board
is effective. Throughout the year, and in
line with our Board Diversity Policy, the
Committee ensured appointments to our
Board and its Committees contributed to
the Group-wide inclusion and diversity
ambitions. With 44% female representation
currently on the Board, we have exceeded
the recommendations of the Hampton-
Alexander Review and are also in
compliance with the recommendations of
the Parker Review and the new Listing Rule
requirements.
Furthermore, with the appointment of
Catherine Gubbins to the Board as CFO and
Executive Director, with effect from early
2024, the Board will continue its progress
in moving towards a more gender balanced
and diverse and inclusive Board.
The Committee is proud of its progress in
this area and is committed to maintaining
balanced representation on the Board.
This is of fundamental importance as we
embed our recently developed Inclusion and
Diversity Strategy across the Group.
Overall the Committee and the Board has
undertaken a significant amount of work
in the nomination and governance space
during FY23 – reforming the governance
structure through the establishment of a
new Sustainability Committee, refreshing
our Board membership and renewal of our
Committee membership. Looking to FY24,
Strategic Report | Directors’ Report | Financial Statements | Other Information 82
Greencore Group plc Annual Report and Financial Statements 2023
Report of the Audit and Risk Committee
REPORT OF THE
AUDIT AND RISK
COMMITTEE
“The Committee continued to focus on the
issues relevant to the Group’s financial
reporting, considering how business
performance is reflected in financial
reporting, assessing key accounting
judgements and ensuring ongoing quality
of the related disclosures.”
Dear Shareholder,
On behalf of the Audit and Risk Committee
(the ‘Committee’) and the Board, in my first
year as Chair, I am pleased to present the
Report of the Committee for the year ended
29 September 2023 (‘FY23’). This report
describes how the Committee has carried
out its responsibilities during the year.
The Committee continued to focus on
the issues relevant to the Group’s financial
reporting, considering how business
performance is reflected in financial
reporting, assessing key accounting
judgements and ensuring the ongoing
quality of the related disclosures. The
Committee receives updates on the system
of internal control and risk management at
every meeting.
Role of the Committee
The Committee’s role, authority, duties and
scope are set out in its Terms of Reference
which are available on the Governance
section of our website, www.greencore.com.
The Committee reviews the Terms of
Reference annually and any amendments
are presented to the Board for approval. The
Terms of Reference were last reviewed in
September 2023.
The Committee is currently comprised of five
Non-Executive Directors, all of whom are
considered by the Board to be independent.
At the end of 2022, Helen Weir stepped
down from the Board and as Chair of the
Committee and I would like to thank Helen
for her commitment and contribution to the
Membership of the Committee
Committee members
Alastair Murray1
Linda Hickey
Anne O’Leary
Helen Rose
Date appointed
1 February 2023
1 February 2021
1 February 2021
11 April 2018
Harshitkumar (Hetal) Shah
1 April 2023
Leslie Van de Walle2
Helen Weir3
1 January 2023
1 February 2020
Attendance at
scheduled Committee
meetings during FY23
2/2
4/4
4/4
4/4
2/2
1/1
1/1
1. Alastair Murray was appointed as Committee Chair on 1 February 2023.
2. Leslie Van de Walle was appointed as Interim Committee Chair between 1 January 2023 to 31 January 2023
and resigned from the Committee on 31 January 2023.
3. Helen Weir stepped down as Committee Chair and resigned from the Committee on 31 December 2022.
Committee. In February 2023, I joined the
Board and assumed the role of Chair of the
Committee and, in April 2023, we welcomed
Harshitkumar (Hetal) Shah to the Board
and as a member of the Committee. Hetal,
Helen Rose and I have recent and relevant
financial experience. Having been involved in
risk management in TSB Banking Group plc,
Helen Rose also has specific risk expertise.
As a whole, the Committee has competence
relevant to the Company’s sector.
Further details on the Committee members’
experience and qualifications can be found
in our biographical details as set out on
pages 62 and 63.
In accordance with the Committee’s Terms
of Reference, the Group General Counsel
and Company Secretary or their nominee
acts as Secretary to the Committee.
Committee meetings
During FY23, the Committee held four
scheduled meetings which were attended
by all Committee members. The meetings
of the Committee are generally scheduled
to take place in advance of Board meetings.
This allows the Committee Chair to provide
the Board with a detailed update on the key
items discussed at the Committee meetings.
During FY23, regular attendees at
Committee meetings included the Chief
Executive Officer (‘CEO’) as well as the Chief
Financial Officer (‘CFO’), the Interim CFO,
the Group Financial Controller and Director
Internal Audit and Risk. Representatives of
the external auditor, Deloitte Ireland LLP
(‘Deloitte’), also attended each scheduled
meeting. In addition, other individuals from
the Group attended Committee meetings
and provided the Committee with updates
on certain key areas of the business, as
requested, including the Chief Commercial
Officer, Chief People Officer, Chief Operating
Officer, Head of Legal and Compliance, the
Health, Safety and Environment Director and
the Group Technology Director.
In my capacity as Chair of the Committee,
I am available to all Board members to
discuss any audit or risk related issues they
may have, either on a collective or individual
basis. During FY23, I met with the external
auditor and the Director Internal Audit and
Risk, without management, on a regular
basis. The Director Internal Audit and Risk,
whose appointment or removal is subject
to Committee approval, has direct access to
both myself and the Committee.
How the Committee has discharged
its responsibilities during FY23
Key areas of focus
The Committee has an extensive agenda
which focuses on monitoring the
effectiveness of risk management within
83
the Group as well as ensuring the integrity
of the Group’s financial reporting, that any
judgements made are appropriate, that the
external auditor is effective in its role and
that the Group has an effective internal
controls framework. During FY23, the work
of the Committee principally fell under the
following key areas:
Risk management and
internal controls
The Committee supports the Board in its duties to review and monitor, on an ongoing basis, the effectiveness of
the Group’s system of internal controls and risk management.
In order to fulfil these duties, during the year under review, the Committee:
•
received progress updates on the FY23 Internal Audit Plan which covered, amongst other areas, capital projects,
sustainability and cyber security as well as health and safety;
reviewed and approved the FY24 Internal Audit Plan which sets out the planned activities for the year ahead, as
well as Internal Audit staffing and resources. The FY24 plan is informed by principal and functional risk registers;
•
• agreed the refreshed risk management policy and framework and reviewed the Group Statement of Risk
Appetite;
received presentations on principal and emerging risks and discussed, with senior management, the material
internal controls and assurance processes which exist to mitigate and manage these risks in accordance with
the Board’s risk appetite;
received regular reports from the Risk Oversight Committee (‘ROC’), which is comprised of the Group Executive
Team. The ROC was established to support the Committee with ongoing monitoring of the risk management
process;
formally met with the Director Internal Audit and Risk who provided reports on the key audit findings, themes
and key issues noted throughout the reviews and progress on closure of actions including any overdue actions
resulting from business process and control reviews; and
reviewed the Group’s Treasury Policy.
•
•
•
•
In light of the above, the Committee continues to be satisfied that the Group’s internal controls environment
remains appropriate and effective and has reported this opinion to the Board.
Financial reporting
The Committee reviewed the form and content of the Annual Report and Financial Statements, as well as the half year
and full year results statements including the key estimates and judgements made by management in the preparation
of the Financial Statements.
During FY23, the Committee:
• considered the FY22 Full Year Financial Statements and the FY23 Interim Results Statement. The Committee
reviewed and challenged management on the appropriateness of estimates and judgements made in the
preparation of the Financial Statements;
reviewed the judgements made with respect to which items should be disclosed separately as exceptional items in
the Financial Statements to confirm that these were in line with policy;
•
• considered the Group’s tax compliance and tax strategy;
•
•
reviewed papers on the Group’s significant accounting judgements and estimates; and
reviewed the Group’s accounting policies and management’s assessment of the impact of IFRS amendments
effective during FY23 on the Financial Statements and the potential impact of upcoming amendments to IFRS on
the Group.
Strategic Report | Directors’ Report | Financial Statements | Other Information 84 Greencore Group plc Annual Report and Financial Statements 2023
Report of the Audit and Risk Committee continued
External audit
The Committee reviewed the quality of the external audit and provided oversight in relation to the external auditor’s
relationship with the Group including agreeing the external auditor’s terms of engagement and monitoring the
independence and objectivity of the external auditor, Deloitte.
Directors’ compliance
statement
Going concern and
viability statement
In November 2022, the Committee also discussed the FY22 external auditor’s report to the Committee with
Deloitte, considering their findings, conclusions and the recommendations arising from their work. It also reviewed
and agreed the Letter of Representation.
Progress on the implementation of the recommendations from the external auditor and updates to internal
controls formed part of the management reports to the Committee during FY23.
The Committee met with Deloitte in January, May and September 2023 to consider and challenge the scope of the
annual FY23 external audit plan, which was set taking into consideration the nature of risks to, and the strategy of,
the Group.
The Committee reviewed the appropriateness of the Directors’ Compliance Policy Statement and also considered
reports from senior management in respect of the compliance structures and arrangements in place for the year
under review to ensure the Company’s material compliance with its relevant obligations. Following the review,
as well as a review of the report from the Internal Audit function in respect of the compliance structures and
arrangements, the Committee confirmed to the Board that, in its opinion, the Company is in material compliance
with its relevant obligations.
The Committee’s role as delegated by the Board, is to carry out an assessment of the adoption of the going
concern basis of accounting and report to the Board accordingly. The Committee challenged and scrutinised
management’s detailed assessment of the Group’s going concern model, including examining and challenging the
underlying assumptions and analysis presented in support of the going concern statement. Financial models based
on a number of scenarios which included inflation and supply side disruption were considered by the Committee
along with an assessment of the borrowing facilities available. Further information is set out below and on pages 58
and 128.
For the purpose of the viability statement, the Committee’s role, as delegated by the Board, is to review the
underlying processes and key assumptions underpinning the viability statement and report to the Board
accordingly. The Committee reviewed management’s work in assessing the Group’s current position and potential
risks facing the Group, including the results of the financial modelling of the principal risks identified as having the
greatest potential impact on the Group’s viability and the Group’s ability to meet its liabilities in the medium-term,
as well as the appropriateness of the Group’s choice of a three year assessment period. Following this review, the
Committee was satisfied that management had conducted a robust assessment of the Group’s emerging and
principal risks and recommended to the Board that it approve the viability statement, as set out on page 58.
Monitoring the integrity of the FY23 Financial Statements including significant judgements and formal announcements
relating to the Group’s financial performance:
• we reviewed the appropriateness of Group accounting principles, practices and policies and monitored changes to, and compliance with,
accounting standards;
• we reviewed the half year and full year results statements for FY23. Before recommending their release to the Board, we compared the
results to management accounts and budgets, focusing on key areas of judgement, and also discussed the statements with the external
auditor; and
• we reviewed, prior to making recommendations to the Board, the Annual Report and Financial Statements for the year ended
29 September 2023.
85
In undertaking our review, we discussed with management and the external auditor the significant judgements and estimates that had been
applied. These were:
Goodwill
Accounting for
exceptional items
Taxation
Provisions
Greencore Group
plc investment in
subsidiaries
(Company only)
Retirement benefit
obligations
The Group had goodwill of £447.3m at 29 September 2023 as set out in Note 12 to the Group Financial Statements.
Management’s judgement is required in testing the carrying value of goodwill for impairment when comparing
the value in use of the cash generating unit (‘CGU’) to the carrying value. The value in use was calculated using
cashflow projections based on the Group’s approved budget and strategic plans which were then projected out to
perpetuity. The Committee considered the methodology applied and the key assumptions used in the assessment,
which included future profitability, terminal growth and discount rates. The Committee was satisfied that there was
sufficient headroom and that no impairment was required.
The Group accounting policy sets out the items that the Group believes it is appropriate to disclose separately as
exceptional items. Management’s judgement on whether an item should be classified as exceptional is presented
to the Committee as part of the papers provided to the Committee on significant judgements and estimates. The
Committee challenges management on presentation of items as exceptional. The Committee was satisfied that the
costs and income that were identified as exceptional are appropriate in the FY23 Financial Statements.
Provisions for current and deferred taxation require judgement, including where the treatment of certain items
may be the subject of debate with tax authorities. The Committee received updates relating to both the interim
and FY23 accounting judgements and estimates around the Group’s tax profile and provisions. The Committee
considered the appropriateness of the provisions and the supporting information provided by management. The
Committee was satisfied that the accounting and disclosures relating to provisions for taxation are appropriate in
the FY23 Financial Statements.
The Group has provisions for lease obligations, remediation and closure and other provisions for potential litigation
and warranty claims. The primary reason for the movement in provisions during FY23 related to the use of the
provision relating to the Better Greencore change programme and an increase in provision for remediation.
Following discussions with management, the Committee was satisfied with the completeness and classification of
the provisions for FY23.
The Company has an investment in subsidiary undertakings of £765.1m. Management performed a review of the
recoverability of the Company’s investment in subsidiaries by performing a bottom-up review of the investments
throughout the Group to determine if an impairment was required. On the basis of this analysis, the Committee
was satisfied that an impairment of the Company’s investment in subsidiaries of £1.5m was required.
The Group had net retirement benefit obligations of £20.1m at 29 September 2023 as set out in Note 24 to
the Group Financial Statements. The estimation of, and accounting for, retirement benefit obligations involve
assessments made in conjunction independent actuaries. In FY23, there was a significant change in the Group’s
retirement benefit obligations as a result of the completion of the annuity buy in transaction for the Irish Defined
Benefit Pension Scheme, along with other changes in assumptions for both the Irish and UK Defined Benefit
Schemes. Management prepared an accounting paper on the underlying assumptions, along with the accounting
for the annuity buy in transaction and discussed them with the Committee. The Committee was satisfied that the
estimates made are appropriate at 29 September 2023.
In the previous year, going concern had
been identified as a significant judgement
by management. In FY23, management has
determined that going concern is no longer
considered to be a significant judgement
with discussions held with the Committee to
determine if this was appropriate. This Group
has continued to improve performance
during FY23, the external environment has
stabilised, and the Group has continued to
meet its covenant requirements with the key
leverage covenant at 1.2x at 29 September
2023. Based on the discussions with
management, the Committee is satisfied that
going concern is appropriate to no longer be
a significant judgement for FY23.
Fair, balanced and understandable
assessment
Each year, in line with Provision 25 of the
2018 UK Corporate Governance Code
(the ‘Code’) and the Committee’s Terms
of Reference, the Committee is asked by
the Board to consider whether or not,
in its opinion, the Annual Report and
Financial Statements are fair, balanced and
understandable (‘FBU’) and whether or not
it provides the information necessary for
shareholders to assess the Group’s position
and performance, business model and
strategy.
There is an established process in place
to support the Committee in making this
assessment. The main elements of this
process are:
• an internal FBU Group comprising senior
management from Finance, Legal and Tax
considered the draft FY23 Annual Report
and Financial Statements focusing on a
number of ‘key areas of focus’ as outlined
below;
in advance of its November 2023
meeting, the Committee received a near-
final draft of the FY23 Annual Report and
Financial Statements, together with the
list of areas to focus on;
•
• at the November meeting, the FBU
•
Group reported its observations and
conclusions, including supporting
evidence, to the Committee; and
the Committee considered the processes
and controls involved in preparing
the FY23 Annual Report and Financial
Statements and discussed the findings
of the FBU Group, as well as the
observations of individual Committee
members, and the external auditor.
Following its review this year, the Committee
concluded that it was appropriate to confirm
to the Board that the FY23 Annual Report
and Financial Statements were fair, balanced
and understandable and provided the
information necessary for shareholders to
assess the Group’s position, performance,
business model and strategy. The FBU
statement appears on page 113 of the
Directors’ Report.
Strategic Report | Directors’ Report | Financial Statements | Other Information 86
Greencore Group plc Annual Report and Financial Statements 2023
Report of the Audit and Risk Committee continued
The ‘key areas of focus’ included ensuring
that the:
• overall message of the narrative
reporting is consistent with the Financial
Statements;
• overall message of the narrative
reporting is appropriate, in the context
of the industry and the wider economic
environment;
• FY23 Annual Report and Financial
Statements is consistent with messages
already communicated to investors,
analysts and other stakeholders;
• FY23 Annual Report and Financial
Statements, taken as a whole, are
internally consistent and understandable;
• Chair’s statement and CEO’s review
include a balanced view of the Group’s
performance and prospects, and of the
industry and market as a whole;
• any summaries or highlights are balanced
and reflect the position of the Group
appropriately; and
• examples are of strategic importance
and do not over-emphasise immaterial
matters.
Risk management and internal controls
The Board has overall responsibility for the
Group’s system of internal controls and risk
management and determines our strategic
approach to risk. The Board’s approach to
risk management is set out in the Risks and
risk management section of this Report on
pages 49 to 57. The Committee reviews the
effectiveness of the system and ensures that
there is a process in place for identifying,
evaluating and managing the significant risks
to the achievement of the Group’s strategic
objectives.
Under Irish company law (Section 327(1) (b)
of the Companies Act 2014) and Provision
28 of the Code, the Directors are required to
give a description of the principal risks and
uncertainties which the Group faces. The
principal risks and uncertainties identified
are set out on pages 52 to 57 and form
part of the Directors’ Report. The principal
risks facing the Group include people risks,
operational risks, strategic risks, commercial
risks and financial risks.
Whilst the Board as a whole is responsible
for the Group’s system of internal controls,
the Board has delegated responsibility for
monitoring the effectiveness of the Group’s
risk management and internal controls
systems to the Committee. The Committee
has conducted a review of the effectiveness
of the Group’s risk management and internal
controls systems, including those relating
to the financial reporting process. The
Committee oversees a risk-based internal
audit programme, including periodic audits
of the risk processes across the Group. In
order to monitor the effectiveness of the
risk management system, the Committee
also includes risk deep-dives on its meeting
agenda, covering key risk areas across the
Group, and receives reports on the efficiency
and effectiveness of internal controls. Each
of the individual areas of the business and
functional management teams oversee
the process through which principal and
emerging risks and uncertainties relating to
their part of the business are identified.
The Board believes that the individual
business areas and functional
management teams are best placed to
identify the principal and emerging risks
and uncertainties associated with their
respective areas of business. During FY23,
the Committee reviewed reports from
the ROC, which provide oversight of the
suitability and effectiveness of the Group’s
risk management systems, including the
risk management policy, protocols and
governance. In addition, the ROC reviews
and considers emerging risks which may
impact the Group in the future. Risks
identified and associated mitigating controls
are subject to review by the Board and the
Committee on a regular basis.
The process for identifying, evaluating and
managing risk has been in place throughout
the financial year. This system of internal
controls is designed to manage and
mitigate, rather than eliminate, the risk of
failure to achieve business objectives. The
internal controls systems can only provide
reasonable assurance, rather than absolute
assurance, against material misstatement or
loss. Our internal controls and risk oversight
are monitored and continually improved to
ensure their compliance with the Financial
Reporting Council Guidance on Risk
Management, Internal Controls and Related
Financial and Business Reporting.
In analysing and reviewing risks, the
Committee and the Board consider the:
• nature and extent of the risks, including
principal risks facing the Group, as well as
emerging risks;
• extent and categories of risks it regards
•
as desirable or acceptable for the Group
to bear;
likelihood of the risk concerned
materialising and the impact of associated
risks materialising as a consequence;
• Group’s ability to reduce the incidence
and impact on its business of risks that do
materialise;
• operation of the relevant controls and
controls processes;
• costs of operating particular controls
relative to the benefits in managing
related risks; and
• Group’s risk culture.
The key elements of the Group’s system of
internal controls are as follows:
• clearly defined organisation structures
and lines of authority, including delegated
authorities;
• corporate policies for financial reporting,
treasury and financial risk management,
information technology and cyber
security, project appraisal, capital
expenditure, health and safety, food
safety and corporate governance;
• annual budgets and strategic business
plans for the Group, identifying key risks
and opportunities;
• monitoring of performance against
•
•
budgets and forecasts and reporting
thereon to the Directors on a regular
basis;
the Internal Audit function which
independently reviews key business
processes and controls and their
effectiveness; and
the Audit and Risk Committee, which
approves audit plans, monitors
performance against plans and deals with
significant control issues raised by Internal
Audit or the external auditor.
The preparation of financial reports is
managed by the Group Finance team.
The Group financial reporting process is
controlled using the Group accounting
policies and reporting systems. The Group
Finance team provides guidance on the
preparation of financial information. The
Group seeks to continually test and improve
its internal controls environment.
Details of the Group’s hedging and financial
risk management policies are set out in Note
21 and 22 to the Group Financial Statements,
respectively. Details of the Group’s financial
Key Performance Indicators (‘KPIs’) are set
out on pages 40 and 41. These disclosures
form part of the Directors’ Report.
During the year under review, Finance
Internal Controls co-ordinated the Finance
Internal Controls Questionnaire, a self-
assessment by senior management on the
effectiveness of key controls. The purpose
of this questionnaire is for management to
identify any controls weaknesses, which are
subsequently addressed. This year’s self-
assessment focused particularly on internal
controls over financial reporting.
Finally, the Directors, through the use of
appropriate procedures, systems and the
employment of competent personnel, have
ensured that measures are in place to secure
compliance with the Company’s obligation
to keep adequate accounting records,
which are kept at the registered office of the
Company.
87
Whistleblowing arrangements
At Committee meetings held during the
year, the Committee reviewed the Group’s
arrangements for colleagues and/or third
parties to raise concerns, in confidence,
relating to ethical, auditing or other risk
issues and/or improprieties or areas of
concern. The Committee received reports
on all concerns which had been raised
either via the Group’s externally facilitated
and independent whistleblowing hotline,
or via alternative means (for example, by
email direct to the Company). The Group’s
externally facilitated whistleblowing hotline
is operated by an independent external
provider, is multilingual and is accessible
to all colleagues and third parties either by
phone (toll free 24 hours per day, seven days
a week), or via a web portal. In reviewing
the reports, the Committee also analysed
the issues raised by location, category of
concern raised and investigation process,
along with the outcome of the investigations
into the issues.
The arrangements in place across the
Group are underpinned by the Group’s
Whistleblowing and Speak Up Policy, as
well as the Group’s Code of Ethics and
Business Conduct. There are whistleblowing
posters on notice boards at all Greencore
sites and whistleblowing arrangements are
explained to all new colleagues as part of
their induction. The Group is at all times
committed to ensuring that any concerns
raised, however received, are appropriately
investigated.
External audit
The Committee, on behalf of the Board,
is responsible for the relationship with the
external auditor and for monitoring the
effectiveness and quality of the external
audit process. The assessment of the
external audit forms an integral part of the
Committee’s activities. The Committee
evaluates the effectiveness of the external
audit through an assessment of external and
internal factors, taking into consideration
the Group’s business model and strategy,
business risks, and its perception of the
reasonable expectations of the Group’s
stakeholders. Following a formal audit
tender process, which was conducted in
FY17, Deloitte was appointed as the Group’s
external auditor and FY19 marked the first
year of the Deloitte external audit. The lead
partner for the audit of the Group’s Financial
Statements in respect of FY23 is Kevin
Sheehan who has held this role since FY21.
In November 2023, in advance of the
finalisation of the Group’s FY23 Annual
Report and Financial Statements, the
Committee received a report from Deloitte
on its key audit findings, including the
key risk areas and significant judgements.
In addition, the Committee considered
the Letter of Representation and the
management letter.
Effectiveness
During FY23, the Committee reviewed
and assessed the quality and effectiveness
of the FY22 external audit process based
on evidence obtained throughout the
financial year by reference to the scope
of the audit work undertaken, monitoring
performance against the agreed audit plan,
presentations to the Committee, feedback
from management involved in the audit
process, and separate review meetings held
without management. The Committee also
considered the experience and knowledge
of the external audit team and the results of
post-audit reviews with management and
the Committee. Overall, the Committee
remained satisfied with the effectiveness
of Deloitte based on its expertise having
considered the audit team, their approach,
lines of enquiry and robust challenge.
Following this review, the Committee
concluded that the external audit was
effective and was satisfied with the level of
services provided by Deloitte.
The Committee regularly meets with the
external auditor, absent management, to
discuss any issues the external auditor may
wish to raise directly with the Committee.
Independence
To safeguard the external auditor’s
independence and objectivity, the
Committee takes into account the
information and assurances provided by
the external auditor confirming that all of
its network firms and engagement team
members are independent of the Company.
In May 2023, the external auditor’s Letter of
Engagement was reviewed by the Committee
on behalf of the Group in advance of the
commencement of the audit. The Letter
of Engagement sets out confirmation of
Deloitte’s independence within the meaning
of the regulations and professional standards.
The Committee has two separate policies
in place in order to safeguard the external
auditor’s independence and objectivity.
One policy sets out comprehensive
procedures surrounding the provision of
non-audit services by the external auditor.
The procedures are also set out in the
Committee’s Terms of Reference. In line with
that policy, the Committee reviewed the level
of fees incurred during FY23 for the provision
of non-audit services. During FY23, Deloitte
provided limited sustainability assurance
services on green loan KPI targets which
equated to c.0.3% of the overall external
audit fee. The Committee was satisfied that
the work was best handled by the external
auditor because of its knowledge of the
Group and the services provided did not
give rise to threats to independence. No
further non-audit services were provided by
Deloitte. See Note 4 to the Group Financial
Statements.
The second policy restricts the Group
from hiring key members of the external
audit team for a specified period post their
employment with the external auditor. In
addition, any offer to a former employee
of the audit firm must be pre-approved by
the Committee where the offer is made
in respect of a senior executive position.
Both policies are circulated to management
regularly and reviewed by the Committee
on an annual basis. These policies were
reviewed and updated in FY23. No former
employees of Deloitte to whom the policies
would apply were hired by the Group during
FY23.
Based on our review of the services provided
by Deloitte, and discussion with the lead
audit partner, the Committee is satisfied
as to the external auditor’s effectiveness,
independence and objectivity, and,
accordingly, it is intended that an advisory
resolution will be put to the shareholders at
the forthcoming Annual General Meeting in
2024 in relation to the continuation in office
of Deloitte as external auditor.
Committee effectiveness
A FY23 review of the operation, performance
and effectiveness of the Committee
was conducted by way of one-to-one
conversations between the Committee
Chair and each of the members, supported
by an analysis of how the Committee was
performing against key areas of its Terms
of Reference. A performance evaluation
discussion took place at the meeting in
September 2023. The review confirmed
that the Committee continues to operate
effectively and efficiently and has the skills
and expertise required in order to perform its
role appropriately. The Committee agreed to
continue focus on risk matters and internal
controls for FY24.
I would like to extend my thanks to my
Committee colleagues for their work and
support during the year. The Committee will
continue to provide quality disclosures on its
activities.
Alastair Murray
On behalf of the Audit and Risk Committee
27 November 2023
Strategic Report | Directors’ Report | Financial Statements | Other Information 88
Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration
REPORT ON
DIRECTORS’
REMUNERATION
“FY23 has been a year of significant leadership change
and, acknowledging the challenging environment
in which the Group has operated, the Committee
commends the Group Executive Team on its strong
and stabilising performance during the year.”
Dear Shareholder,
On behalf of my colleagues on
the Remuneration Committee (the
‘Committee’) and the Board, I am pleased
to present the Committee’s Report on
Directors’ Remuneration (the ‘Report’)
which comprises the Annual Report on
Remuneration for the financial year ended
29 September 2023 (‘FY23’) and, on pages
90 and 91, our Remuneration at a Glance
section, to bring added clarity and simplicity
to the Report.
At our AGM in January 2023, we submitted
our 2023 Remuneration Policy (the ‘Policy’)
to shareholders for approval in accordance
with the three-year timeframe set out in
the UK Directors’ Remuneration Reporting
Regulations. We are pleased to note that,
at the AGM, the Policy was approved and
supported by 96.55% of our shareholders
by way of an advisory vote. In the interests
of succinct reporting, the Policy is not
reproduced in this Report but can be found
on our website at www.greencore.com.
At the outset of this year’s Report, I would
like to acknowledge the significant amount
of change the organisation has seen in the
last year. In addition to a new Chief Executive
Officer (‘CEO’), Dalton Philips, we will shortly
have a new Chief Financial Officer (‘CFO’)
and it is important at this juncture to note
that, mindful of changes to the Group that
have occurred in recent years, including
for example the refocus on the UK market
and our core businesses, the Committee
has reset Executive Director remuneration
to reflect the present operations of the
Group. Consequently, the FY23 base salary
for Dalton Philips of €700,000 and the FY24
base salary of €400,000 for incoming CFO,
Catherine Gubbins, each represent an 18%
decrease on those of their predecessors.
In addition, the annual bonus and LTIP
opportunities have been revised downwards
(as set out on page 91). The Chair’s additional
fee was also rebased and decreased by 30%,
on Leslie Van de Walle’s appointment. We
believe that the Committee has taken the
appropriate action, given the factors outlined
above, and naturally reserves the ability to
reconsider Executive Director remuneration
in light of future changes to those factors
and in accordance with the Policy.
Overall performance and context
The Group has delivered strong performance
in FY23, operating through a highly
inflationary and difficult trading environment
for consumers. Dalton Philips has been
instrumental in leading the Group Executive
Team and wider management in delivering
the strong outturn. In evaluating the
outcome of its decisions, the Committee
was mindful of the impact of the inflationary
environment and cost-of-living increases on
stakeholders, in particular our colleagues.
Executive Director changes in FY23
On 17 April, it was announced that Emma
Hynes would be stepping down from her
role as Executive Director and CFO following
the release of the Group’s half-year results
in May.
Emma agreed to remain in the business
for a transition period to ensure a smooth
succession process and to provide continuity
in light of the significant amount of change
during the year and, accordingly, the
Committee deemed it appropriate to grant
Emma ‘good leaver’ status. The Group’s
post-employment shareholding policy
continues to apply.
On 5 September, the Group announced
that Catherine Gubbins had been appointed
to the role of Executive Director and CFO
and would take up her role in early 2024.
Catherine will join on an annual salary
of €400,000 and is eligible to receive a
pension contribution of 8% of salary, in line
with the pension contribution currently
available to the wider colleague base. For
FY24, Catherine will be eligible to receive a
performance-related bonus of up to 120%
of salary and a FY24 PSP award with a face
value of 150% of salary (within the Policy
maximum of 200% of salary).
Remuneration in FY23
Annual Bonus Plan (‘ABP’)
The FY23 ABP was based 50% on Adjusted
Operating Profit (‘AOP’), 25% on Free Cash
Flow (‘FCF’) and 25% on personal and
strategic objectives. Despite the challenging
operating environment of FY23, and the
backdrop of sustained high inflation levels,
the Company delivered a strong AOP
outturn, above the on-target level set at
the start of the year. FCF performance was
also strong and exceeded the maximum
performance level set at the start of the year.
The CEO’s personal and strategic objectives
focused on Dalton’s transition into the role
of CEO, creating a cohesive and aligned
Group Executive Team, building relationships
with the Group’s stakeholders and resetting
the Group’s strategy. In addition, Dalton
was assessed on the Group’s key pillars of
sustainability, and inclusion and diversity.
89
Finally, I would like to thank my fellow
members on the Committee and the wider
Board for their valuable contribution to the
remuneration agenda during FY23.
Linda Hickey
On behalf of the Remuneration Committee
27 November 2023
Business performance highlights
• Group reported revenue increased
10.0%, with overall manufactured
volume growth of 0.5%, ahead of
market growth.
• Adjusted Operating Profit up 5.7%
to £76.3m with Adjusted Operating
Margin of 4.0%.
• Adjusted EPS of 9.3 pence, a 1.1%
increase on prior year.
• As at the end of FY23, the Group
had returned £35m of the intended
£50m return of capital as announced
in May 2022. In October 2023, the
Group announced a further £15m
share buyback programme reflecting
the strength of the balance sheet and
confidence in future prospects.
• New five-year £350m sustainability-
linked revolving credit facility agreed
post year-end providing significant
financial flexibility for future growth.
Taking into account his strong performance
and delivery in relation to these objectives,
the Committee assessed the overall ABP
payout for Dalton Philips to be 82% of
maximum. The CFO’s personal and strategic
objectives focused on supporting the
leadership transition, in particular providing
significant support to Dalton, strategic and
financial objectives focusing on deleveraging
the balance sheet, inflation recovery and
profitability, while also being assessed on
environmental, social and governance
(‘ESG’) data methodology and collection
and helping develop and embed the Group’s
new risk management framework. Taking
strong performance and delivery into
account, particularly in relation to transition
support, the Committee assessed the overall
ABP payout for Emma Hynes to be 79% of
maximum. Further details are set out on
pages 96 to 99.
Performance Share Plan (‘PSP’)
The FY21 PSP, while departing from the
approach of previous years, was designed
to reinforce the delivery of the strategy
and shareholder value, in what was a very
uncertain and constantly changing external
environment at the time. Notwithstanding
the Group’s resilient performance over what
was a challenging performance period,
the first tranche of the FY21 PSP (carrying
a 15% weighting) lapsed in full in FY22. The
second tranche (carrying a 25% weighting)
also did not achieve its performance target
and lapsed in full in FY23. The third and
final tranche (carrying a weighting of 60%)
is still in flight at the date of this Report,
but its performance period is substantially
completed. Based on performance to the
date of signing this Report, this third tranche
of the award is also expected to lapse in full.
Remuneration in FY24
As noted above, the Committee considers
the Policy approved by shareholders at the
2023 AGM to be appropriate in supporting
the Group’s strategy, and that it remains
aligned with shareholders’ interests and
reflects evolving best practice and regulatory
developments. In considering Executive
Director remuneration for FY24, the
Committee remained mindful of the broader
context (including external market conditions
and the Group’s operating environment)
in addition to the Group’s internal pay
policies and practices. The Committee
also considered actions being taken by
management to support our wider colleague
base through the prevailing inflationary
environment and ongoing cost-of-living
pressures, and actions taken and being taken
in relation to sustainability, and inclusion and
diversity.
Salary
Following a review of relevant market data,
we have agreed an increase in salary for the
CEO of 3.5%. This increase is effective from
1 October 2023 and will be lower than the
average increase to be awarded across the
wider workforce (which will be determined
in January 2024 and backdated to 1 October
2023).
ABP
The ABP opportunity will be 150% of salary
for the CEO and, as noted above, 120% of
salary (pro rated for FY24) for the incoming
CFO. The financial element of the ABP
(75% of the opportunity) will remain based
on a combination of Adjusted Operating
Profit (weighted 50%) and Free Cash Flow
(weighted 25%), with the remaining 25%
of the opportunity linked to personal and
strategic objectives. For FY24, this element
will continue to include objectives linked to
our Sustainability Strategy and inclusion and
diversity. Performance for each element will
be measured over the full year. The targets
and the associated outturn will be disclosed
in the FY24 Annual Report on Remuneration,
in line with prior practice.
PSP
The FY24 PSP opportunity for the CEO
is 175% of salary and for the CFO is 150%
of salary (within the Policy maximum
of 200% of salary), with vesting based
on performance over the three-year
performance period against three equally
weighted measures. The measures will
remain unchanged from those employed
for the FY23 awards: Adjusted Earnings per
Share (‘Adjusted EPS’), relative TSR (against
our tailored comparator group), and Return
on Invested Capital (‘ROIC’). The targets for
the FY24 award are disclosed on page 102.
Pension
Pension contributions, at 8% of base salary
for the Executive Directors, remain in line
with rates available to the wider workforce.
Concluding remarks
FY23 has been a year of significant
leadership change and, acknowledging the
challenging environment in which the Group
has operated, the Committee commends
the Group Executive Team on its strong and
stabilising performance during the year.
I would like to thank shareholders and proxy
advisers for their support of our new Policy
at the 2023 AGM. The Committee believes
that our approach to remuneration in
FY23 and for FY24 supports the continued
objective of driving the Group’s performance
while recognising the wider stakeholder
experience, and I hope our efforts will be
reflected in your support at the 2024 AGM.
Strategic Report | Directors’ Report | Financial Statements | Other Information 90 Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Remuneration at a glance
The purpose of this section is to provide an overview of the Group’s performance in FY23, as well as the remuneration received by our
Executive Directors. Full details can be found in the Annual Report on Remuneration on pages 94 to 106.
The 2023 Remuneration Policy (‘Policy’) was approved by an advisory shareholder vote at the AGM of the Company held on 26 January 2023.
The Policy took effect from the date of the AGM and will apply for a period of up to three years.
Remuneration principles
The following principles are drawn from Provision 40 of the 2018 UK Corporate Governance Code (the ‘Code’) and remain the Committee’s
framework to guide remuneration decisions:
Principle/Provision 40 pillar
In action
Alignment and fairness
– alignment to culture
Pay-for-performance
– risk
– predictability
– proportionality
Transparency and simplicity
– clarity
– simplicity
• Linking variable remuneration to key pillars of success for Greencore;
• Applying the same high-level remuneration principles consistently to all colleagues across the Group;
• To the extent possible, offering share plans to all eligible colleagues;
• Operating shareholding guidelines (including for a period post-employment), bonus deferral and a post-
vesting holding period for Executive Directors’ PSP awards to ensure alignment with shareholders and
long-term performance; and
• Keeping shareholder value creation and the stakeholder context in sharp focus.
• Setting targets that are appropriately stretching and vesting levels that are reflective of the shareholder
experience;
• Avoiding reward for mediocre performance; and
• Ensuring personal and strategic objectives are defined, accurately assessed and clearly communicated.
• Communicating clearly and effectively all decisions to shareholders through shareholder engagement in
the Annual Report on Remuneration; and
• Using a simple incentive structure based on measures that are central to our strategy and business model.
FY23 remuneration outcomes
FY23 Annual Bonus Plan (‘ABP’)
The annual bonus for FY23 was based on a mix of financial elements (weighted 75% of the bonus) and personal and strategic objectives
(weighted 25% of the bonus). The maximum annual bonus opportunity in FY23 was 150% of basic salary for the Chief Executive Officer (‘CEO’)
and Chief Financial Officer (‘CFO’).
The financial performance targets and actual performance outcomes for FY23 are set out in the table below. Further details on the
achievement of personal and strategic objectives are set out on pages 97 to 99.
Measure
Adjusted Operating Profit
Free Cash Flow
Financial element
50%
25%
75%
Weighting
(% of total)
Threshold
(0% payout)
Target
(50% payout)
Maximum
(100% payout)
Actual FY23
outturn/
achievement
Resulting bonus
outcome
Performance targets
£70.2m
£35.2m
£74.1m
£39.3m
£81.9m
£43.5m
£76.3m
32% out of 50%
£56.8m
25% out of 25%
CEO Personal and strategic objectives 25%
See pages 97 and 98 for details
CFO Personal and strategic objectives
25%
See page 99 for details
Discretion applied by the Committee
CEO Payout
CFO Payout
57% out of 75%
25% out of 25%
22% out of 25%
n/a
82% out of 100%
(123% of salary)
79% out of 100%
(119% of salary)
FY21 Performance Share Plan (‘PSP’)
As previously reported, the FY21 PSP award comprised three tranches, vesting subject to absolute TSR performance over periods of one, two
and three years from the date of grant on 8 January 2021. The Year 2 tranche lapsed in full during the year, and, while the Year 3 tranche is still
in flight at the date of this Report, the performance period has largely been completed. Based on performance to date, the Year 3 tranche is
also expected to lapse in full.
91
Implementation of the 2023 Remuneration Policy in FY24
Element of pay
Fixed remuneration
Base salary
Pension
Benefits
Variable pay
Annual Bonus Plan (‘ABP’) and Deferred Bonus Plan (‘DBP’)
Implementation for FY24
Dalton Philips: €724,500 (+3.5% increase).
Catherine Gubbins: €400,000, effective on appointment to the Board
in early 2024.1
In line with the Policy, Dalton Philips and Catherine Gubbins will each
receive a pension contribution of 8% of salary, which is in line with the
pension contribution currently available to the wider colleague base.
In line with Policy.
150% of salary for the CEO and 120% of salary for the incoming CFO.
The performance measures for FY24 are: 50% Adjusted Operating
Profit, 25% Free Cash Flow and 25% personal and strategic objectives.
50% of any bonus earned will be deferred into shares for three years
under the DBP, consistent with the Policy.
Performance Share Plan (‘PSP’)
CEO – 175% salary
CFO – 150% salary
Safeguards and risk management
PSP awards will continue to be based on three-year performance
against three performance measures: 1/3rd cumulative Adjusted EPS,
1/3rd ROIC and 1/3rd relative TSR vs. a bespoke group of sector peers.
PSP awards granted to Executive Directors are subject to a three-year
performance period and an additional two-year holding period. Vested
awards may not be sold during the holding period except to cover tax
liabilities.
Malus and clawback provisions apply to the ABP and the PSP both prior
to vesting and for a period of two years post-vesting. This enables the
Company to withhold payment/vesting of any sums and/or recover
sums paid on the occurrence of specific trigger events, including but
not limited to misconduct, a material misstatement of the Company’s
audited results, a material failure of risk management, a material breach
of health and safety regulations, or serious reputational damage.
1. For further details on the joining arrangements for Catherine Gubbins, please see pages 101 to 103.
Remuneration opportunities in different performance scenarios
The charts below illustrate the potential future value and composition of the Executive Directors’ remuneration opportunities in four
performance scenarios: minimum, on-target (i.e. in line with the Company’s expectations), maximum, and maximum plus 50% share price
appreciation, a scenario where 50% share price appreciation is included in the valuation of the PSP.
The potential remuneration opportunities are based on the 2023 Remuneration Policy, applied to the Executive Directors’ base salaries as at
1 October 2023 (or on appointment, if later).
Dalton Philips, CEO (€’000)
Catherine Gubbins1, CFO (€’000)
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
€836
100%
€3,825
50%
€3,191
40%
34%
28%
€1,697
19%
32%
49%
26%
22%
3,000
2,500
2,000
1,500
1,000
500
0
€1,550
39%
31%
30%
€1,850
49%
26%
25%
€860
17%
28%
55%
€470
100%
Minimum On-target Maximum Maximum+50%
Minimum On-target Maximum Maximum+50%
Fixed remuneration
Annual bonus
Long-term incentive
The charts above exclude the effect of any Company share price appreciation except in the ‘maximum +50%’ scenario.
Strategic Report | Directors’ Report | Financial Statements | Other Information 92
Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Remuneration at a glance continued
Assumptions
Performance scenario
Minimum
On-target
Maximum
Maximum+50%
Includes
Salary, pension and benefits (‘fixed remuneration’)
No bonus payout
No vesting under the PSP
Fixed remuneration
50% of maximum annual bonus payout (i.e. 75% and 60% of salary for
the CEO and CFO respectively)
25% of maximum vesting under the PSP (i.e. 43.75% and 37.50% of
salary for the CEO and CFO respectively)
Fixed remuneration
100% of maximum annual bonus payout (i.e. 150% and 120% of salary
for the CEO and CFO respectively)
100% of maximum vesting under the PSP (i.e. 175% and 150% of salary
for the CEO and CFO respectively)
Fixed remuneration
100% of maximum annual bonus payout
100% of maximum vesting under the PSP, plus 50% share price
appreciation
1. Catherine Gubbins will join the Board in early 2024. Her actual pay received for FY24 will be pro-rated to reflect the period from appointment. However, full year
equivalent data has been shown in the chart above to aid comparison. Further details on her joining arrangements, including the buy-out award made to cover bonus
forfeited on leaving her previous employer (which is not included in the scenario chart above), are set out on page 103.
Executive Director service contracts and policy on payments to Executive Directors leaving the Group
Dalton Philips’ service contract extends for an indefinite term, though is terminable by either the Company or Dalton upon 12 and six months’
notice, respectively. The service contract of Catherine Gubbins (incoming CFO) also extends for an indefinite term and may be terminated by
either the Company or Catherine upon a notice period of six months in either case. The service contract between the Company and Emma
Hynes (former CFO) required 11 months and three months’ notice respectively. The service contracts make provision, at the Board’s discretion,
for early termination involving payment of salary and other emoluments in lieu of notice. Effective dates of current Executive Director service
contracts/commencement of role are as follows:
Executive Director
Dalton Philips
Catherine Gubbins
Date of contract/commencement of current role
13 May 2022/26 September 2022
5 September 2023/early 2024
Full details on the Company’s policy on payment for Executive Directors leaving the Group is set out on pages 92 and 93 of the FY22 Annual
Report and Financial Statements and details of the leaving arrangements for Emma Hynes are set out on page 101 of this Report.
Non-Executive Director letters of appointment
The Non-Executive Directors have letters of appointment, the terms of which recognise that their appointments are subject to the Company’s
Articles of Association and their services are at the direction of the shareholders. All Non-Executive Directors submit themselves for election
at the AGM following their appointment and, in line with the Company’s Articles of Association and the Code, each Director retires at each
subsequent AGM and offers him or herself for re-election as appropriate.
Non-Executive Directors are not entitled to any payment in lieu of notice. The letters of appointment are available for shareholders to view at
the Company’s registered office during normal office hours.
The table below shows the appointment and expiry dates for the Non-Executive Directors:
Name
John Amaechi
Sly Bailey
Linda Hickey
Alastair Murray
Anne O’Leary
Helen Rose
Hetal Shah
Leslie Van de Walle
Effective date of appointment
Expiry of appointment1,2
1 February 2021
17 May 2013
1 February 2021
1 February 2023
1 February 2021
11 April 2018
1 April 2023
1 December 2022
25 January 2024
25 January 2024
25 January 2024
25 January 2024
25 January 2024
25 January 2024
25 January 2024
25 January 2024
1.
In line with the Company’s Articles of Association and the Code, each year at the AGM of the Company each Director retires, and where appropriate offers him or herself
for re-election.
2. Should the date of the AGM change, the expiry date of the appointment will change accordingly.
93
Consideration of wider employee views
The Committee considers pay and employment conditions elsewhere in the Group when determining pay for Executive Directors. The Chief
People Officer makes regular presentations to the Committee on the remuneration structures for both weekly paid and salaried colleagues,
the salary review process for the wider colleague base as well as benefit and pension arrangements.
In considering base salary increases for Executive Directors, the Committee is mindful of the pay arrangements of the wider workforce and
takes into account the Group-wide annual salary review process.
The Board recognises the value of listening to colleagues’ views and perspectives on a range of business matters, and has established multiple
channels to ensure effective two-way engagement with our wider colleague base. This engagement involves our Workforce Engagement
Director, who is also a member of the Committee and who has been designated responsibility for engaging with colleagues and bringing their
voice into the boardroom. During FY23, regular cross-functional colleague forums and listening groups have continued across the business.
The Workforce Engagement Director attended a cross-functional colleague forum, where open feedback from colleagues on all issues,
including remuneration was welcomed. Bi-weekly senior leadership calls also took place, allowing time for business updates and open Q&A
sessions where remuneration matters were raised. These engagements allow the opportunity for colleagues to ask questions in relation to
remuneration and are fundamental to ensure colleague sentiment is considered.
Consulting with shareholders
The Committee is dedicated to ensuring an open dialogue with shareholders on remuneration matters. The Committee engaged with
shareholders and proxy advisory firms when setting the framework for the 2023 Remuneration Policy and was pleased by the strong support
received at the 2023 AGM. Whilst no formal engagement activities took place in the current financial year by the Committee, the Committee
continues to respond to enquiries from shareholders as they arise and will consult with shareholders ahead of the next policy review or
sooner, if required.
Strategic Report | Directors’ Report | Financial Statements | Other Information 94 Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration
The following section sets out our Annual Report on Remuneration (‘Report’), outlining decisions made by the Committee in relation to
Directors’ remuneration in respect of FY23 and how the Committee intends to apply the 2023 Remuneration Policy (‘Policy’) for FY24.
As set out on page 88, the 2023 Remuneration Policy was approved by shareholders at the Annual General Meeting (‘AGM’) of the Company
held on 26 January 2023. The Annual Report on Remuneration will be subject to an advisory shareholder vote at the AGM to be held on
25 January 2024. Where information has been audited, this has been stated. All other information in this report is unaudited.
Role of the Committee
The Committee’s collective role includes ensuring that the Group’s remuneration arrangements are aligned with the Group’s strategic
priorities. The Terms of Reference of the Committee include the determination of the remuneration packages for Executive Directors, the
Group General Counsel and Company Secretary and other members of the senior management team, as well as fees for the Board Chair. The
Board Chair and the Executive Directors determine the fees for the Non-Executive Directors.
The Terms of Reference for the Committee are reviewed annually, are updated as appropriate and are available under the Governance section
of the Group’s website, www.greencore.com.
Committee membership
The Committee is currently comprised of four Non-Executive Directors, all of whom are considered by the Board to be independent:
Committee member
Date appointed
Linda Hickey
John Amaechi
Sly Bailey
Paul Drechsler
Anne O’Leary
1 February 2021 (Appointed to the Committee and as Committee Chair on 1 February 2021)
1 February 2023
1 February 2023
14 May 2020 (Stepped down from the Committee on 26 January 2023)
21 June 2022
Attendance at scheduled
Committee meetings
during FY23
3/3
2/2
2/2
1/1
3/3
Paul Drechsler stepped down from the Board and the Committee on 26 January 2023, with John Amaechi and Sly Bailey joining the
Committee on 1 February 2023. I would like to take this opportunity to thank Paul for his valuable contribution to the Committee during his
tenure.
The Committee, as a whole, have strong experience on remuneration related matters, gained both from their executive careers and/or
from their experience on remuneration and compensation committees of other companies. Further details on the Committee members’
qualifications and experience are set out on pages 62 and 63. The Group General Counsel and Company Secretary or their nominee acts as
Secretary to the Committee. During the year, the Chief Executive Officer (‘CEO’), Chief Financial Officer (‘CFO’) and the Chief People Officer
attended meetings on an ad hoc basis at the invitation of the Committee and provided information and support as requested. However,
no individual was present when their own remuneration was being discussed. During FY23, the Committee held three scheduled and two
additional unscheduled meetings.
Committee effectiveness
As noted on page 77, a Committee review was undertaken during the year by way of one-to-one conversations between the Committee
Chair and each of the members, supported by an analysis of how the Committee was performing against key areas of its Terms of Reference.
The review confirmed that the Committee continues to operate effectively and efficiently and has the skills and expertise required in order to
perform its role appropriately. The Committee continues to be mindful of the importance of setting stretching targets, which was highlighted
as a key area of focus for the Committee in FY23.
Advisors
The Committee’s appointed independent advisors during the year were Ellason LLP (‘Ellason’). Ellason attends Committee meetings on an ad
hoc basis and provides advice on remuneration for Executive Directors, benchmarking analysis, and updates on market developments and
best practice. Ellason is a member of the Remuneration Consultants Group and adheres to its code of conduct. The Committee reviews the
performance of its advisors annually and is satisfied that Ellason provided independent and objective remuneration advice to the Committee,
noting that Ellason does not have any personal connections to Greencore or any individual Director. Services were provided on a time and
materials basis. The fees paid to Ellason in respect of work carried out for the Committee in the year under review amounted to £51,154.
Ellason did not provide any other services to the Company during the year.
Key activities during the year
During FY23, the Committee held three scheduled meetings, as well as two additional ad hoc meetings. All Committee members attended all
scheduled meetings for which they were eligible to attend. Details of attendance at scheduled meetings can be found in the table above. The
key activities and matters discussed at Committee meetings during FY23 included:
•
• approval of opportunities/award levels and performance targets for the FY23 Annual Bonus Plan (‘ABP’) and Performance Share Plan (‘PSP’)
reviewing the external remuneration landscape generally and considering best practice corporate governance;
awards;
95
reviewing and approving performance and outturns under the FY22 ABP and Tranche 2 of the FY21 PSP (which lapsed in full during FY23);
reviewing and approving the FY22 Report on Directors’ Remuneration and the proposed 2023 Remuneration Policy;
•
•
• approving the remuneration arrangements for the outgoing CFO; recommending to the Board the fee arrangements for the Interim CFO
role; and approving the remuneration arrangements for the incoming CFO;
reviewing workforce remuneration structures, pensions and the salary review process;
reviewing the Irish and UK ShareSave Schemes’ activities;
incorporating ESG objectives appropriately in the remuneration framework; and
reviewing the Committee’s Terms of Reference and the Committee’s effectiveness.
•
•
•
•
Shareholder voting
The table below shows the voting outcome of the resolutions proposed at the 2023 AGM in relation to the FY22 Annual Report on
Remuneration and the 2023 Remuneration Policy.
Resolution
FY22 Annual Report on Remuneration
2023 Remuneration Policy
For
Against
Total votes cast
Votes withheld
96.43%
3.57%
308,078,767
96.55%
3.45%
308,087,335
69,970
61,402
Single figure of total remuneration for Executive Directors (audited)
The following table sets out the single figure of total remuneration for Executive Directors for FY23 and FY22.
Salary
(‘000)
Pension
(‘000)
Benefits2
(‘000)
Dalton Philips
Emma Hynes1
FY23 € 700
€ 13
FY22
FY23 € 327
€ 476
FY22
€ 56
€ 1
€ 26
€ 38
€ 54
€ 1
€ 26
€ 38
Total
fixed
(‘000)
€ 810
€ 15
€ 379
€ 552
Annual
bonus
– cash3
(‘000)
€ 431
–
€ 388
€ 165
Annual
bonus –
deferred
share
award3
(‘000)
€ 431
–
€ 0
€ 165
PSP4
(‘000)
Total
variable
(‘000)
Total
remuneration
(‘000)
Total fixed
vs. Total
remuneration
Total variable
vs. Total
remuneration
–
–
€ 0
€ 0
€ 862
–
€ 388
€ 330
€ 1,672
€ 15
€ 767
€ 882
48%
100%
49%
63%
52%
0%
51%
37%
1. Emma Hynes stepped down from her role as Executive Director and CFO on 31 May 2023. Her FY23 remuneration relates to the period 1 October 2022 to 31 May 2023.
2. Benefits include car allowance as well as medical insurance.
3. Dalton Philips was awarded an annual bonus of 82% of the maximum opportunity for FY23, of which 50% is to be deferred in shares for three years. Emma Hynes was
awarded an annual bonus of 79% of the maximum opportunity for FY23, all of which is to be paid in cash. Further detail is set out on page 99.
4. The performance period for the Year 3 tranche of the FY21 PSP ends on 8 January 2024. As at the date of this Report, the minimum performance hurdle for the Year 3
tranche is not expected to be achieved, therefore an estimated vesting figure of 0% has been included. Dalton Philips did not participate in the FY21 PSP grant.
Strategic Report | Directors’ Report | Financial Statements | Other Information 96
Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
Single figure of total remuneration for Non-Executive Directors (audited)
The following table sets out the single figure of total remuneration for Non-Executive Directors in FY23 and FY22.
John Amaechi
Sly Bailey (Senior Independent Director)
Paul Drechsler2
Linda Hickey (Chair of the Remuneration Committee)
Gary Kennedy (former Board Chair)3
Alastair Murray (Chair of the Audit and Risk Committee)4
Anne O’Leary
Helen Rose (Chair of the Sustainability Committee)5
Harshitkumar (Hetal) Shah6
Leslie Van de Walle (Board Chair and Chair of the Nomination and Governance
Committee)7
Helen Weir (Chair of the Audit and Risk Committee)8
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY23
FY22
FY23
FY22
FY23
FY23
FY23
FY22
Base fee
Additional fees1
Total fees
€78,000
€78,000
€78,000
€78,000
€25,113
€78,000
€78,000
€78,000
€26,000
€40,195
€52,000
€78,000
€78,000
€78,000
€78,000
€39,000
€65,000
–
–
€16,500
€16,500
–
–
€12,000
€12,000
€78,640
€253,892
€11,000
–
–
€6,666
–
–
€78,000
€78,000
€94,500
€94,500
€25,113
€78,000
€90,000
€90,000
€104,640
€294,087
€63,000
€78,000
€78,000
€84,666
€78,000
€39,000
€143,333
€208,333
€19,500
€78,000
€4,125
€16,500
€23,625
€94,500
1. As set out in the 2023 Remuneration Policy if a Non-Executive Director holds two additional roles, the additional fee is capped at the higher additional fee. Therefore, in
FY23 the additional fee payable to Leslie Van de Walle, Board Chair, was capped at his Board Chair fee. In FY22, Sly Bailey’s additional fee was capped at her fee for acting
as Senior Independent Director.
2. Paul Drechsler stepped down from the Board and as Non-Executive Director on 26 January 2023. Paul’s FY23 fees relate to the period 1 October 2022 to 26 January
2023.
3. Gary Kennedy stepped down from his role as Board Chair and Non-Executive Director on 26 January 2023. The FY22 figures report only the fees paid to Gary Kennedy
in his capacity as Non-Executive Chair from 25 September 2021 to 30 March 2022 and from 26 September 2022 to 30 September 2022. The remuneration he received in
relation to his temporary Executive Chair role from 31 March 2022 to 25 September 2022 is set out on page 98 of the FY22 Annual Report and Financial Statements.
4. Alastair Murray was appointed to the Board as Non-Executive Director and Chair of the Audit and Risk Committee on 1 February 2023. Alastair’s FY23 fees relate to the
period 1 February 2023 to 29 September 2023.
5. Helen Rose was appointed Chair of the Sustainability Committee on 1 February 2023. Helen’s FY23 additional fee relates to the period 1 February 2023 to 29 September
2023.
6. Hetal Shah was appointed to the Board and as Non-Executive Director on 1 April 2023. Hetal’s FY23 fees relate to the period 1 April 2023 to 29 September 2023.
7. Leslie Van de Walle was appointed to the Board as Non-Executive Director and Chair Designate on 1 December 2022, as Board Chair on 26 January 2023 and Chair of the
Nomination and Governance Committee on 1 February 2023.
8. Helen Weir stepped down from the Board as Non-Executive Director and Chair of the Audit and Risk Committee on 31 December 2022.
Notes to the single figure table (audited)
Base salary
The FY23 salaries were €700,000 for Dalton Philips (set on appointment on 26 September 2022) and €490,280 for Emma Hynes (which was
pro-rated for the period served from 1 October 2022 to 31 May 2023).
Pension
Dalton Philips and Emma Hynes received a pension contribution equivalent to 8% of salary, which remains in line with the contribution to the
wider colleague base. Emma Hynes’ pension contribution was prorated for the period served.
FY23 Annual Bonus Plan (‘ABP’)
The maximum bonus opportunity for Dalton Philips and Emma Hynes in FY23 was 150% of salary. The annual bonus is based on the
achievement of stretching short-term financial targets (75% of maximum bonus opportunity) as well as personal and strategic objectives
(25% of maximum bonus opportunity). The mix of measures reflects the Committee’s aim of providing an appropriate balance between
incentivising the achievement of key financial targets and specific personal and strategic objectives.
Performance targets and outturns are set out in the tables overleaf. Both Adjusted Operating Profit and Free Cash Flow are Group KPIs referred
to as an Alternative Performance Measure (‘APM’). APMs are non-IFRS measures and are used to monitor the performance of the Group’s
operations and of the Group as a whole. Definitions and reconciliations to IFRS measures are provided in the APMs section on pages 177 to
181.
97
Group financial objectives FY23 (75% weighting)
Measure
Adjusted Operating Profit (50%)
Free Cash Flow (25%)
Performance targets1
Threshold
(0% payout)
Target
(50% payout)
Maximum
(100% payout)
Actual outturn/
achievement
% payout of
bonus
£70.2m
£35.2m
£74.1m
£39.3m
£81.9m
£43.5m
£76.3m
£56.8m
32%
25%
1. There is a straight-line scale between threshold and target, and between target and maximum.
The financial targets were set at the start of the financial year, taking into account budget and broker forecasts and the likely headwinds posed
by the volatile inflation environment, and the impact of cost-of-living factors and continued industrial action on consumer demand. The
targets were considered to be stretching in the context of the difficult and volatile market backdrop.
In keeping with the Committee’s usual practice, the formulaic outcome for the financial element of the FY23 ABP was reviewed in the context
of the stakeholder experience and wider performance context for the Group over the course of the year.
As a result, and to ensure that the bonus continues to drive and reward the right behaviours as well as performance, the Committee decided
not to make any adjustments to the formulaic outcome of the financial element for the FY23 ABP.
CEO FY23 personal and strategic objectives (25% weighting)
The CEO’s personal and strategic objectives for FY23 comprised three categories aligned to short-term priorities and non-financial KPIs for
the Group, and reflected this being the CEO’s first year in role. The table below describes the objectives set and the Committee’s assessment
of these:
Objective(s) set
No Partly Fully
Commentary
Met?
First year in role – CEO transition (10.0%)
Create a winning, cohesive and aligned Group
Executive Team who champion (and model)
Greencore values.
Lead the reset of, and develop, Group strategy.
Significant work has been undertaken in the year to reshape the
Group Executive Team to drive the Group forward and deliver
improved performance (including delivery against budget in
FY23). Dalton has introduced strong stewardship and ensured
commitments were delivered by the team. A robust platform
is now established from which to set the ‘tone from the top’,
as well as shared objectives and key milestones linked to
succession planning.
The quality of the team restructure is evidenced by material
improvements in all questions relating to senior leaders in our
Pulse Engagement Survey for colleagues.
In response to direct feedback from key stakeholders to focus
initially on short-term operational delivery, the CEO reviewed
and clearly prioritised, within three months of joining, key near-,
medium-, and long-term strategy interventions (Horizons 1,
2 and 3). Driving a collective focus on Horizon 1 interventions
has underpinned delivery of the Group’s positive financial
performance in FY23.
The CEO also led a strategic review and developed a plan,
approved by the Board in April, to deliver ROIC > Weighted
Average Cost of Capital (‘WACC’) across the business and
underpin the Group’s aspiration to rebuild profitability in the
medium-term.
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Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
Objective(s) set
No Partly Fully
Commentary
Met?
Build strong and effective relationships and
engagement with key stakeholders (shareholders,
customers, suppliers, consumers, colleagues and
communities).
Inclusion and diversity (7.5%)
Set, sponsor, launch and communicate Group
targets.
Sustainability (7.5%)
Actively sponsors the Better Future Plan across
the business with particular focus on our
prioritised areas.
Total achievement 25% out of 25%
The Board has been very pleased with the CEO’s investment in
key stakeholder relationships during this first year in the role. Key
deliverables included a schedule of regular meetings with key
customers and the Board, and being highly visible to Greencore
colleagues at all levels.
In assessing the CEO’s performance under this element, the
Committee took into account direct feedback from the Board
Chair and feedback from our Pulse Engagement Survey as
well as leadership and colleague forums sessions held during
the year. Colleagues were particularly positive about improved
performance reporting.
The CEO led a full review of the Group’s inclusion and diversity
programme during the year. Internal 2028 ambitions were
agreed and launched across gender, ethnicity and age, based on
which a phased annual milestone plan is now being finalised.
In addition to this primary objective, other key achievements
included:
• a 6% increase in the number of colleagues that would
•
recommend Greencore as a place to work based on results
of our Pulse Engagement Survey;
roll-out of training in bias and ethical recruitment with
participation exceeding the target level set;
launch of our first Group Menopause Policy; and
•
• provision of free feminine hygiene products to colleagues
across the business, in response to colleague feedback.
Recognising the importance of sustainability to the Group’s
strategy, Dalton instilled a renewed passion in this area across
the Group. Dalton led a full reset of the Group’s sustainability
roadmap in FY23, to establish a platform from which to drive
future improvement in key metrics in four key priority areas.
Key achievements included:
• a complete review of the Group’s Sustainability Strategy, to
•
reassess its relevance and viability;
targets for key focus areas validated internally and approved
by the Sustainability Committee;
•
roadmaps established for delivery against four priority areas;
• establishing clarity of ownership and accountability for key
•
project milestones; and
introducing a programme of upskilling sessions and quarterly
progress updates sponsored by the Group Executive Team,
to sharpen focus on this key pillar for Group success going
forward.
99
CFO FY23 personal and strategic objectives (25% weighting)
Objective(s) set
No Partly Fully
Commentary
Met?
Organisational and transition (7.5%)
Support the leadership transition and help create
a winning, cohesive and aligned Group Executive
Team modelling Greencore values. Following
announcement of departure from Greencore,
provide continuity in execution and transitional
support until stepping down from the Board.
Strategic and financial (7.5%)
Focus on deleverage, balance sheet
strengthening and inflation recovery as well as a
focus on profitability rebuild to support Group’s
strategy and future growth aspirations.
Sustainability and risk (10%)
Embed improved risk management processes
and co-sponsoring the Better Future Plan in our
prioritised areas.
Emma provided significant support to the incoming CEO to
support transition and help reshape the Group Executive Team
during FY23 to drive the Group forward and deliver improved
performance. Emma supported continuity and contributed
effectively to Group Executive Team and Group Finance team
leadership to ensure ongoing delivery of team objectives
and effective transition, including for the period after the
announcement of her departure from Greencore until she
stepped down from the Board.
Emma reviewed and prioritised key near, medium and long
term strategy interventions (Horizons 1, 2 and 3) with particular
focus on Horizon 1 to help achieve the Group’s positive financial
performance in FY23. These included:
• delivered a number of the objectives set, continued to drive
strong focus to underpin good outcomes on balance sheet
strength and inflation recovery; and
• supported the CEO, on rebuilding returns across the business
to support the Group’s aspiration to rebuild profitability in the
medium term.
Supported the full reset of the Group’s Sustainability Strategy in
FY23, in particular:
• continued progress made during the year in driving forward
our agenda though objectives not met in full as work
continues to improve ESG data methodology and collection;
• continued progress made embedding the risk agenda,
supporting the refreshment of the Risk Oversight Committee
and development of the new risk management framework;
• ensure ESG data methodology and collection process is
•
robust, including the deployment of an Internal Audit review,
to support the Group’s Sustainability Strategy; and
further embed risk management as part of emerging
organisation design, increasing the profile of, and
accountability for, risk management within functional teams.
Total achievement 22% out of 25%
Outcomes and discretion
As described above, the Committee carefully assessed the performance of the Executive Directors during their respective tenures in FY23
against the personal and strategic measures set, in line with normal practice. As a result of the performance and valued contribution of each
of the CEO and former CFO, and the extent to which they delivered against these objectives, the Committee determined that this element
should payout at 100% and 88% (i.e. 25% and 22% of the maximum bonus opportunity) for the CEO and former CFO, respectively.
Overall, the formulaic assessment of targets warranted a bonus payout of 82% and 79% of maximum for the CEO and former CFO,
respectively.
The Committee then reviewed this outcome in the context of the Group’s underlying performance and the stakeholder experience more
generally. In determining that the formulaic outcome was appropriate (and that no exercise of discretion was necessary to adjust the ABP
payout for these broader considerations), the Committee took into account Greencore’s operational and commercial performance against key
elements of its strategy during the year, whilst remaining mindful of colleagues’ experience (further details on which are set out on page 18 to
21). The Committee concluded that the formulaic outcome appropriately reflected that good performance outcomes had been delivered and
the right behaviours demonstrated in doing so; aligning with our corporate values, and our remuneration principles of ‘pay-for-performance’
and ‘alignment and fairness’.
Strategic Report | Directors’ Report | Financial Statements | Other Information 100 Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
Long term incentives
FY21 PSP awards
Emma Hynes received awards under the FY21 PSP as set out in the table below. As Dalton Philips joined the Board at the end of FY22, he did
not participate in the FY21 PSP grant.
Executive Director
Date of grant
Number of
awards granted
Share price on
date of grant1
Face value
on grant
Awards as %
of annualised
salary2
Vesting date3 Holding period expiry
Emma Hynes
8 January 2021
523,620
£1.122
£588k
c.137%
See footnote
8 January 2026
1. Average share price for the three days commencing on 5 January 2021.
2. Calculated based on full eligible FY21 salary and the face value on grant, which has then been converted into euro using the exchange rate for the date of grant of
£1:€1.11.
3. 15% of the awards were due to vest on 8 January 2022 (Tranche 1), 25% on 8 January 2023 (Tranche 2) and 60% on 8 January 2024 (Tranche 3). Awards may be sold only
to cover tax liabilities. Any shares vesting (net of tax) must be held until the fifth anniversary of grant. Tranche 1 and Tranche 2 have lapsed.
Vesting of Tranche 3 requires the average Return Index (‘RI’) for the month preceding the third anniversary of grant to meet or exceed
291 pence per share. RI is calculated taking into account share price growth and dividends (assumed to be reinvested on the ex-dividend date)
over the relevant performance period.
Vesting of the awards is also subject to two underpins being met. The number of shares vesting will be reduced by 50% if the Group’s relative
TSR performance is below the median of its TSR comparator group over the relevant performance period. In addition, a discretionary
assessment of Greencore’s underlying performance will be undertaken by the Committee. Details of the TSR comparator group and
factors that may be considered when assessing the performance underpin are set out on page 100 of the FY21 Annual Report and Financial
Statements. Any shares that vest will be required to be held until the fifth anniversary of grant, ensuring alignment with long-term shareholders
and the delivery of sustainable long-term returns. Tranche 3 is expected to lapse in January 2024.
FY23 PSP awards
Dalton Philips and Emma Hynes received awards under the FY23 PSP as set out in the table below.
Executive Director
Date of grant
Number of
awards granted1
Share price on
date of grant2
Face value
on grant
Awards as %
of salary
Vesting date Holding period expiry
Dalton Philips
Emma Hynes
8 December 2022
8 December 2022
1,548,767
929,791
£0.6818
£0.6818
£1,056k
£633k
175% 8 December 2025 8 December 2027
150% 8 December 2025 8 December 2027
1. Calculated based on FY23 salary and the award level as a % of salary, which has then been converted into a number of shares using an average share price and exchange
rate for the three days commencing 29 November 2022.
2. Average share price for the three days commencing 29 November 2022.
The performance measures are Adjusted EPS, ROIC and relative TSR. Performance will be assessed over the period FY23 to FY25. Full details
of the performance targets are summarised below:
Measure
Cumulative Adjusted EPS (FY23 + FY24 + FY25)
FY25 ROIC
Relative TSR vs. bespoke group of sector peers1
Weighting
(% of award)
1/3rd
1/3rd
1/3rd
Below threshold
(0% vesting)
Threshold
(25% vesting)
Maximum
(100% vesting)
Below 29.2p
Below 9.5%
Below median
29.2p
9.5%
Median
32.2p
10.5%
Upper quartile
1. A.G.Barr; Bakkavor; Britvic; Carr’s; Cranswick; Devro; Glanbia; Greggs; Hilton Food; Kerry Group; Premier Foods; and SSP Group.
As in previous years, the Committee will consider the underlying financial performance of the business as well as the value added to
shareholders in adjudicating the final PSP vesting level.
As noted on page 104 of Greencore’s FY22 Annual Report and Financial Statements, in setting the adjusted EPS and ROIC ranges, the
Committee remained mindful about setting targets to be stretching (to reinforce alignment with stakeholder interests and incentivise
outperformance) as well as relevant and motivational in the context of the prevailing external market environment. As in previous years, the
Committee will review vesting levels at the conclusion of the performance period to ensure they reflect the underlying performance of the
business, the value added to shareholders and to avoid any undue windfall gains for participants. The award will vest three years from the date
of grant, subject to meeting the performance conditions and continued employment, and a two-year holding period will apply post vesting.
Malus and clawback provisions will apply both prior to vesting and for a period of two years post-vesting, and vested awards may not be sold
during the two-year holding period post-vesting except to cover tax liabilities.
101
Deferred Bonus Plan (‘DBP’) awards granted in FY23
The following deferred bonus shares were awarded to Emma Hynes during FY23. The award relates to the bonus awarded for performance
during FY22.
Executive Director
Date of grant
Emma Hynes
8 December 2022
Number of
awards granted1
208,754
Share price on
date of grant2
£0.6818
Face value
on grant
Vesting date
£142k
8 December 2025
1. Calculated based on the euro value of 50% of the bonus earned for FY22, which has then been converted into a number of shares using an average share price and
exchange rate for the three days commencing 29 November 2022.
2. Average share price for the three days commencing 29 November 2022.
Payments for loss of office
Emma Hynes stepped down as Executive Director and CFO on 31 May 2023, and will leave the Group on 17 March 2024. Prior to her
departure, Emma will continue to receive salary, benefits and pension payments for the duration of her contractual notice period in line with
the 2023 Remuneration Policy. No other payments have been, or will be, made in connection with Emma’s cessation of office.
As explained in the Chair’s opening letter, Emma was treated as a good leaver under the Company’s incentive plans and was considered
eligible for an annual bonus for FY23. The value of the bonus earned by Emma in relation to the period of FY23 for which she served as
Executive Director is disclosed in full in the single figure of total remuneration table on page 95. Emma will not be eligible to participate in the
FY24 ABP.
Emma’s outstanding PSP awards will be pro-rated to reflect her employment during the vesting period. Based on a review of performance,
no awards are expected to vest to her under the FY21 PSP (Tranche 3). The FY22 and FY23 PSP awards will be pro-rated for time served, and
these awards will continue to vest on the normal vesting date, subject to the performance targets being achieved. The two-year post-vesting
holding period will continue to apply to awards vesting. Emma’s outstanding DBP awards were released to Emma shortly after she stepped
down from the Board. These remain subject to the post-employment shareholding requirement, whereby their sale is prohibited for two years
(other than to cover the tax liability arising on vesting). Further details of her outstanding share awards on the date Emma ceased to be an
Executive Director are set out on page 104.
All payments that relate to Emma’s service as an Executive Director were in line with the Company’s remuneration policy, and otherwise
consistent with her service agreement and statutory employment rights, as well as the terms applying to her outstanding incentive awards.
In addition to the payments set out in the single figure table on page 95, the aggregate value of fixed pay and bonus payable to Emma for the
period from 1 June to 29 September 2023 (as described above) was €415,554.
Payment to past Directors
Other than the payments detailed above, no payments were made to past Directors during the year under review.
Implementation of the 2023 Remuneration Policy in FY24
Executive Director remuneration in FY24
A summary of how the 2023 Remuneration Policy will be implemented in FY24 is set out below.
Base salary
As set out on page 89, the Committee agreed that it would be appropriate to award a 3.5% salary increase to Dalton Philips. This increase
is effective from 1 October 2023 and will be lower than the average increase to be awarded across the wider workforce (which will be
determined in January 2024 and backdated to 1 October 2023).
The FY24 salaries are as follows:
Executive Director
Salary from 1 Oct 2023
Salary from 1 Oct 2022
Percentage increase
Dalton Philips
Catherine Gubbins
€724,500
€400,0001
€700,000
–
3.5%
–
1. Salary is effective from the formal date of appointment to the Board in early 2024.
Strategic Report | Directors’ Report | Financial Statements | Other Information 102 Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
Pension and benefits
Dalton Philips and Catherine Gubbins will receive a pension contribution of 8% of salary, which is in line with the pension contribution
currently available to the wider colleague base.
Annual Bonus Plan (‘ABP’)
The ABP will be based 75% on stretching financial performance targets and 25% on personal and strategic objectives.
The financial performance element will be split between Adjusted Operating Profit (weighted 50%) and Free Cash Flow (weighted 25%). The
targets for FY24 have been set based on full year performance and have been set with reference to budget as well as broker forecasts and
other external considerations. The targets for FY24 are considered commercially sensitive but will be disclosed in full on a retrospective basis
in next year’s Annual Report on Remuneration.
The remaining 25% of the bonus is based on personal and strategic objectives to help ensure a continued focus on the short and medium
term objectives that are most critical to the successful delivery of the strategy and long-term sustainable performance of the Group. For FY24,
this element will again include objectives specifically linked to sustainability and inclusion and diversity.
The outcomes of both the financial and non-financial KPIs will be considered by the Committee when determining the overall level of bonus
payable, and the Committee retains discretion to adjust the outcomes to take into account the wider stakeholder context.
The maximum opportunity for FY24 remains unchanged at 150% of salary for Dalton Philips. The maximum bonus opportunity for
Catherine Gubbins has been set at 120% of salary. The FY24 annual bonus for Catherine Gubbins will be pro-rated to reflect the period from
appointment. A minimum of half of any bonus will be deferred in shares, vesting after three years subject to continued employment. Both the
cash bonus and deferred share awards are subject to malus and clawback provisions.
Long term incentive
Dalton Philips will receive an award in FY24 at 175% of salary and Catherine Gubbins will receive an award in FY24 at 150% salary (to be granted
shortly after joining the Board).
The performance measures will continue to be Adjusted EPS, ROIC and relative TSR, as the Committee believes these to be the most
appropriate measures for the next three-year cycle of growth and returns in the business. Performance will be assessed over the period FY24
to FY26. As in previous years, the Committee will also consider the underlying financial performance of the business (as well as the value
added to shareholders) in adjudicating the final overall PSP vesting level.
Measure
Cumulative Adjusted EPS (FY24 + FY25 + FY26)
FY26 ROIC
Relative TSR vs. bespoke group of sector peers1
Weighting
(% of award)
1/3rd
1/3rd
1/3rd
Below threshold
(0% vesting)
Threshold
(25% vesting)
Maximum
(100% vesting)
Below 32.8p
Below 11.8%
Below median
32.8p
11.8%
Median
36.5p
13.7%
Upper quartile
1. Performance will be assessed over the period FY24 to FY26, relative to the following bespoke group of sector peers: A.G.Barr; Bakkavor; Britvic; C&C; Carr’s; Cranswick;
Glanbia; Greggs; Hilton Food; Kerry Group; Premier Foods; SSP Group and Tate & Lyle. C&C and Tate & Lyle have been added to the TSR comparator group for the FY24
cycle, to ensure that it remains robust (following acquisitions in recent years of Total Produce and Devro) and relevant.
The award will vest three years from the date of grant, subject to meeting the performance conditions and continued employment, and a
two year holding period will apply post vesting. Malus and clawback provisions will apply both prior to vesting and during the holding period.
Vested awards may not be sold during the two-year holding period post vesting except to cover tax liabilities.
Non-Executive Director fees in FY24
Non-Executive Director fees are determined by the Board Chair and the Executive Directors, with the exception of the fee for the Board
Chair, which is determined by the Committee. Basic fees shall not exceed the limit as set out in the Articles of Association and approved by
shareholders. The fees for the Board Chair were reviewed in 2022, during the recruitment process for the new Board Chair. The fees for Non-
Executive Directors were reviewed in November 2023, with no changes made. The full year equivalent fees are set out in the table below:
Basic fee
Board Chair
Non-Executive Director
Additional fees
Board Chair
Senior Independent Director
Audit and Risk Committee Chair
Remuneration Committee Chair
Nomination and Governance Committee Chair
Sustainability Committee Chair
FY24
FY23
€78,000
€78,000
€78,000
€78,000
€172,000
€16,500
€16,500
€12,000
€10,000
€10,000
€172,000
€16,500
€16,500
€12,000
€10,000
€10,000
103
Chief Financial Officer appointment
As noted elsewhere in this Report, Catherine Gubbins will join the Group as Executive Director and CFO in early 2024. She has been appointed
on a salary of €400,000, with a maximum bonus opportunity of 120% of salary and annual award face value under the PSP of 150% of salary.
She will receive a pension contribution of 8% of salary (in line with that provided to other colleagues) and benefits consistent with our standard
policy. In recognition of annual bonus forfeited on leaving her previous employers, she will also receive a one-off cash payment of €40,000
on joining the business.
Relative importance of spend on pay
The table below illustrates shareholder distributions (i.e. dividends and share buybacks) and total employee pay for FY23 and FY22, and the
year-on-year change.
Distribution to shareholders1
Total employee pay
FY23
(£’000)
26,200
398,600
FY22
(£’000)
Percentage
change
8,800
380,900
198%
5%
1. The Group did not pay dividends to shareholders in FY23. During FY23, the Company purchased a total of 33,382,718 ordinary shares (FY22: 9,728,677) under the
Buyback Programme, returning a total of approximately £26.2m in cash to shareholders (FY22: £8.8m).
Historical TSR performance and remuneration outcomes for the CEO
The graph below compares the Company’s TSR against the FTSE All-Share Index over a period of ten financial years up to 29 September 2023.
It reflects the change in a hypothetical £100 holding in shares. The FTSE All-Share has been used as the Company is a constituent of this
index.
£300
£200
£100
£0
Sep
13
Sep
14
Sep
15
Sep
16
Sep
17
Sep
18
Sep
19
Sep
20
Sep
21
Sep
22
Sep
23
Greencore
FTSE 250 Index
FTSE All-Share Index
The table below illustrates the CEO’s single figure of total remuneration over the same ten financial year period to 29 September 2023.
Chief Executive Officer1
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Single figure (€’000)
Annual bonus outcome
PSP vesting
€2,590
98%
n/a2
€5,038
73%
92.3%
€3,131
83%
79%
€1,670
22%
35%
€1,414
18%
0%
€2,453
35%
50%
€1,120
0%
0%
€1,166
0%
0%
FY22
€935
n/a
n/a
FY23
€1,672
82%
n/a
1. FY14–FY21 relates to Patrick Coveney. For FY22 this represents remuneration paid to Patrick Coveney (until he resigned from the Company), Gary Kennedy in respect of
his role as Executive Chair and Dalton Philips (from appointment to the Board). Patrick Coveney, Gary Kennedy and Dalton Philips were not eligible to participate in the
FY22 ABP and Patrick Coveney’s in-flight PSP awards lapsed on his resignation from the Company (Gary Kennedy and Dalton Philips did not participate in the FY20 PSP).
FY23 remuneration reflects that received by Dalton Philips.
2. No performance-based long term incentive awards were awarded prior to March 2013.
External appointments
We recognise the opportunities and benefits both to the Company and to the Executive Directors of their serving as Non-Executive Directors
of other companies. Executive Directors are generally permitted to take on one non-executive directorship with another publicly listed
company or other significant commitment subject to the approval of the Board. Any fees arising from these or other appointments will
generally be retained by the individual.
CEO pay ratio
The table on page 104 shows the ratio of CEO pay for FY23 comparing the single total figure of remuneration for Dalton Philips (converted
into GBP using the average exchange rate for FY23 of €1:£0.8702), to the full-time equivalent total reward of those colleagues whose pay is
ranked at the 25th, 50th and 75th percentiles in our UK workforce.
Strategic Report | Directors’ Report | Financial Statements | Other Information
104 Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
The colleagues used to calculate the pay ratios were identified using our 2023 gender pay gap data (Option B). The colleagues at the 25th,
50th and 75th percentiles were identified as at 5 April 2023 and their salary and total remuneration were calculated in respect of the 12 months
ended 29 September 2023. This method is deemed the most appropriate methodology for the Group as it makes use of our gender pay data
which provided a readily available and robust dataset. The Committee is satisfied that these colleagues are representative of the relevant
percentiles across the organisation, as they represent the large majority of our UK workforce receiving basic pay, overtime, holiday pay and
employers’ pension contributions. The resulting pay ratios are set out below:
Year
FY23
FY22
FY21
FY20
Method
25th percentile
50th percentile
75th percentile
B
B
B
B
63:1
35:1
49:1
49:1
48:1
31:1
44:1
46:1
43:1
27:1
35:1
40:1
The table below provides the individual remuneration information in relation to our colleagues ranked at the 25th, 50th and 75th percentiles:
Year
FY23
Salary
Total pay and benefits
25th percentile
50th percentile
75th percentile
£22,314
£23,250
£25,363
£30,403
£28,075
£33,851
The Committee considers colleague pay levels and the resulting pay ratios as one of many reference points when reviewing executive
remuneration, and is pleased to note the year-on-year increase in colleague pay levels at the 25th, 50th and 75th percentiles versus those
disclosed in the FY22 Annual Report on Remuneration. The increase in CEO ratio reflects the first full year of the new CEO in situ, following
a year of interim management as well as the positive outcome in the ABP as outlined on pages 96 to 99. The Committee expects the pay
ratio going forward to be driven by fluctuations year-on-year in the CEO single figure to reflect the outcomes of variable remuneration
components, the value of which is aligned to the sustainable, long-term success of the Company. However, the Committee will keep under
review the evolution of the pay ratio over future years in this context, to ensure it remains appropriate.
Outstanding share awards (audited)
Details of the Executive Directors’ existing share awards as at 29 September 2023 (or at the date of ceasing to be an Executive Director,
if earlier) in the Company’s share schemes are set out in the table below:
Number of
options/
awards at
start of year
Date of grant
Granted
during the
year
Vested/
exercised in
the year
Lapsed
during the
year
Number of
options/
awards at
year end/
date ceased
to be a
Director1,2
Market price
on date of
grant
Exercise
price
Earliest date
of exercise/
vesting
Expiry date/
holding
expiring
date
Dalton Philips
Performance Share Plan
FY23
08.12.2022
Emma Hynes
Deferred Bonus Plan
– 1,548,767
06.12.2021
08.12.2022
225,638
–
–
208,754
Performance Share Plan
FY20
FY21 Yr2 tranche
FY21 Yr3 tranche
FY22
FY23
22.05.2020
08.01.2021
08.01.2021
06.12.2021
08.12.2022
150,000
130,905
314,172
470,079
–
–
–
–
–
929,791
–
–
–
–
–
–
–
–
– 1,548,767
£0.68
– 08.12.25
08.12.27
–
–
225,638
208,754
150,000
130,905
–
–
–
–
–
314,172
470,079
929,791
£1.29
£0.68
£1.37
£1.12
£1.12
£1.29
£0.68
– 26.09.23
– 26.09.23
06.12.24
08.12.25
– 22.05.23
– 08.01.23
– 08.01.24
– 06.12.24
– 08.12.25
22.05.25
08.01.26
08.01.26
06.12.26
08.12.27
1. Emma Hynes was treated as a good leaver and her 2021 and 2022 DBP awards vested subsequent to her departure from the Board.
2. For the purposes of Section 305 of the Companies Act 2014, the aggregate gain on the exercise of awards during the year ended 29 September 2023 was £332,005
(FY22: £77,591).
Statement of directors’ shareholding and share interests (audited)
The Company has adopted Executive Director shareholding guidelines whereby all Executive Directors shall build a holding of shares in the
Company equal to 200% of base salary, typically over a five-year period commencing on the date of their appointment to the Board.
As referred to in the 2023 Policy, with effect from January 2020, Executive Directors are also subject to a post-employment shareholding
guideline. Executive Directors will normally be expected to maintain a holding of Greencore shares at a level equal to the lower of the in-post
shareholding guideline or the individual’s actual shareholding for a period of two years from the date the individual ceases to be a Director.
The specific application of this shareholding guideline will be at the Committee’s discretion.
105
There are currently no shareholding guidelines in place for Non-Executive Directors, however, all Non-Executive Directors are encouraged to
hold shares in the Company.
The table below shows the beneficial interests of Directors on 30 September 2022 and 29 September 2023 (including the beneficial interest of
their spouses, civil partners, children and stepchildren) in the Ordinary Shares of the Company, as well as unvested awards.
Held at 30 Sept
2022 (or date of
appointment
if later)
Held at 29 Sept
2023 (or date of
departure
if earlier)
Shareholding
requirement as %
of salary
Shareholding
as % of salary1
Shareholding
requirement met
Scheme
interests subject
to deferral/
holding period2
Scheme
interests subject
to performance
conditions3
Share options
unvested and
not subject to
performance
conditions
Ordinary Shares
–
140,357
Executive Directors
Dalton Philips4
Emma Hynes5
Non-Executive Directors
John Amaechi
Sly Bailey
Paul Drechsler6
Linda Hickey
Gary Kennedy 7
Alastair Murray8
Anne O’Leary
Helen Rose
Hetal Shah9
Helen Weir10
Leslie Van de Walle11
Group General Counsel and
Company Secretary
Damien Moynagh12
–
64,504
43,015
–
477,676
–
–
98,550
–
39,000
–
195,000
140,357
–
64,504
43,015
–
477,676
–
–
98,550
–
39,000
145,000
–
70,000
200%
200%
26%
65%
Building
n/a
Nil
434,392
1,548,767
1,714,042
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Nil
Nil
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1. Calculated based on FY23 salaries and the average share price between 1 July 2023 and 29 September 2023 of £0.8270 (for Emma Hynes, the average share price
2.
between 1 March 2023 and 31 May 2023 of £0.8125) which has then been converted into euro using the average exchange rate for FY23 of €1: £0.8702.
Includes deferred share awards which are included in the value of the shareholding (on a net of tax basis where these are unvested) and vested shares subject to a holding
period under the PSP where applicable.
Includes unvested PSP shares.
3.
4. Dalton Philips was appointed to the Board on 26 September 2022. Executive Directors have a period of five years from Board appointment to reach the shareholding
guideline.
5. Emma Hynes stepped down from the Board as Executive Director and CFO on 31 May 2023 and is subject to the post-employment shareholding guideline.
6. Paul Drechsler stepped down from the Board as Non-Executive Director with effect from 26 January 2023.
7. Gary Kennedy stepped down from the Board as Non-Executive Director with effect from 26 January 2023.
8. Alastair Murray was appointed to the Board as Non-Executive Director with effect from 1 February 2023.
9. Hetal Shah was appointed to the Board as Non-Executive Director with effect from 1 April 2023.
10. Helen Weir stepped down from the Board as Non-Executive Director with effect from 31 December 2022.
11. Leslie Van de Walle was appointed to the Board as Non-Executive Director with effect from 1 December 2022.
12. Damien Moynagh was appointed Group General Counsel and Company Secretary on 7 November 2022.
Between 29 September 2023 and the date of this Report there have been no changes in the Directors’ shareholdings.
None of the Directors had a material interest in any contract of significance, other than a service contract in the case of Executive Directors,
with the Company or any of its subsidiaries at any time during the period.
Share-based payments
The Group operates a ShareSave Scheme in both Ireland and in the UK, which encourages eligible employees to save in order to buy shares
in the Company. The ShareSave Schemes provide a means of saving and give colleagues the opportunity to become shareholders. Currently,
there are approximately 2,000 participants in the schemes. In January 2022, the Group awarded £250 worth of Greencore Group plc
shares to every colleague in the Company under a Share Incentive Plan (‘SIP’) (with the exception of Executive Directors). In January 2023,
a Restricted Share Plan (‘RSP’) was approved by shareholders at the AGM, in which certain senior colleagues are eligible to participate. The
Group’s Financial Statements recognise an Income Statement charge in accordance with IFRS 2 Share-based Payment in respect of options
issued under the ShareSave Scheme, and awards granted under the DBP, PSP, RSP and SIP. The related charge in respect of share-based
payments issued to Executive Directors totalled £0.6m (FY22: £Nil) for the DBP and PSP and further detail is outlined in Note 30 to the Group
Financial Statements. Further detail in respect of all other share schemes is detailed in Note 6 to the Group Financial Statements.
Strategic Report | Directors’ Report | Financial Statements | Other Information 106 Greencore Group plc Annual Report and Financial Statements 2023
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
Share awards and share options outstanding under the Company’s DBP, PSP, RSP and all employee plans at 29 September 2023 amounted to
33,159,582 Ordinary Shares (FY22: 22,907,111), made up as follows:
Deferred Bonus Plan
Performance Share Plan
ShareSave Scheme: UK
Ireland
Share Incentive Plan
Restricted Share Plan
Number of
Ordinary Shares
594,032
10,752,522
17,288,527
62,016
1,838,712
2,623,773
Price range
–
–
£0.63-£1.14
€1.19
–
–
Normal vesting/
exercise dates
2023-2026
2023-2026
2023-2026
2023-2024
2025-2027
2024-2025
Funding of equity awards
Executive incentive arrangements are funded by a mix of newly issued shares and shares purchased in the market. Where shares are newly
issued, the Company complies with the Investment Association guidelines in relation to issuing a maximum of 5% of share capital in respect of
discretionary schemes and a maximum of 10% in respect of all share schemes in a rolling ten-year period. At 29 September 2023, there were
7,025,137 shares in the Company’s share ownership trust (as at 30 September 2022: 2,877,009). Current shareholder dilution is c.1.45%.
Strategic Report | Directors’ Report | Financial Statements | Other Information
107
Report of the Sustainability Committee
REPORT OF THE
SUSTAINABILITY
COMMITTEE
“As the Committee is in its infancy, the
Committee focused on setting priorities,
designing roadmaps and delivery plans,
reporting and quality of data.”
Dear Shareholder,
As Chair of the Sustainability Committee (the
‘Committee’), it is my pleasure to present
the Committee’s inaugural report for the
financial year ended 29 September 2023.
The Committee was established during
the year and is responsible for reviewing
the Group’s sustainability objectives and
performance, including the delivery of the
Group’s Sustainability Strategy, as well as
providing progress updates on sustainability
matters to the Board. This report outlines
how the Committee discharged the
responsibilities delegated to it by the Board
over the course of the period and the key
matters it considered in doing so.
Role of the Committee
The Committee’s role, authority, duties and
scope are set out in its Terms of Reference
which are available on the Governance
section of our website, www.greencore.com.
The Committee will review the Terms of
Reference annually and any amendments are
to be presented to the Board for approval.
Membership of the Committee
The Committee is currently comprised
of four Non-Executive Directors, all of
whom are considered by the Board to be
independent. As a whole, the Committee
possesses the skills, competence and relevant
experience across a variety of industries,
including the consumer goods and food
sectors, to enable it to effectively discharge
its responsibilities. I previously served as the
Sustainability Engagement Director prior to
the commencement of the Committee.
Membership of the Committee
Committee members
Date appointed
Helen Rose1
1 February 2023
John Amaechi2
1 February 2023
Sly Bailey
1 February 2023
Alastair Murray
1 February 2023
Attendance at
scheduled Committee
meetings during FY23
1/1
0/1
1/1
1/1
1. Helen Rose was appointed Committee Chair on 1 February 2023.
2. John Amaechi was unable to attend a meeting due to illness. Having read the papers, he communicated his
views on the business of the meeting to the Chair.
For more information, see our Sustainability section
on page 22
Read more in our 2023 Sustainability Report available
on www.greencore.com
Committee activities FY23
The Committee was formally established
by the Board in January 2023 and held one
meeting during the period. As the Committee
is in its infancy, the Committee focused on
setting priorities, designing roadmaps and
delivery plans, reporting and quality of data.
Committee priorities for FY24
The Committee is focused on transparency
and will continue to monitor the Group’s
performance of sustainability targets and
developing and monitoring priority transition
plans. Recognising that sustainability is a fast
moving space, we will continue to monitor any
new requirements and standards. We will also
continue to develop our understanding of how
climate could materially impact the business
and will undertake upskilling in this area.
Helen Rose
On behalf of the Sustainability Committee
27 November 2023
Strategic Report | Directors’ Report | Financial Statements | Other Information 108 Greencore Group plc Annual Report and Financial Statements 2023
Other statutory disclosures
Principal activities, results and review of business
Greencore is a leading manufacturer of convenience foods in the UK and our purpose is to make every day taste better. We supply all of the
major supermarkets in the UK. We also supply convenience and travel retail outlets, discounters, coffee shops, foodservice and other retailers.
We have strong market positions in a range of categories including sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled
soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings.
In FY23 we manufactured 779m sandwiches and other food to go products, 132m chilled ready meals, 245m jars of cooking sauces, pickles
and condiments, and 45m chilled soups and sauces. We carry out more than 10,400 direct to store deliveries each day. We have 16 world
class manufacturing sites in the UK, with industry-leading technology and supply chain capabilities. The Group employs c.13,600 people and
is headquartered in Dublin, Ireland. Greencore’s shares are listed on the London Stock Exchange and are included in the FTSE All Share Index
Exchange.
The Group’s performance and development activity is summarised in the Operating and Financial Review set out on pages 44 to 48.
The Group Income Statement, which is set out on page 122, details the Group’s results for FY23. The Group reported Adjusted Operating
Profit for the year of £76.3m (FY22: £72.2m). Profit for the financial year was £35.9m (FY22: £32.3m).
Dividends
The Group did not pay dividends to shareholders in FY23 and there is no proposed final dividend for the year (FY22: £nil).
Future developments
The Group continues to focus on improving profitability and is investing in a number of initiatives focused on both optimising our network and
our IT infrastructure, to give us the platform for future growth. The Group’s stronger balance sheet provides the financial flexibility to underpin
this growth. The Group is pleased with the start to the year and although it’s early days, the Group remains confident in delivering FY24 within
the range of current market expectations.
Principal risks and uncertainties
Pursuant to Section 327(1)(b) of the Companies Act 2014, the 2018 UK Corporate Governance Code (the ‘Code’) and DTR 4.1.8R(2), the
principal risks and uncertainties that could affect the Group’s business are set out on pages 52 to 57 and are deemed to be incorporated in this
part of the Directors’ Report.
Principal subsidiaries
The principal subsidiary undertakings are listed in Note 31 to the Group Financial Statements.
Corporate governance
Statements by the Directors relating to the Group’s application of corporate governance principles, compliance with the principles and
provisions of the Code is set out on pages 60 and 61. The Group’s system of internal controls and the adoption of the going concern basis in
the preparation of the Group Financial Statements are set out on pages 82 to 87.
Greencore Group plc has applied the principles of the Code and complied with the provisions of the Code on a comply or explain basis for the
year ended 29 September 2023.
Greencore Group plc is registered in Ireland and, as an Irish incorporated company, it is not subject to the UK executive remuneration
requirements as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as updated.
Greencore Group plc is listed on the main market of the London Stock Exchange, and so it is not a ‘traded PLC’ for the purposes of Section
1110N of the Companies Act 2014. Nonetheless, in order to ensure transparency for all of our stakeholders, we have sought to comply
with these requirements on a voluntary basis in respect of the members of the Board to the extent possible under Irish law. The Report on
Directors’ Remuneration is contained on pages 88 to 106.
Taskforce on Climate-related Financial Reporting (‘TCFD’) reporting
The Company’s compliance with the TCFD Recommendations and Recommended Disclosures pursuant to UK Listing Rule 9.8.6R is set out
on pages 32 to 39.
Non-financial information statement
Pursuant to the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations
2017 (‘Regulations’), the Group is required to report on certain non-financial information to provide an understanding of its development,
performance, position and the impact of its activities, relating to, at least, environmental matters, social matters, employee matters, respect for
human rights, and bribery and corruption. We have set out the location of the information required by the Regulations to be included in this
Annual Report in the table below. Each referenced section of the Annual Report is deemed to form part of this Directors’ Report.
Reporting requirements
Environmental matters
Policies and programmes that govern our approach
Location of information
• Code of Ethics and Business Conduct
• Responsible Sourcing of Soy Policy
• Responsible Sourcing of Code of Conduct
Policy
Sustainability section on pages 22 to 39
Non-financial KPIs on page 42
109
Communities
Social and employee matters
Human rights
• Code of Ethics and Business Conduct
• Community Policy
• Code of Business Practice
• Code of Ethics and Business Conduct
• Ethical Code and Employment Standards
Policy
• Whistleblowing and Speak Up Policy
• Code of Ethics and Business Conduct
• Human Rights Policy
• FY22 Modern Slavery and Human
Trafficking Transparency Statement
Sustainability section on page 28
Sustainability on pages 30 to 31
Non-financial KPIs on page 42
Sustainability on page 26
Anti-bribery and corruption
• Anti-Bribery and Corruption Policy
Sustainability on page 31
Prevention of modern slavery
Diversity
Statement
• Code of Ethics and Business Conduct
• Code of Ethics and Business Conduct
• Modern Slavery and Human Trafficking
Transparency Statement
• Group Inclusion and Diversity Policy
• Board Diversity Policy
• Code of Ethics and Business Conduct
• Ethical Code and Employment Standards
Policy
Sustainability on page 26
Sustainability on pages 30 and 31
Report of the Nomination and Governance
Committee on page 81
Whistleblowing
• Code of Ethics and Business Conduct
• Ethical Code and Employment Standards
Report of the Audit and Risk Committee on
pages 86 and 87
Policy
• Whistleblowing and Speak Up Policy
Business model
Non-financial Key Performance Indicators
Principal risks
–
–
–
Business model on pages 6 and 7
Non-financial KPIs on pages 42 and 43
Risk and risk management on pages 52 to 57
In addition to the information required by the Regulations, the Group publishes a comprehensive Sustainability Report annually which details
our Sustainability Strategy, environmental and governance responsibilities and commitment to social matters. The 2023 Sustainability Report
is available on our website www.greencore.com.
Shareholders’ meetings
The Company operates under the Irish Companies Act 2014 (‘Act’). The Act provides for two types of shareholder meetings: the Annual
General Meeting (‘AGM’), with all other general meetings being called an Extraordinary General Meeting (‘EGM’).
The Company must hold a general meeting each year as its AGM, in addition to any other general meetings held in that year. Not more than
15 months may elapse between the date of one AGM and the next. EGMs can also be convened at the request of members holding not less
than 5% of the voting share capital of the Company. The notice period for an AGM and an EGM to consider any special resolution (a resolution
which requires a 75% majority vote, not a simple majority) is 21 days.
A member or a group of members holding at least 3% of the issued share capital of the Company which carries voting rights has the right
to put an item on the agenda of an AGM, provided the member(s) exercise(s) that right within the prescribed time period, or to table a draft
resolution for an item on the agenda of a general meeting.
No business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business. Two
members present in person or by proxy and entitled to vote shall be a quorum. Only those shareholders registered on the Company’s register
of members at the prescribed record date, being a date not more than 72 hours before the general meeting to which it relates, are entitled to
attend and vote at a general meeting.
Under the Act, ordinary resolutions may be passed by a majority of votes cast in favour, while special resolutions require a 75% majority of
votes cast in favour. Any shareholder who is entitled to attend, speak and vote at a general meeting is entitled to appoint one or more proxies
to attend, speak and vote on their behalf. A proxy need not be a member of the Company. Resolutions are voted on by either a show of hands
of those shareholders attending in person or by proxy, or, if validly requested, by way of a poll.
The business of the Company is managed by the Directors who may exercise all the powers of the Company unless they are required to be
exercised by the Company in a general meeting. Matters reserved to shareholders in general meetings include the election of Directors,
the declaration of final dividends on the recommendation of the Directors, the fixing of the remuneration of the external auditor, amendments
to the Articles of Association, measures to increase or reduce the ordinary share capital and the authority to issue shares.
Strategic Report | Directors’ Report | Financial Statements | Other Information 110 Greencore Group plc Annual Report and Financial Statements 2023
Other statutory disclosures continued
Notice of general meetings and special business
The notice of the 2024 AGM, together with details of special business to be considered at the meeting, will be circulated to shareholders
during December 2023.
Share capital
As at 30 September 2022, there were 516,836,560 Ordinary Shares in issue. In FY23, no (FY22; 18,575) Ordinary Shares were issued under the
Company’s ShareSave Schemes.
On 24 May 2022, the Company announced its intention to recommence value return of up to £50 million over the following two years
consistent with the Group’s capital management policy (the ‘Buyback Programme’). In FY22, the Company purchased 9,728,677 ordinary
shares under the Buyback Programme, returning a total of £8.8m in cash to shareholders. In FY23, the Company purchased a total of
33,382,718 ordinary shares under the Buyback Programme, returning a total of £26.2m in cash to shareholders. All shares purchased under
the Buyback Programme were cancelled.
The table below sets out the ordinary shares purchased under the Buyback Programme during FY23. See Note 25 to the Consolidated
Financial Statements for further details.
Month
October 2022
November 2022
December 2022
January 2023
February 2023
March 2023
April 2023
May 2023
June 2023
July 2023
August 2023
Total
Total number of
share buyback
purchases
Weighted
average price
paid per share (£)
1,666,838
973,215
3,345,174
3,946,602
4,308,320
3,110,000
2,495,484
1,799,164
3,970,667
4,408,732
3,358,522
33,382,718
0.7321
0.6681
0.6341
0.7346
0.8149
0.8151
0.8134
0.8209
0.7701
0.8451
0.8778
0.7751
As at 29 September 2023, Greencore’s issued ordinary share capital consisted of 483,453,842 Ordinary Shares with voting rights.
On 10 October 2023, the Company announced a further Buyback Programme of a maximum aggregate consideration of up to £15 million.
Between 10 October 2023 and 24 November 2023, the Company purchased a total of 4,907,006 ordinary shares under the Buyback
Programme, returning a total of £4.5m in cash to shareholders.
One Special Share of €1.26 exists in the share capital of the Company. The Articles of Association provide that the Special Share may be
held only by, or transferred only to, the Minister for Agriculture, Food and the Marine or some other person appointed by the Minister. Under
the Articles of Association, the consent of the holder of the Special Share is required in the winding up of the Company. Many of the rights
attached to the Special Share were abolished in 2011.
At the AGM held on 26 January 2023, amongst other resolutions passed:
• shareholders passed a resolution to give the Company, or any of its subsidiaries, the authority to make market purchases and overseas
market purchases of up to 10% of its own shares;
• shareholders gave the Directors authority to allot shares up to a maximum nominal amount equal to approximately 33% of the aggregate
nominal value of the issued ordinary share capital of the Company;
• shareholders gave authority to Directors to disapply pre-emption rights; and
• shareholders gave authority to Directors to re-allot shares purchased by the Company and not cancelled as treasury shares.
At the forthcoming AGM scheduled to take place on 25 January 2024 (‘2024 AGM’), amongst other resolutions, Directors will seek:
• authority to make market purchases or overseas market purchases of up to 10% of its own shares. If approved, any purchases will be made
only at price levels which the Directors consider to be in the best interests of the shareholders generally, taking into consideration the
Group’s overall financial position;
• approval to allot relevant shares up to an amount equal to approximately 33% of the aggregate nominal value of the issued ordinary share
capital of the Company;
• approval to disapply the strict statutory pre-emption provisions relating to the issue of new equity for cash until the date of the AGM to be
held in 2025, or 25 April 2025, whichever is earlier; and
• authority to re-allot shares purchased by the Company and not cancelled as treasury shares. If the resolution is passed, the authority will
expire on the earlier date of the AGM in 2025 or 25 April 2025 and the minimum price at which treasury shares may be re-allotted shall be
set at the nominal value of the share where such a share is required to satisfy an obligation under an employee share scheme or, in all other
cases, an amount equal to 95% of the then market price of such shares and the maximum price at which treasury shares may be re-allotted
shall be set at 120% of the then market price of such shares.
111
Memorandum and Articles of Association
The Company’s Memorandum and Articles of Association set out the objects and powers of the Company. The Articles of Association detail
the rights attaching to shares, the method by which the Company’s shares can be purchased or re-issued, the provisions which apply to the
holding of and voting at general meetings and the rules relating to the Directors, including their appointment, retirement, re-election, duties
and powers. The Company’s Articles of Association may be amended by a special resolution passed by the shareholders at an AGM or EGM of
the Company. The Company’s Articles of Association were last amended at the 2021 EGM, and a copy can be obtained from the Company’s
website, www.greencore.com.
Directors’ interests in the Ordinary Shares at 29 September 2023
The interests of Directors and Group Company Secretary in the shares of the Company are set out in the Report on Directors’ Remuneration.
The Directors and Group General Counsel and Company Secretary have no beneficial interests in any of the Group’s subsidiary or associated
undertakings.
Going concern and viability statement
The going concern and viability statements set out on page 58 are deemed to be incorporated in this section of the Directors’ Report.
Directors’ compliance statement
The Directors acknowledge that they are responsible for securing compliance by the Company of its relevant obligations as defined in the
Companies Act 2014 (‘Relevant Obligations’). The Directors further confirm that there is a compliance policy statement in place setting out
the Company’s policies which, in the Directors’ opinion, are appropriate to ensure compliance with the Company’s Relevant Obligations.
The Directors also confirm that appropriate arrangements and structures are in place which, in the Directors’ opinion, are designed to secure
material compliance with the Company’s Relevant Obligations. For the year ended 29 September 2023, the Directors, with the assistance of
Internal Audit, conducted a review of the arrangements and structures in place. In discharging their responsibilities under Section 225 of the
Companies Act 2014, the Directors relied on the advice of persons who the Directors believe have the requisite knowledge and experience to
advise the Company on compliance with its Relevant Obligations.
Directors for year ended 29 September 2023
The names of each of the current Directors and a short biographical note on each Director appear on pages 62 and 63.
On 31 December 2022, Helen Weir stepped down from the Board as Non-Executive Director and Chair of the Audit and Risk Committee. At
the conclusion of the AGM on 26 January 2023, Gary Kennedy retired from his role as Non-Executive Director and Board Chair, Paul Drechsler
also retired from his role as Non-Executive Director and Leslie Van de Walle assumed the position of Board Chair on the same date. On
1 February 2023, Alastair Murray was appointed to the Board as a Non-Executive Director and Chair of the Audit and Risk Committee and on
1 April 2023, Harshitkumar (Hetal) Shah was appointed to the Board as a Non-Executive Director. Emma Hynes stepped down from her role as
Executive Director and Chief Financial Officer in 31 May 2023.
John Amaechi and Sly Bailey have advised the Board that they will not be seeking re-election at the 2024 AGM. This is discussed further in the
Report of the Nomination and Governance Committee. In early 2024 Catherine Gubbins will join the Board as Executive Director and Chief
Financial Officer.
In accordance with the Company’s Articles of Association and Provision 18 of the Code, each of the Directors individually retire at each AGM
of the Company and, where appropriate, submit themselves for re-election. No reappointment is automatic and all Directors who intend
to submit themselves for re-election are subject to a full and rigorous evaluation. One of the main purposes of the evaluation is to assess
each Director’s suitability for re-election. If a Director is not deemed to be effective in carrying out his or her required duties, the Board will
not recommend that Director for re-election. In line with the Code, in the year under review, each Director, and the Board as a whole, were
subject to an internal evaluation. Details of the Board evaluation can be found on page 77. Following on from the evaluation, the Board Chair
and Board are pleased to recommend for re-election each of those Directors who intend to seek reappointment at the forthcoming AGM as
they continue to be effective and remain committed to their role on the Board.
Significant shareholdings
At 29 September 2023, the Company has been advised of the following notifiable interests in its ordinary share capital:
Shareholder
Polaris Capital Management, LLC
Morgan Stanley & Co. International plc
Rubric Capital Management LP
Brandes Investment Partners, L.P.
Utah State Retirement Systems
The Goldman Sachs Group
Black Creek Investment Management Inc.
Notified
shareholding as
at 29 September
2023
Percentage of
total Ordinary
Shares in issue
67,119,773
29,297,648
27,415,831
25,375,324
15,474,404
15,001,314
15,834,000
13.00
5.96
5.20
5.12
3.20
3.10
3.01
Strategic Report | Directors’ Report | Financial Statements | Other Information 112 Greencore Group plc Annual Report and Financial Statements 2023
Other statutory disclosures continued
At 24 November 2023, the Company has been advised of the following notifiable interests in its ordinary share capital:
Shareholder
Polaris Capital Management, LLC
Morgan Stanley & Co. International plc
Rubric Capital Management LP
Brandes Investment Partners, L.P.
Utah State Retirement Systems
The Goldman Sachs Group
Black Creek Investment Management Inc.
Notified
shareholding as
at 24 November
2023
Percentage of
total Ordinary
Shares in issue
62,751,510
29,297,648
27,415,831
25,375,324
15,474,404
15,001,314
15,834,000
12.97
5.96
5.20
5.12
3.20
3.10
3.01
Other than these holdings, the Company has not been notified as at 24 November 2023 of any interest of 3% or more in its ordinary share
capital.
Accounting records
The Directors believe that they have complied with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to
maintaining adequate accounting records by employing accounting personnel with appropriate expertise and by providing adequate
resources to the Finance function. The accounting records of the Company are maintained at the Company’s registered office address at No.
2 Northwood Avenue, Northwood Business Park, Santry, Dublin 9, D09 X5N9, Ireland.
Research and development
The Group continued its research and development programme in relation to its principal activities during the year under review. Further
information is contained in Note 3 to the Group Financial Statements.
Political contributions
The Company made no political contributions which are required to be disclosed under the Electoral Act, 1997 (as amended).
Audit and Risk Committee
The Company has an Audit and Risk Committee, the members of which are set out on page 82.
Auditor
Deloitte Ireland LLP (‘Deloitte’) were appointed as external auditor in January 2019. At the AGM of the Company on 26 January 2023, under an
advisory resolution, the shareholders approved the reappointment of Deloitte as external auditor for its fifth year. Under Irish legislation, the
Company’s external auditor is automatically reappointed each year at the AGM unless the meeting passes a resolution to appoint a different
auditor or provides that the existing external auditor shall not be reappointed or, alternatively, if the auditor expresses its unwillingness to
continue in office. At the 2024 AGM, the Company intends to once again put an advisory resolution before shareholders in respect of the
continuation in office of Deloitte as external auditor.
As required under Section 381(1)(b) of the Companies Act 2014, a resolution authorising the Directors to determine the remuneration of the
external auditor will be proposed at the 2024 AGM.
Disclosure of information to the auditor
Each of the Directors individually confirm that:
•
•
insofar as they are aware, there is no relevant audit information of which the Company’s statutory auditor is unaware; and
they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit
information and to establish that the Company’s statutory auditor is aware of such information.
The referenced sections are deemed to be incorporated within this Directors’ Report.
On behalf of the Board
Leslie Van de Walle
Board Chair
Dublin
27 November 2023
Dalton Philips
Director
Statement of Directors’ Responsibilities
113
Responsibility statement in regard to
Annual Report
Each of the Directors, whose names and
functions are listed on pages 62 and 63 of
this Annual Report and Financial Statements,
confirm that, to the best of each person’s
knowledge and belief:
as required by the Transparency Rules:
•
the Group Financial Statements, prepared
in accordance with IFRS as adopted
by the EU and the Company Financial
Statements prepared in accordance with
FRS 101: Reduced Disclosure Framework,
give a true and fair view of the assets,
liabilities, financial position of the Group
and Company at 29 September 2023 and
the profit of the Group for the year then
ended;
the Directors’ Report contained in this
Annual Report and Financial Statements
includes a fair review of the development
and performance of the business and
the position of the Group and Company,
together with a description of the
principal risks and uncertainties that they
face; and
•
The Directors are responsible for keeping
adequate accounting records which disclose
with reasonable accuracy at any time the
assets, liabilities, financial position and
profit or loss of the Group and Company
and which enable them to ensure that the
Financial Statements of the Group and
Company comply with the provisions of
the Companies Act 2014. The Directors are
also responsible for taking all reasonable
steps to ensure such records are kept by the
Group’s subsidiaries which enable them to
ensure that the Financial Statements of the
Group comply with the provisions of the
Companies Act 2014. They are responsible
for such internal controls as they determine
is necessary to enable the preparation of
Financial Statements that are free from
material misstatement, whether due to fraud
or error, and have general responsibility for
safeguarding the assets of the Company and
the Group, and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities. The Directors
are also responsible for preparing a Directors’
Report that complies with the requirements
of the Companies Act 2014.
Furthermore, the Directors are responsible
for the maintenance and integrity of
corporate and financial information
included on the Group’s website
(www.greencore.com). Legislation in
Ireland concerning the preparation and
dissemination of Financial Statements may
differ from legislation in other jurisdictions.
as required by the Code:
•
this Annual Report and Financial
Statements, taken as a whole, is fair,
balanced and understandable and
provides the information necessary
for shareholders to assess the Group’s
position, performance, business model
and strategy.
On behalf of the Board
Leslie Van de Walle
Board Chair
Dalton Philips
Director
Dublin
27 November 2023
In accordance with the 2018 UK Corporate
Governance Code (the ‘Code’), the Directors
must provide an explanation of their
responsibility for preparing the Annual
Report and Financial Statements and
state, having taken all relevant matters into
consideration, whether they consider that
the Annual Report and Financial Statements,
taken as a whole, is fair, balanced and
understandable and provides shareholders
with the information necessary to assess
the Group’s position, performance, business
model and strategy.
The Directors confirm that they have
complied with the above requirements in
preparing the Annual Report and Financial
Statements.
The Directors are responsible for preparing
the Annual Report and Financial Statements
in accordance with applicable law and
regulations.
Company law requires the Directors to
prepare Financial Statements for each
financial year. Under that law the Directors
are required to prepare the Group Financial
Statements in accordance with International
Financial Reporting Standards (‘IFRS’) as
adopted by the European Union (‘EU’) and
with those parts of the Companies Act
2014 applicable to companies reporting
under IFRS. The Directors have elected to
prepare the Company Financial Statements
in accordance with FRS 101: Reduced
Disclosure Framework issued by the Financial
Reporting Council together with the
Companies Act 2014.
Under company law, Directors shall not
approve the Group and Company Financial
Statements unless they are satisfied that
they give a true and fair view of the assets,
liabilities and financial position of the Group
and Company respectively and of the
Group’s profit or loss for that financial year.
In preparing these Group and Company
Financial Statements, the Directors are
required to:
• select suitable accounting policies and
apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
• state that the Group Financial Statements
have been prepared in accordance with
IFRS as adopted by the EU and as applied
in accordance with the Companies
Act 2014 and the Company Financial
Statements have been prepared in
accordance with FRS 101 together with
the Companies Act 2014;
• assess the Company and the Group’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern; and
• prepare the Financial Statements on
the going concern basis, unless it is
inappropriate to presume that the Group
or Company will continue in business.
The Directors are also required by the
Disclosure Guidance and Transparency
Rules of the UK Financial Conduct Authority
(the ‘Transparency Rules’) to include a
management report containing a fair review
of the business and a description of the
principal risks and uncertainties facing the
Group.
Strategic Report | Directors’ Report | Financial Statements | Other Information 114 Greencore Group plc Annual Report and Financial Statements 2023
Independent Auditor’s Report
to the members of Greencore Group plc
Report on the audit of the financial statements
Opinion on the financial statements of Greencore Group plc (the ‘Company’)
In our opinion the Group and Company financial statements:
• give a true and fair view of the assets, liabilities and financial position of the Group and the Company as at 29 September 2023 and of the
profit of the Group for the financial year then ended; and
• have been properly prepared in accordance with the relevant financial reporting frameworks and, in particular, with the requirements of the
Companies Act 2014.
The financial statements we have audited comprise:
The Group financial statements:
the Group Income Statement;
•
the Group Statement of Comprehensive Income;
•
the Group Statement of Financial Position;
•
the Group Statement of Cash Flows;
•
the Group Statement of Changes in Equity; and
•
the related Notes 1 to 33, including a summary of significant accounting policies as set out in Note 1.
•
The Company financial statements:
•
•
•
the Company Statement of Financial Position;
the Company Statement of Changes in Equity; and
the related Notes 1 to 10, including a summary of significant accounting policies as set out in Note 1.
The relevant financial reporting framework that has been applied in the preparation of the Group financial statements is the Companies Act
2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union (‘the relevant financial reporting framework’).
The relevant financial reporting framework that has been applied in the preparation of the Company financial statements is the Companies
Act 2014 and FRS 101 ‘Reduced Disclosure Framework’ issued by the Financial Reporting Council (‘the relevant financial reporting framework’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our
responsibilities under those standards are described below in the ‘Auditor’s responsibilities for the audit of the financial statements’
section of our report.
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority, as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
115
Summary of our audit approach
Key Audit Matters
The Key Audit Matters that we identified in the current year were:
•
• Recoverability of Investment in Subsidiary Undertakings (Company only Key Audit Matter)
Impairment of Goodwill; and
Within this report, any new Key Audit Matters are identified with
the prior year are identified with
.
and any Key Audit Matters which are the same as
Materiality
The materiality for the Group that we used in the current year was £3m which was determined on the basis of Net
Assets representing 0.7% of this benchmark (2022: £3m, representing 0.6% of Net Assets).
The materiality for the Company that we used in the current year was £1.65m which was determined on the basis of
Net Assets representing 0.5% of this benchmark (2022: £1.65m, representing 0.4% of Net Assets).
Scoping
We determined the scope of our Group audit by obtaining an understanding of the Group and its environment and
assessing the risks of material misstatement at the Group level.
Our audit scoping provides coverage of 100% of revenue, and 99.8% of net assets (2022: 100% of revenue and 99.8%
of net assets).
Significant changes in
our approach
Key audit matters considered in the prior year were broadly aligned with the items identified above, but also included
going concern. Going concern is not considered a key audit matter in our audit of the current financial year as the risk
associated with it has reduced compared to the prior year, especially due to stabilising macro-economic conditions.
There are no new key audit matters identified this year.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and Company’s ability to continue to adopt the going concern basis of accounting
included:
• We evaluated the design and determined the implementation of the relevant controls in place over the Directors’ review of the going
concern cash flow projections and various scenarios.
• Subsequent to the year end, the Group refinanced its debt facilities. We reviewed the amendments to the Group’s re-financing agreements
and obtained an understanding of the debt covenants applicable to the Group and the respective impact going forward in the going
concern cash flow projections.
• We challenged the Directors’ assumptions used in their going concern assessment, the basis for their evaluation and inclusion of
sensitivities to incorporate the risks and uncertainties related to macro-economic factors such as supply chain disruption, labour
challenges, inflationary pressures, and climate risk on future trading.
• We have evaluated the Directors’ assessment of the risks and uncertainties related to macro-economic factors and the adequacy of
disclosures in relation to the specific risks these pose.
• We performed sensitivity analysis using alternative, reasonably possible assumptions and other market trading challenges such as inflation
and recessionary pressures. We compared outputs from the Group’s cash flow projections and from our sensitivity analysis to the
Directors’ proforma covenant compliance calculations.
• We evaluated the completeness and accuracy of the disclosures made in the Basis of Preparation Note 1 by reference to the understanding
we had obtained of the Group’s financial performance during 2023, our assessment of Directors’ cash flow projections and our reading of
the Group’s financing agreements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group and Company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to
continue to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Strategic Report | Directors’ Report | Financial Statements | Other Information 116 Greencore Group plc Annual Report and Financial Statements 2023
Independent Auditor’s Report continued
to the members of Greencore Group plc
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of
the current financial year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Impairment of Goodwill
Key Audit Matter description
How the scope of our audit
responded to the Key Audit
Matter
As stated in Note 12 (Goodwill and Intangible Assets), the Group held £447.3m (2022: £449.4m) of goodwill as
at 29 September 2023 which represents 34.5% of the Group’s total assets. The accounting policies in relation to
Goodwill are described in Note 1 (Significant Sources of Accounting Estimates) to the financial statements.
Directors’ judgement is required in identifying indicators of impairment, and estimation is required in
determining the recoverable amount of the Group’s cash generating unit (‘CGU’). There is a risk that an
impairment of goodwill has arisen which has not been appropriately identified. As a result, the balances
could be overstated on the Statement of Financial Position at year-end due to the use of inappropriate
inputs and assumptions within the impairment model, in particular the discount rate and the long-term
growth rate. This risk relates to the Group’s Convenience Foods UK CGU as it accounts for 100% of the
Group’s goodwill balance.
When a review for impairment is carried out, the recoverable amount of the CGU is compared to its
carrying value. The recoverable amount is determined based on value in use calculations which rely on
Directors’ assumptions and estimates of future trading performance. These assumptions and estimates may
be impacted by the continuing risks and uncertainties arising from the Russia-Ukraine conflict and other
macro-economic factors such as supply chain disruption, labour challenges, inflationary pressures, climate
risk and potentially rising interest rates, resulting in reduced headroom, and potentially impairment in the
carrying value of goodwill.
The key assumptions utilised by the Directors in the impairment reviews are discount rates and long-term
growth rate. A small change in these specific assumptions could have a significant impact on the value in
use calculation, therefore this is considered a Key Audit Matter.
The Audit and Risk Committee’s discussion of goodwill is set out on page 85.
In order to address the Key Audit Matter, our procedures included the following:
We evaluated the design and determined the implementation of the relevant controls in place over the
Directors’ impairment review process.
We, in conjunction with our valuation specialists, evaluated the methodology applied by the Directors in
preparing the value in use calculations and the judgements applied in determining the CGU.
We challenged the underlying key assumptions within the Group’s impairment model, focusing on the
discount rates and profitability growth rates. We challenged the Group’s scenarios with reference to recent
performance, economic and industry forecasts and trend analysis including historic growth rates and
market available information.
We also challenged the cash flow projections by comparing them to historic rates and Group strategic plans.
We assessed the reasonableness of related assumptions used in determining terminal values.
We developed an independent view of the key assumptions used in the model, in particular, the Group
discount rate and long-term growth rate, and benchmarked the rates used by Directors against market
data and comparable organisations. We also assessed any changes made to the impairment model when
calculating the headroom available.
We evaluated the Directors’ sensitivity analysis and performed our own sensitivity analysis on the key
assumptions used.
We evaluated the completeness and accuracy of the disclosures in relation to goodwill and whether they
meet the requirements of the relevant accounting standards.
Key observations
Based on the procedures performed, we have determined the Directors’ assumptions used in the
assessment of the impairment of goodwill are reasonable.
We concluded that the related disclosures provided in the Group Financial Statements are appropriate.
117
Recoverability of Investment in Subsidiary Undertakings (Company only Key Audit Matter)
Key Audit Matter description
As outlined in Note 1 (Significant accounting judgements) to the Company financial statements, investments
in subsidiary undertakings are carried at cost less impairment. Investment in subsidiary undertakings is
significant and represents over 99% of total assets recorded on the Company Statement of Financial Position.
Impairments in subsidiary undertakings are determined with reference to the individual subsidiary
undertakings’ recoverable value, which could have been adversely effected by the current environment.
Directors’ judgements around valuation of investments in subsidiaries are considered significant judgements
given the magnitude of the investments on the Company Statement of Financial Position. With limited
headroom, changes in judgements resulting in reduced recoverable value could result in material
impairment in the Company income statement.
Given the significant judgement involved in assessing the recoverable value of the investments held in
subsidiary undertakings, we have considered this to be a Key Audit Matter at the Company level.
The Audit and Risk Committee’s discussion of Investment in Subsidiaries is set out on page 85.
In order to address the Key Audit Matter, our procedures included the following:
We evaluated the design and determined the implementation of the relevant controls in place over the
Directors’ impairment review process.
We assessed the recoverable value of subsidiary undertakings for any objective indicators of impairment
and tested the accuracy of Directors’ calculations.
We confirmed that the Directors used the most up to date financial information in their valuation models
and assessed the reasonableness of the assumptions made in determining the recoverable amount of their
investments in subsidiaries.
The Directors have recorded an impairment charge of £1.5m in relation to the investments held in
subsidiary undertakings. We have no other observations in respect of the recoverability of investment in
subsidiary undertakings.
How the scope of our audit
responded to the Key Audit
Matter
Key observations
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to
express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the
risks described above, and we do not express an opinion on these individual matters.
Our application of materiality
We define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable
person, relying on the financial statements, would be changed or influenced. We use materiality both in planning the scope of our audit work
and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality
£3m (2022: £3m)
£1.65m (2022: £1.65m)
Group financial statements
Company financial statements
Basis for determining
materiality
Approximately 0.7% of Net Assets (2022: 0.6% of Net
Assets).
Approximately 0.5% of Net Assets (2022: 0.4% of Net
Assets).
Rationale for the
benchmark applied
We considered Net Assets to be the critical component
for determining materiality because it represents the
cumulative undistributed gains and capital and reserves
of the Group. In determining materiality, we considered
the Group’s profitability, and the decrease in the net
asset position of the Group since last year. However,
given the continuing uncertainties relating to the
potential impact of the Russia-Ukraine conflict, supply
chain issues and inflationary pressures, we considered
that remaining at a stable level of Group materiality was
most appropriate.
We considered Net Assets to be the critical component
for determining materiality because the Company
is a non-trading company, which does not generate
revenues but incurs costs. Net Assets are of most
relevance to the users of the financial statements.
Given the continuing uncertainties relating to the
potential impact of the Russia-Ukraine conflict, supply
chain issues and inflationary pressures, we considered
that remaining at a stable level of Company materiality
was most appropriate.
Strategic Report | Directors’ Report | Financial Statements | Other Information 118 Greencore Group plc Annual Report and Financial Statements 2023
Independent Auditor’s Report continued
to the members of Greencore Group plc
Our application of materiality continued
Net Assets
£459.8m
Net Assets
Materiality
Materiality
£3m
Audit Committee
reporting threshold
£0.15m
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the financial statements as a whole.
Performance materiality 80% of Group materiality
80% of Company materiality
Group financial statements
Company financial statements
Basis and rationale
for determining
performance materiality
In determining performance materiality, we considered the following factors:
a. our understanding of the entity and its environment and the impact of various macro-economic factors,
b. the financial performance of the Group and Company since last year,
c. risks identified in relation to potential labour shortages, supply chain disruption, the rising impact of interest
rates and inflation affecting the trading environment,
d. the nature, volume, and size of misstatements (corrected and uncorrected) in the previous audit,
e. the likelihood of the prior year misstatements reoccurring in the current year audit.
We agreed with the Audit and Risk Committee that we would report to them any audit differences in excess of £0.15m, as well as differences
below that threshold which, in our view, warranted reporting on qualitative grounds. We also report to the Audit and Risk Committee on
disclosure matters that we identified when assessing the overall presentation of the financial statements.
An overview of the scope of our audit
We determined the scope of our Group audit by obtaining an understanding of the Group and its environment, including Group-wide
controls, and assessing the risks of material misstatement at the Group level. In determining our audit scope, we considered the changes in
the Group structure, including the amalgamation of reporting components during the year. Based on that assessment, we focused our Group
audit scope primarily on the audit of 6 trading components which were subject to a full scope audit and 15 non-trading, investment holding or
financing components which were subject to specified audit procedures where the extent of our testing was based on our assessment of the
associated risks of material misstatement and of the materiality of the component operations to the Group. The remaining components of the
Group were subject to analytical procedures.
These components were selected based on the level of coverage achieved and to provide an appropriate basis for undertaking audit work to
address the risks of material misstatement identified above. Our audit work for all components was executed at levels of materiality applicable
to each individual component which were lower than Group materiality and ranged from £0.9m to £2.1m.
At the Group level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were
no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to a full audit.
Revenue
Net Assets
4.2%
95.8%
Full Scope Audits
Specified Audit
Procedures
Analytical Procedures
0.2%
22%
77.8%
Full Scope Audits
Specified Audit Procedures
Analytical Procedures
Full Scope Audits
Specified Audit
Procedures
Analytical Procedures
Revenue
Net Assets
95.8%
4.2%
–
77.8%
22.0%
0.2%
During the year, the Group audit team, while adopting a hybrid approach of in-person and virtual meetings, attended planning meetings at
a number of significant and non-significant components in all key locations. In addition to attending planning meetings, we sent detailed
instructions to our component audit teams, included them in our team briefings, discussed their risk assessment, attended client planning and
closing meetings, and reviewed their audit working papers.
119
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements
and our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report and Financial
Statements.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal
control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at: Description of the
auditor’s responsibilities for the audit of the financial statements – IAASA. This description forms part of our auditor’s report. This description
forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
•
the nature of the industry and sector, control environment and business performance including the design of the Group and Company’s
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management including legal department, General Counsel and Corporate Secretary and the Audit Committee
about their own identification and assessment of the risks of irregularities;
•
• any matters we identified having obtained and reviewed the Group and Company’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team, component audit teams and relevant internal specialists, including tax,
valuations, pensions and IT regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
•
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified
the greatest potential for fraud in the area of revenue recognition (rebates and discounts). In common with all audits under ISAs (Ireland), we
are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Group and Company operates in, focusing on provisions
of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements.
The key laws and regulations we considered in this context included the Companies Act 2014, UK Corporate Governance Code 2018, London
Stock Exchange Listing Rules, Irish tax laws and UK tax laws.
Strategic Report | Directors’ Report | Financial Statements | Other Information 120 Greencore Group plc Annual Report and Financial Statements 2023
Independent Auditor’s Report continued
to the members of Greencore Group plc
Extent to which the audit was considered capable of detecting irregularities, including fraud continued
Identifying and assessing potential risks related to irregularities continued
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance
with which may be fundamental to the Group and Company’s ability to operate or to avoid a material penalty. These included the Group and
Company’s operating licence and environmental regulations.
Audit response to risks identified
As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance with laws
and regulations.
Our procedures to respond to risks identified included the following:
•
reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with provisions of relevant
laws and regulations described as having a direct effect on the financial statements;
• enquiring of management, the Audit and Risk Committee and in-house and external legal counsel concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due
•
•
to fraud;
reading minutes of meetings of those charged with governance and reviewing internal audit reports.
in addressing the presumed risk of fraud in revenue recognition (rebates and discounts), our procedures included:
– obtaining an understanding of and assessing the relevant controls in place over the various selling and rebate arrangements within
the Group;
– obtaining reconciliations showing the movements on rebates and discounts during the year. On a sample basis, we agreed a number
of rebates and discounts for the year to customer agreements and assessed whether there were any material one off or unusual
transactions during the year;
– considering material adjustments and renegotiations which occurred during the year and reviewed the accounting treatment to ensure
compliance with the requirements of IFRS 15.
•
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the
business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
•
• The Company Statement of Financial Position is in agreement with the accounting records.
•
In our opinion the information given in the Directors’ Report is consistent with the financial statements and the Directors’ Report and has
been prepared in accordance with the Companies Act 2014.
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited.
Corporate Governance Statement
The Listing Rules and ISAs (Ireland) require us to review the Directors’ statement in relation to going concern, longer-term viability and the
part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
•
the Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 58;
the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate set out on page 58;
the Directors’ statement on fair, balanced and understandable set out on page 113;
the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the Annual
Report and Financial Statements that describe the principal risks and the procedures in place to identify emerging risks and an explanation
of how they are being managed or mitigated set out on page 108;
the section of the Annual Report and Financial Statements that describes the review of effectiveness of risk management and internal
control systems set out on page 83; and
the section describing the work of the Audit and Risk Committee set out on page 82 to page 87.
•
•
•
•
•
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we have
not identified material misstatements in the Directors’ Report.
121
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the
disclosures of Directors’ remuneration and transactions specified by law are not made.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Kevin Sheehan
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, Earlsfort Terrace, Dublin 2
27 November 2023
Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in
particular on whether any changes may have occurred to the financial statements since first published. These matters are the responsibility of
the directors but no control procedures can provide absolute assurance in this area.
Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.
Strategic Report | Directors’ Report | Financial Statements | Other Information 122 Greencore Group plc Annual Report and Financial Statements 2023
Group Income Statement
financial year ended 29 September 2023
Revenue
Cost of sales
Gross profit
Operating costs before acquisition-
related amortisation
Impairment of trade receivables
Group operating profit/(loss) before
acquisition related amortisation
Amortisation of acquisition-related intangibles
Group operating profit/(loss)
Finance income
Finance costs
Profit/(loss) before taxation
Taxation
Profit/(loss) for the financial year attributable
to the equity holders
Earnings per share (pence)
Basic earnings per share
Diluted earnings per share
8
8
9
10
10
Notes
2
Pre-
exceptional
£m
1,913.7
(1,344.9)
568.8
3
22
(491.4)
(1.1)
2023*
Exceptional
(Note 7)
£m
–
–
–
(6.7)
–
(6.7)
–
(6.7)
–
–
(6.7)
1.2
Total
£m
1,913.7
(1,344.9)
Pre-
exceptional
£m
1,739.6
(1,216.6)
568.8
523.0
(498.1)
(1.1)
(449.6)
(1.2)
69.6
(3.6)
66.0
0.7
(21.5)
45.2
(9.3)
72.2
(3.6)
68.6
0.2
(12.5)
56.3
(10.5)
2022
Exceptional
(Note 7)
£m
–
–
–
(16.5)
–
(16.5)
–
(16.5)
–
–
(16.5)
3.0
Total
£m
1,739.6
(1,216.6)
523.0
(466.1)
(1.2)
55.7
(3.6)
52.1
0.2
(12.5)
39.8
(7.5)
76.3
(3.6)
72.7
0.7
(21.5)
51.9
(10.5)
41.4
(5.5)
35.9
45.8
(13.5)
32.3
7.2
7.2
6.2
6.1
* The financial year is the 52 week period ended 29 September 2023 with comparatives for the 53 week period ended 30 September 2022.
Group Statement of Comprehensive Income
financial year ended 29 September 2023
Other comprehensive income for the financial year
Items that will not be reclassified to profit or loss:
Actuarial (loss)/gain on Group legacy defined benefit pension schemes
Tax charge on Group legacy defined benefit pension schemes
Items that may subsequently be reclassified to profit or loss:
Currency translation adjustment
Translation reserve transferred to income statement on disposal of subsidiary
Cash flow hedges:
fair value movement taken to equity
transferred to Income Statement for the financial year
Other comprehensive income for the financial year
Profit for the financial year
Total comprehensive income for the financial year attributable to equity holders
123
Notes
2023*
£m
2022
£m
5
9
(9.2)
(0.6)
(9.8)
(0.5)
(0.6)
(3.1)
(1.5)
(5.7)
(15.5)
35.9
20.4
14.4
(4.1)
10.3
1.8
–
8.5
(1.6)
8.7
19.0
32.3
51.3
* The financial year is the 52 week period ended 29 September 2023 with comparatives for the 53 week period ended 30 September 2022.
Strategic Report | Directors’ Report | Financial Statements | Other Information 124 Greencore Group plc Annual Report and Financial Statements 2023
Group Statement of Financial Position
at 29 September 2023
ASSETS
Non-current assets
Goodwill and intangible assets
Property, plant and equipment
Right-of-use assets
Investment property
Retirement benefit assets
Derivative financial instruments
Deferred tax assets
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Derivative financial instruments
Total current assets
Total assets
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital
Share premium
Other reserves
Retained earnings
Total equity
LIABILITIES
Non-current liabilities
Borrowings
Lease liabilities
Other payables
Provisions
Retirement benefit obligations
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
Trade and other payables
Lease liabilities
Derivative financial instruments
Provisions
Current tax payable
Total current liabilities
Total liabilities
Total equity and liabilities
On behalf of the Board
Leslie Van de Walle
Director
Dalton Philips
Director
Notes
2023
£m
2022
£m
12
13
14
15
24
21
9
16
17
19
21
25
20
14
18
23
24
9
20
18
14
21
23
461.1
315.5
41.0
4.6
18.4
3.7
28.8
0.1
873.2
72.9
234.2
116.5
0.9
424.5
468.1
319.4
44.4
3.1
39.8
12.4
37.1
0.3
924.6
63.3
248.7
99.6
2.5
414.1
1,297.7
1,338.7
4.8
89.7
120.8
244.5
459.8
125.8
30.7
2.4
6.9
38.5
15.2
219.5
144.7
446.0
14.3
–
3.0
10.4
618.4
837.9
5.2
89.7
127.8
242.9
465.6
209.8
33.6
2.7
5.2
60.1
18.9
330.3
69.8
445.1
14.4
0.1
4.7
8.7
542.8
873.1
1,297.7
1,338.7
Group Statement of Cash Flows
financial year ended 29 September 2023
Profit before taxation
Finance income
Finance costs
Exceptional items
Group operating profit before exceptional items
Depreciation and impairment of property, plant and equipment and right-of-use assets
Amortisation of intangible assets
Employee share-based payment expense
Contributions to Group legacy defined benefit pension scheme
Working capital movement
Net cash inflow from operating activities before exceptional items, interest and tax
Cash outflow related to exceptional items
Interest paid (including lease liability interest)
Tax (paid)/refunded
Net cash inflow from operating activities
Cash flow from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Disposal of undertakings
Net cash outflow from investing activities
Cash flow from financing activities
Ordinary Shares purchased – own shares
Capital return via share buyback
(Repayment)/drawdown of bank borrowings
Repayment of Private Placement Notes
Settlement of swaps on maturity of Private Placement Notes
Repayment of lease liabilities
Net cash outflow from financing activities
Net decrease in cash and cash equivalents and bank overdrafts
Reconciliation of opening to closing cash and cash equivalents and bank overdrafts
Cash and cash equivalents and bank overdrafts at beginning of the financial year
Translation adjustment
Decrease in cash and cash equivalents and bank overdrafts
Cash and cash equivalents and bank overdrafts at end of the financial year
125
2022
£m
39.8
(0.2)
12.5
16.5
68.6
52.5
6.7
2.7
(11.5)
2.0
121.0
(13.6)
(16.7)
2.2
92.9
(48.6)
(1.4)
–
(50.0)
(3.0)
(8.8)
9.6
(47.3)
(2.6)
(17.3)
(69.4)
(26.5)
73.6
(0.4)
(26.5)
46.7
Notes
8
8
7
13, 14
12
24
26
7
28
22
22
14
19
19
2023*
£m
45.2
(0.7)
21.5
6.7
72.7
56.8
6.3
3.3
(11.1)
2.2
130.2
(10.9)
(17.6)
(2.7)
99.0
(36.0)
(1.4)
6.1
(31.3)
(3.9)
(26.2)
(20.2)
(15.5)
(0.1)
(15.6)
(81.5)
(13.8)
46.7
(0.1)
(13.8)
32.8
* The financial year is the 52 week period ended 29 September 2023 with comparatives for the 53 week period ended 30 September 2022.
Strategic Report | Directors’ Report | Financial Statements | Other Information 126 Greencore Group plc Annual Report and Financial Statements 2023
Group Statement of Changes in Equity
financial year ended 29 September 2023
At 30 September 2022
Total comprehensive income for the financial year
Actuarial loss on Group legacy defined benefit pension schemes
Tax charge on Group legacy defined benefit pension schemes
Currency translation adjustment
Translation reserve transferred to Income Statement on disposal of subsidiary
Cash flow hedge fair value movement taken to equity
Cash flow hedge transferred to income statement
Profit for the financial year
Total comprehensive income for the financial year
Transactions with equity holders of the Company
contributions and distributions
Employee share-based payments expense
Tax on share-based payments
Exercise, lapse or forfeit of share-based payments
Shares acquired by Employee Benefit Trust(A)
Transfer to retained earnings on grant of shares to beneficiaries
of the Employee Benefit Trust(B)
Capital return via share buyback(C)
Total transactions with equity holders of the Company
At 29 September 2023*
At 24 September 2021
Total comprehensive income for the financial year
Actuarial gain on Group legacy defined benefit pension schemes
Tax charge on Group legacy defined benefit pension schemes
Currency translation adjustment
Cash flow hedge fair value movement taken to equity
Cash flow hedge transferred to income statement
Profit for the financial year
Total comprehensive income for the financial year
Transactions with equity holders of the Company
contributions and distributions
Employee share-based payments expense
Tax on share-based payments
Exercise, lapse or forfeit of share-based payments
Shares acquired by Employee Benefit Trust(A)
Transfer to retained earnings on grant of shares to beneficiaries
of the Employee Benefit Trust(B)
Capital return via share buyback(C)
Total transactions with equity holders of the Company
At 30 September 2022*
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
5.2
89.7
127.8
242.9
465.6
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.4)
(0.4)
4.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.5)
(0.6)
(3.1)
(1.5)
–
(5.7)
3.6
–
(3.3)
(3.9)
1.9
0.4
(1.3)
(9.2)
(0.6)
–
–
–
–
35.9
26.1
–
0.3
3.3
–
(1.9)
(26.2)
(24.5)
(9.2)
(0.6)
(0.5)
(0.6)
(3.1)
(1.5)
35.9
20.4
3.6
0.3
–
(3.9)
–
(26.2)
(26.2)
89.7
120.8
244.5
459.8
Share
capital
Share
premium
£m
5.3
£m
89.7
Other
reserves
£m
Retained
earnings
£m
Total
£m
121.4
206.8
423.2
–
–
–
–
–
–
–
–
–
–
–
(0.1)
(0.1)
5.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.8
8.5
(1.6)
–
8.7
3.0
–
(2.8)
(3.0)
0.4
0.1
(2.3)
14.4
(4.1)
–
–
–
32.3
42.6
–
(0.1)
2.8
–
(0.4)
(8.8)
(6.5)
14.4
(4.1)
1.8
8.5
(1.6)
32.3
51.3
3.0
(0.1)
–
(3.0)
–
(8.8)
(8.9)
89.7
127.8
242.9
465.6
127
Other reserves
Share-
based
payment
reserve(D)
£m
Own
shares(E)
£m
Undenominated
capital
reserve(F)
£m
Hedging
reserve(G)
£m
Foreign
currency
translation
reserve(H)
£m
Total
£m
At 30 September 2022
3.8
(4.4)
120.5
8.1
(0.2)
127.8
Total comprehensive income for the financial year
Currency translation adjustment
Translation reserve transferred to Income Statement on disposal of
subsidiary
Cash flow hedge taken to equity
Cash flow hedge transferred to Income Statement
Total recognised income and expense for the financial year
Transactions with equity holders of the Company
contributions and distributions
Employee share-based payments expense
Exercise, lapse or forfeit of share options
Shares acquired by Employee Benefit Trust(A)
Transfer to retained earnings on grant of shares to beneficiaries
of the Employee Benefit Trust(B)
Capital return via share buyback(C)
Total transactions with equity holders of the Company
At 29 September 2023*
–
–
–
–
–
3.6
(3.3)
–
–
–
0.3
4.1
–
–
–
–
–
–
–
(3.9)
1.9
–
(2.0)
(6.4)
–
–
–
–
–
–
–
–
–
0.4
0.4
–
–
(3.1)
(1.5)
(4.6)
–
–
–
–
–
–
(0.5)
(0.6)
–
–
(1.1)
–
–
–
–
–
–
(0.5)
(0.6)
(3.1)
(1.5)
(5.7)
3.6
(3.3)
(3.9)
1.9
0.4
(1.3)
120.9
3.5
(1.3)
120.8
Share-
based
payment
reserve(D)
£m
Own
shares(E)
£m
Undenominated
capital
reserve(F)
£m
Hedging
reserve(G)
£m
Foreign
currency
translation
reserve(H)
£m
Total
£m
At 24 September 2021
3.6
(1.8)
120.4
1.2
(2.0)
121.4
Total comprehensive income for the financial year
Currency translation adjustment
Cash flow hedge taken to equity
Cash flow hedge transferred to Income Statement
Total recognised income and expense for the financial year
Transactions with equity holders of the Company
contributions and distributions
Employee share-based payments expense
Exercise, lapse or forfeit of share options
Shares acquired by Employee Benefit Trust(A)
Transfer to retained earnings on grant of shares to beneficiaries of
the Employee Benefit Trust(B)
Capital return via share buyback(C)
Total transactions with equity holders of the Company
At 30 September 2022*
–
–
–
–
3.0
(2.8)
–
–
–
0.2
3.8
–
–
–
–
–
–
(3.0)
0.4
–
(2.6)
(4.4)
–
–
–
–
–
–
–
–
0.1
0.1
–
8.5
(1.6)
6.9
–
–
–
–
–
–
1.8
–
–
1.8
–
–
–
–
–
–
1.8
8.5
(1.6)
8.7
3.0
(2.8)
(3.0)
0.4
0.1
(2.3)
120.5
8.1
(0.2)
127.8
* The financial year is the 52 week period ended 29 September 2023 with comparatives for the 53 week period ended 30 September 2022.
(A) Pursuant to the terms of the Employee Benefit Trust 5,688,856 shares (2022: 2,180,216) were purchased during the financial year ended 29 September 2023 for a cash
cost of £3.9m (2022: £3.0m). Further details are set out in Note 25.
(B) During the financial year, 1,540,738 (2022: 290,044) shares with a nominal value at the date of transfer of £0.015m (2022: £0.0029m) at a cost of £1.9m (2022: £0.4m)
were transferred to beneficiaries of the Annual Bonus Plan and the Employee Share Incentive Plan. Further details are set out in Note 25.
(C) During the financial year, the Company, Greencore Group plc purchased and subsequently cancelled 33,382,718 Ordinary Shares (2022: 9,728,677) for a total cash cost
of £26.2m (2022: £8.8m) as part of the share buyback programme. Further details are set out in Note 25.
(D) The share-based payment reserve relates to equity settled share-based payments made to employees through the Performance Share Plan, the Annual Bonus Plan, the
ShareSave Scheme, the Employee Share Incentive Plan and the Restricted Share Plan. Further information in relation to these share-based payments schemes is set out in
Note 6.
(E) The amount included as own shares relates to Ordinary Shares in Greencore Group plc which are held in trust. The shares held in trust are granted to beneficiaries of the
Group’s employee share award scheme when the relevant conditions of the scheme are satisfied.
(F) The undenominated capital reserve represents the nominal cost of cancelled shares and the amount transferred to reserves as a result of renominalising the share capital
of Greencore Group plc on conversion to the euro.
(G) The hedging reserve represents the effective portion of gains or losses on hedging instruments from the application of cash flow hedge accounting for which the
underlying hedged transaction is not impacting profit or loss. The cumulative deferred gain or loss on the hedging instrument is reclassified to profit or loss only when
the hedged transaction is no longer expected to occur.
(H) The foreign currency translation reserve reflects the exchange difference arising from the translation of the net investments in foreign operations and on borrowings
and other currency instruments designated as hedges of such investments which are taken to equity. When a foreign operation is sold, exchange differences that are
recorded in equity are recognised in the Group Income Statement as part of the gain or loss on sale.
Strategic Report | Directors’ Report | Financial Statements | Other Information 128 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements
financial year ended 29 September 2023
1. Group Statement of accounting policies
General information
Greencore Group plc (‘the Company’), registered number 170116, together with its subsidiaries (‘the Group’) is a manufacturer of convenience
foods in the UK. The Company is a public limited company incorporated and domiciled in the Republic of Ireland and the Company’s shares
are publicly traded on the London Stock Exchange. The address of its registered office is 2 Northwood Avenue, Northwood Business Park,
Santry, Dublin 9, Ireland, D09 X5N9.
Statement of compliance
The Group Financial Statements of Greencore Group plc have been prepared in accordance with International Financial Reporting Standards
(‘IFRS’) and their interpretations approved by the International Accounting Standards Board (‘IASB’) as adopted by the European Union (‘EU’)
and those parts of the Companies Act 2014, applicable to companies reporting under IFRS.
Basis of preparation
The Group Financial Statements, which are presented in sterling and rounded to the nearest million (unless otherwise stated), have been
prepared on a going concern basis under the historical cost convention, except where assets and liabilities are stated at fair value in
accordance with relevant accounting policies.
The accounting policies applied in the preparation of the Group Financial Statements for the financial year ended 29 September 2023 have
been applied consistently by the Group and have been consistently applied to all years presented, unless otherwise stated.
The Group Financial Statements are prepared to the Friday nearest to 30 September. Accordingly, these Financial Statements are prepared for
the 52-week period ended 29 September 2023 (‘financial year’). Comparatives are for the 53-week period ended 30 September 2022. The
Statement of Financial Positions for 2023 and 2022 have been prepared as at 29 September 2023 and 30 September 2022 respectively.
The loss attributable to equity shareholders dealt with in the Financial Statements of the Parent Company was £5.6m (2022: loss of £4.8m).
In accordance with Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its individual profit and
loss account, which forms part of the approved Financial Statements, to the Annual General Meeting and from filing it with the Registrar of
Companies.
Going concern
The Directors, after making enquiries, have a reasonable expectation that the Group has adequate resources to continue operating as a going
concern for the foreseeable future.
In the current period, the Group continued to operate in a complex trading environment linked to ongoing challenges with inflation.
Accordingly, the Directors have considered a number of scenarios for the next 18 months from the commencement of FY24. These scenarios
consider the potential impact of inflation on consumer spending, along with consideration of under recovery of targets set out under the
Group’s commercial and operational initiatives. The impact on revenue, profit and cashflow are modelled, including the consequential impact
on working capital.
The scenarios assumed by the Group are as follows:
• A base case assuming internally approved budget and strategic plans, which includes amounts for near term climate change related
expenditure;
• A downside scenario which assesses the potential impact of inflation on consumer spending and corresponding impact on volume, along
with under recovery of targets set out under the Group’s commercial and operational initiatives; and
• A severe downside scenario which includes further potential impacts on volume due to the inflationary environment and further under
recovery of targets set out under the Group’s commercial and operational initiatives.
In each scenario, the Group would employ mitigants within its control, which would include a reduction in non-business critical capital
projects and other discretionary cash flow items.
While the Group is in a net current liability position of £193.9m (2022: £128.7m) at 29 September 2023, the Group has retained financial
strength and flexibility, with cash and undrawn committed bank facilities of £327.8m at 29 September 2023 (September 2022: £398.0m).
Subsequent to the financial year end, the Group has refinanced its debt facilities with a new five-year £350m sustainability-linked revolving
credit facility (‘RCF’), maturing in November 2028 with the option to extend for up to a further two years. This new facility replaces the existing
£340m RCF that was due to mature in January 2026. A £45m term loan due to mature in June 2024 was also repaid in full as part of this debt
restructuring.
The Group is satisfied that there is sufficient headroom in the financial covenants under facilities for each scenario.
Based on these scenarios and the resources available to the Group, including the post year end re-financing, the Directors believe the Group
has sufficient liquidity to manage through a range of different cashflow scenarios over the next 18 months from the financial year end date.
Accordingly, the Directors adopt the going concern basis in preparing these Group Financial Statements.
129
Significant accounting judgements and significant sources of estimation uncertainty
The preparation of the Group Financial Statements in accordance with IFRS requires management to make certain estimates, assumptions and
judgements that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates
and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the
circumstances on which the estimate was based or as a result of new information or more experience. Therefore, although these estimates
are based on management’s best estimate of the amount, event or actions, actual results ultimately may differ from those estimates. Such
changes are recognised in the financial year in which the estimate is revised. The Group has considered the impact of climate change on the
Financial Statements in the going concern assessment, as climate related expenditure is recorded in the underlying budget and strategic plan
(page 128). The Group has also considered the impact of climate change on the impairment of non-financial assets (Notes 12 and 13) and as
part of the assumptions underpinning the retirement benefit obligations (Note 24).
Significant accounting judgements
Below are the significant accounting judgements, apart from those involving estimations (which are dealt with separately below), that are
exercised in applying the Group accounting policies. In the prior year, the Group included going concern as a significant judgement. In FY23,
going concern is no longer considered to be a significant judgement for the Group. This is because the Group has continued to improve
performance during FY23, the Group has continued to meet its covenant requirements under banking facility agreements and the uncertainty
that was present in the external environment in the UK has reduced. The Group has continued to unlock further value through the Group’s
restructuring, and commercial and operational efficiency programmes. Therefore, the Group does not consider going concern to be a
significant judgement for FY23.
Accounting for exceptional items (Note 7)
The Group consider that items of income or expense which by virtue of their quantitative scale and/or qualitative nature should be disclosed
separately if the Group Financial Statements are to fairly present the financial position and financial performance of the Group. The Group
label these items collectively as ‘exceptional items’.
Determining which transactions are to be considered exceptional in nature is often a subjective matter. However, circumstances that the
Group believe would give rise to exceptional items for separate disclosure are outlined in the exceptional accounting policy on page 138.
All exceptional items are included on the appropriate Income Statement line item to which they relate. In addition, for clarity, separate
disclosure is made of all items in one column on the face of the Group Income Statement.
Taxation (Note 9)
Provisions for current and deferred taxes require judgement in areas where the treatment of certain items may be the subject of debate with
tax authorities. The Group provide for current and deferred taxes using the method that best predicts the resolution of the uncertainty. The
Group is required to consider the range of possible outcomes for a number of transactions and/or calculations across all the jurisdictions
where the Group is subject to income taxes and to provide for current and deferred taxes accordingly, applying either the ‘expected value
method’ or the ‘most likely method’ for each uncertainty dependent on the method that we expect to better predict the resolution of the
uncertainty in each case. The Group consider this to be a judgemental area, due to the increasing complexity and a period of significant
change in tax legislation worldwide.
Recognition of deferred tax assets requires consideration of the value of those assets and the likelihood that those assets will be utilised in
the foreseeable future. The recognition relies on the availability of sound and relatively detailed forecast information regarding the future
performance of the business which has the legal right to utilise the deferred tax assets. The Group performed its assessment of the recovery
of deferred tax assets at 29 September 2023, taking into account the Group’s actual and historic performance, the impact of tax legislation
enacted at the reporting date and the detailed financial forecasts and budgets for the business covering the periods over which the assets are
expected to be utilised.
Provisions (Note 23)
The recognition of provisions is a key judgement area in the preparation of the Group Financial Statements due to the uncertainty around
the timing or amount for which the provision will be settled. The Group recognises provisions for property dilapidation, remediation or
closure costs and other items such as restructuring or legal provisions. Provisions are recognised when the Group has a legal or constructive
obligation and judgement is required relating to the level of provision required at the reporting date to satisfy the obligation. These liabilities
recognised in the Group Financial Statements require judgement, as to the level of provision to be recognised, based on the information
available to management at the time of determination of the liability. Provisions are reassessed at each reporting date. In FY23, the Group re-
assessed the provisions for remediation with the key judgement being when the provisions would be utilised and remediation completed. This
resulted in an increase to provisions of £1.2m during FY23. The Group holds £9.9m of provisions at 29 September 2023 (2022: £9.9m).
Strategic Report | Directors’ Report | Financial Statements | Other Information 130 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
1. Group Statement of accounting policies continued
Significant sources of estimation uncertainty
The Group’s significant estimates are those with a significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Impairment of goodwill (Note 12)
The Group has capitalised goodwill of £447.3m at 29 September 2023 (2022: £449.4m). Goodwill is required to be tested for impairment at
least annually or more frequently if changes in circumstances or the occurrence of events indicating potential impairment exist. As the Group’s
market capitalisation was lower than the Group’s net assets, the Group has identified the impairment of goodwill as a significant source of
estimation uncertainty.
The Group uses the present value of future cash flows to determine the recoverable amount. In calculating the value in use, management
judgement and estimation is required in forecasting cash flows of Cash Generating Units (‘CGUs’), in determining terminal growth values and
in setting an appropriate discount rate. Sensitivities to changes in assumptions are detailed in Note 12.
Post-retirement benefits (Note 24)
The Group has identified post-retirement benefits as a significant source of estimation uncertainty in the preparation of the Group Financial
Statements. The estimation of, and accounting for, retirement benefit obligations involve assessments made in conjunction with independent
actuaries. These involve estimating the actuarial assumptions including mortality rates of members, increase in pension payments and
inflation-linked increases to certain obligations and discount rates used in estimating the present value of the schemes assets and liabilities.
In FY23, there was a significant change in the Group’s retirement benefit obligations as a result of the completion of the annuity buy-in
transaction and other changes in financial assumptions.
Details of the financial position of the post-retirement benefit schemes and the sensitivity of assumptions are set out in Note 24.
New standards and interpretations
The following changes to IFRS became effective or were adopted by the Group during the financial year but did not result in material changes
to the Group’s Consolidated Financial Statements:
• Amendments to IAS 37 Onerous Contracts – Costs of Fulfilling a Contract
• Annual improvements to IFRS standards 2018 – 2020
• Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use
• Amendments to IFRS 3 Reference to the Conceptual Framework
• Amendments to IAS 12: International Tax Reform – Pillar Two Model Rules
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two legislation is expected to be enacted in Ireland in December
2023 and will come into effect from 1 January 2024. Since the Pillar Two legislation is not effective at the reporting date of 29 September
2023, the Group has no related current tax exposure. The Group applies the exception to recognising and disclosing information about
deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023. Under the
new legislation, groups will be liable to assess their effective tax rate (according to complex new rules) in each jurisdiction that they operate. If
the effective tax rate in any jurisdiction is less than the 15% minimum rate top up taxes will be payable. The Group are not expecting to pay top
up taxes in the period ending in September 2024. The Group will continue to assess its position to estimate any impact.
IFRS 17 Insurance Contracts
New and amended standards and interpretations not yet mandatorily effective
The Group has not applied certain new standards, amendments and interpretations to existing standards which are not yet mandatorily
effective:
•
• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies
• Amendments to IAS 8 Definition of Accounting Estimate
• Amendments to IFRS 16 Lease Liability in Sale and Leaseback Arrangements
• Amendments to IAS 12 Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction
• Amendments to IAS 1 Classification of Liabilities as Current or Non-current*
• Amendments to IAS 1 Non-current Liabilities with Covenants*
• Amendments to IAS 21 Lack of Exchangeability*
• Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements*
* The above standards/amendments have not yet been endorsed by the EU.
•
•
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
IFRS S2 Climate-related Disclosures
The International Sustainability Standards Board (‘ISSB’) has issued its inaugural standards IFRS S1 and IFRS S2 which will bring in a new era of
sustainability-related disclosures. The Group is reviewing the impact of IFRS S1 and IFRS S2 on future Financial Statements.
131
Basis of consolidation
The Group Financial Statements comprise the Financial Statements of the parent undertaking and its subsidiary undertakings.
Subsidiaries
Subsidiary undertakings are included in the Group Financial Statements from the date on which control over the operating and financial
policies is obtained and cease to be consolidated from the date on which control is transferred out of the Group. The Group controls an entity
when it has power over the entity, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The Group reassess whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the elements of control. All intra-Group transactions, balances and unrealised gains on transactions
between Group undertakings are eliminated on consolidation. Unrealised losses are also eliminated, except where they provide evidence of
impairment.
Revenue recognition
The Group’s revenue is primarily derived from the manufacture of convenience food products and all revenue relates to revenue from
contracts with customers. The Group’s customer contracts typically include one performance obligation, with revenue recognised when the
performance obligation is satisfied.
Revenue is measured based on the consideration specified in a contract with a customer and represents the fair value of the sale of goods and
rendering of services to external customers, net of value added tax and rebates in the ordinary course of the Group’s activities. Many of the
Group’s revenue contracts include an element of variable consideration, such as trade discounts, namely in the form of rebate arrangements
or other incentives to customers. The arrangements can take the form of volume and fixed rebates, marketing fund contributions,
promotional fund contributions or lump sum incentives. The Group recognises revenue, net of such incentives in the period in which the
arrangement applies, only when it is highly probable a significant reversal in the cumulative amount of revenue will not occur. Volume-based
rebates are calculated on the Group’s estimate of rebates expected to be paid to customers using the ‘most likely amount’ in line with IFRS 15
Revenue from Contracts with Customers requirements, whereas fixed rebates are accounted for as a reduction in revenue over the life of the
contract.
Revenue is recognised at a point in time, when control of the goods or services are transferred to the customer, which is determined to be
either when the goods are dispatched or received by the customer, depending on individual contracts.
Supplier rebates
The Group enters into rebate arrangements with its suppliers, which are volume related. These supplier rebates received are recognised as a
deduction from cost of sales, based on the entitlement that has been earned up to the reporting date, for each relevant supplier arrangement.
Property, plant and equipment
Freehold land and capital work in progress are stated at cost less impairment, if any. All other property, plant and equipment are shown at cost
less depreciation and any impairments. The cost of all property, plant and equipment comprises its purchase price and any directly attributable
costs.
Depreciation is provided so as to write off the cost less residual value of each item of property, plant and equipment during its expected useful
life using the straight-line method over the following periods:
• Freehold and long leasehold buildings 25–50 years
• Plant and machinery
• Fixtures and fittings
3–25 years
3–25 years
Useful lives and residual values are reassessed annually.
Subsequent costs incurred relating to specific assets are included in an asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other costs are charged to the profit or loss during the financial period in which they are incurred.
The carrying amounts of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that
the carrying amounts may not be recoverable. When the carrying amount exceeds the estimated recoverable amount, the assets are written
down to their recoverable amount.
The recoverable amount of property, plant and equipment is the greater of fair value less costs of disposal and value in use. In assessing value
in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. Impairment losses are recognised in profit or loss.
Strategic Report | Directors’ Report | Financial Statements | Other Information 132 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
1. Group Statement of accounting policies continued
Property, plant and equipment continued
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in
prior years. Such reversal is recognised in profit or loss. Following the recognition or reversal of an impairment loss, the depreciation charge
applicable to the asset is adjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual value, over
the remaining useful life.
Gains or losses on the disposal of property, plant and equipment represent the difference between the net proceeds and the carrying value at
the date of sale.
Leases
The Group leases various properties, motor vehicles and equipment. Rental contracts are typically made for fixed periods but may have
extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A right-of-use asset and lease liability are recognised
at commencement for contracts containing a lease, with the exception of leases with a term of 12 months or less or leases where the
underlying asset is of low value. For those leases, the Group recognises the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another more systematic basis is more representative of the time pattern in which the economic benefits
from the leased assets are consumed by the Group.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the interest rate implicit in the lease or if this rate cannot be readily determined, the incremental borrowing rate. Lease payments include
fixed payments, payments for an optional renewal period and termination option payments. The lease term is the non-cancellable period for
which the Group have the right to use an underlying asset, together with (i) periods covered by an option to extend the lease if the Group is
reasonably certain to exercise that option, and (ii) periods covered by an option to terminate the lease if the Group is reasonably certain not to
exercise that option. The Group has applied judgement to determine the lease term for lease contracts that include renewal options and break
clauses.
Following initial recognition, the lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future minimum lease payments or when the Group changes its assessment of whether it is reasonably certain to exercise an
option within a contract.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the asset
less any lease incentives received. After lease commencement, the Group measures right-of-use assets using a cost model, reflecting cost less
accumulated depreciation and impairment. The right-of-use asset is depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of lease term.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise
of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in
which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate unless the lease
payments change is due to a change in a floating interest rate, in which case a revised discount rate is used; or
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the
effective date of the modification.
Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree,
and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree
and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a
bargain purchase gain.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. On acquisition, goodwill is allocated
to CGUs expected to benefit from the combination’s synergies. Goodwill is tested annually for impairment or more frequently if events or
changes in circumstances indicate that the carrying value may be impaired. Any impairment is recognised immediately in profit or loss.
133
Acquisition-related intangibles
An intangible asset, which is an identifiable non-monetary asset without physical substance, is capitalised separately from goodwill as part
of a business combination to the extent that it is probable that the expected future economic benefits attributable to the asset will accrue
to the Group and that its fair value can be measured reliably. The asset is determined to be identifiable when it is separable (i.e. capable of
being divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset
or liability) or when it arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the
Group or from other rights and obligations.
Subsequent to initial recognition, the acquisition-related intangible assets acquired as part of a business combination, are carried at cost
less any accumulated amortisation and any accumulated impairment losses. The carrying amounts of intangible assets with finite lives are
reviewed for indicators of impairment at each reporting date and are subject to impairment testing when events or changes in circumstances
indicate that the carrying values may not be recoverable. Any impairment charge is taken to profit or loss.
The amortisation of intangible assets is calculated to write off the carrying amount of intangible assets with finite lives over their useful lives on
a straight-line basis on the assumption of zero residual value. Customer-related intangible assets are amortised over periods ranging from one
to seven years.
The useful life used to amortise intangible assets relates to the future performance of the assets acquired and management’s estimate of the
period over which economic benefit will be derived from the asset. The remaining useful life of intangible assets with finite lives are reviewed
at the end of each reporting period and revised where appropriate to reflect the period over which the Group will receive the economic
benefit from use.
Computer software
Costs incurred on the acquisition of computer software and software licences are capitalised. Other costs directly associated with developing
and upgrading computer software programs are capitalised once the recognition criteria set out in IAS 38 Intangible Assets are met. There is a
full assessment carried out to ensure the computer software does not qualify as software as a service and should be expensed to the profit or
loss in the financial year.
Following initial recognition, computer software is carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation is charged to profit or loss during its expected useful life using the straight-line method over the following periods:
Computer software 3–7 years
The carrying amount of computer software assets are reviewed for indicators of impairment at each reporting date and are subject to
impairment testing when events or changes in circumstances indicate the carrying value may not be recoverable.
Investment property
Investment property is shown at cost less depreciation and any impairment. The cost of investment property comprises its purchase price and
any costs directly attributable to bringing it into working condition for its intended use. Investment property is depreciated so as to write off
the cost, less residual value, on a straight-line basis over the expected life of each property. Freehold land is not depreciated.
An impairment to investment property is recognised when the carrying value of the asset exceeds the recoverable value. The recoverable
value is determined as the higher of the fair value less costs of disposal and the assets value in use. Fair value is determined by the Directors,
assisted by external property valuers.
Rental income arising on investment property is accounted for as an operating lease in line with the requirements of IFRS 16 Leases and is
recognised within other operating income.
In relation to the recognition of income on the disposal of property, income is recognised when there is an unconditional exchange of
contracts, or when all necessary terms and conditions have been fulfilled.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in
prior years. Such reversal is recognised in profit or loss.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is calculated based on first-in, first-out or weighted average as
appropriate. Cost includes raw materials, direct labour expenses and related production and other overheads net of supplier rebates.
Net realisable value is the estimated selling price, in the ordinary course of business, less all costs necessary to make the sale.
Strategic Report | Directors’ Report | Financial Statements | Other Information 134 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
1. Group Statement of accounting policies continued
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the
class of obligation as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligation may be small.
Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when
the reimbursement is virtually certain. The expense relating to any provision is recognised in the Group Income Statement net of any
reimbursement.
A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events, or where the amount of
the obligation cannot be measured with reasonable reliability. Contingent assets are not recognised but are disclosed where an inflow of
economic benefits is probable.
Finance income and finance costs
Finance income comprises interest income on funds invested and the unwind of discount on assets. Interest income is recognised in profit or
loss as it accrues, using the effective interest method.
Finance costs comprises interest expense on borrowings, negative interest, if any, on bank deposits, unwind of discount on liabilities, interest
on lease obligations, interest on the net defined benefit pension scheme liabilities, changes in fair value of hedging instruments and other
derivatives that are recognised in profit or loss, foreign exchange on inter-company balances and external balances where hedge accounting
is not applied. All borrowing costs are recognised in profit or loss using the effective interest method.
Financial instruments
On initial recognition, a financial asset is classified as measured at amortised cost, or fair value through other comprehensive income
(‘FVOCI’) or fair value through profit or loss (‘FVPL’). The classification is based on the business model for managing the financial asset and the
contractual terms of the cashflows. Reclassification of financial assets is required only when the business model for managing those assets
changes.
Financial assets are derecognised when the Group’s contractual rights to the cashflows from the financial assets expire, are extinguished or
are transferred to a third party.
Financial liabilities are classified as measured at amortised cost or FVPL. Financial liabilities are derecognised when the Group’s obligations
specified in the contracts expire, are discharged or cancelled. When an existing financial liability is replaced by another from the same lender
on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated
as a derecognition of the original liability, the recognition of a new liability which has the result that the difference in the respective carrying
amounts is recognised, together with any resulting costs.
Cash and cash equivalents and bank overdrafts
Cash and cash equivalents are initially recognised at fair value and subsequently carried at amortised cost. Cash and cash equivalents include
cash in hand, deposits held on call with banks and other short-term highly liquid investments that are readily convertible to known amounts of
cash. These are subject to insignificant risk of changes in value and have an original maturity of three months or less.
The Group operates a cash pooling facility which allows subsidiaries of the Group to drawdown on cash from the pool, where the Group
has sufficient cash balances. The cash pooling arrangement operated by the Group includes a legal right of offset, however, it does not meet
the requirements for offsetting in accordance with IAS 32 Financial Instruments: Presentation and as such bank overdrafts are presented
separately to cash on the Group Statement of Financial Position.
Trade and other receivables
Trade and other receivables are initially recognised at transaction price and subsequently carried at amortised cost, net of allowance for
expected credit loss.
Trade receivables are derecognised when the Group no longer controls the contractual rights to those receivables. This is normally the case
when the asset is sold or the rights to receive cash flows from the asset have expired, and the Group has not retained substantially all the credit
risks and control of the receivable has transferred.
Trade and other payables
Trade and other payables are initially recorded at fair value and subsequently at amortised cost.
Borrowings
All loans and borrowings are initially recognised at fair value less any directly attributable transaction costs. After initial recognition, loans and
borrowings are subsequently measured at amortised cost using the effective interest method.
135
Borrowings are derecognised when the Group’s obligations specified in the contracts expire, are discharged or cancelled.
When the Group modifies the terms of its debt facilities, it determines if the modification is a substantial or non-substantial modification.
A substantial change is attributable to a change in contractual cashflows of more than 10%, resulting in a derecognition of the existing facilities
and recognition of a new facility. A non-substantial modification to facilities results in the recognition of a modification gain or loss in the
Income Statement. A modification gain or loss is determined by recalculating the gross carrying value of the borrowings by discounting
the new contractual cash flows using the original effective interest rate. The transaction cost associated with modifying the terms of the
borrowings are spread forward by the adjusted effective interest rate.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months after the reporting date. Accrued interest is recorded in accruals within current liabilities.
Derivative financial instruments
The activities of the Group expose it to the financial risks of changes in foreign exchange rates and interest rates. The Group uses derivative
financial instruments, such as forward foreign exchange contracts, cross-currency swaps and interest rate swap agreements, to hedge these
exposures.
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured at fair value.
Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivative instruments which are
held for trading and are not designated as effective hedging instruments are classified as a current asset or liability (as appropriate) regardless
of maturity if the Group expects that they may be settled within 12 months of the reporting date. All other derivative instruments that are
not designated as effective hedging instruments are classified by reference to their maturity date. The full fair value of a hedging derivative
is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and as a current asset or
liability if the maturity of the hedged item is less than 12 months.
The fair value of derivative instruments is determined by using valuation techniques. The Group uses its judgement to select the most
appropriate valuation methods and makes assumptions that are mainly based on observable market conditions existing at the reporting date.
For those derivatives designated as hedges and for which hedge accounting is sought, the hedging relationship is documented at its inception.
This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how hedge
effectiveness will be measured throughout its duration. Such hedges are expected at inception to be highly effective in offsetting changes in
fair values or cash flows of hedged items.
For the purposes of hedge accounting, derivatives are classified as:
• Fair value hedges, when hedging the exposure of changes in the fair value of a recognised asset or liability; or
• Cash flow hedges, when hedging the exposure to variability in cash flows that are either attributable to a particular risk associated with a
recognised asset or liability, or a highly probable forecast transaction; or
• Net investment hedges, when hedging the exposure to foreign currency differences between the functional currency of a foreign
operation and the functional currency of the parent.
Any gains or losses arising from changes in the fair value of all other derivatives which are classified as held for trading are taken to the income
statement and charged to finance income or expense. These may arise from derivatives for which hedge accounting is not applied because
they are not designated as hedging instruments. The Group does not use derivatives for trading or speculative purposes.
The hedges that the Group has in place are cash flow hedges and the treatment is set out below:
Cash flow hedge
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly
probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognised within equity in the
hedging reserve, with the ineffective portion being reported in the income statement as finance income or finance costs. When a highly
probable forecast transaction results in the recognition of a non-financial asset or liability, the cumulative gain or loss is removed from the
hedging reserve in equity and included in the initial measurement of the non-financial asset or liability. Otherwise, the associated gains and
losses that had previously been recognised within equity in the hedging reserve are transferred to the income statement as the cash flows of
the hedged item impact profit or loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge
accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised within equity in the hedging reserve is
kept in the hedging reserve until the forecast transaction occurs. If a hedged transaction is no longer anticipated to occur, the net cumulative
gain or loss recognised within equity in the hedging reserve is transferred immediately to the income statement as finance costs.
Strategic Report | Directors’ Report | Financial Statements | Other Information 136 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
1. Group Statement of accounting policies continued
Segmental reporting
The operating segment, Convenience Foods UK and Ireland, is reported in a manner consistent with the internal management structure of the
Group and the internal financial information provided to the Group’s Chief Operating Decision Maker who is responsible for making strategic
decisions, allocating resources, monitoring and assessing the performance of the segment. The Group reports segmental information by
product categories being, food to go categories and other convenience categories and geographical area. Note 2 sets out the operating and
reportable segment of the Group.
Taxation
The charge/credit for the financial year comprises current and deferred tax. Tax is recognised in profit or loss except to the extent that it relates
to items recognised in the Group Statement of Comprehensive Income or directly in equity, in which case the tax is also recognised in the
Group Statement of Comprehensive Income or directly in equity, respectively.
Current tax payable represents the expected tax payable on the taxable income for the financial year, using tax rates and tax laws enacted or
substantively enacted at the reporting date, along with any adjustment to tax payable in respect of previous years.
The Group provides in full for deferred tax assets and liabilities (using the liability method), arising from temporary differences between the tax
base of assets and liabilities and their carrying amounts in the Group Financial Statements except where they arise from the initial recognition
of goodwill or from the initial recognition of an asset or liability that at the date of initial recognition does not affect accounting or taxable
profit or loss on a transaction that is not a business combination. Such differences result in an obligation to pay more tax or a right to pay less
tax in future periods. A deferred tax asset is only recognised where it is probable that future taxable profits will be available against which the
temporary differences giving rise to the asset can be utilised.
Deferred tax assets and liabilities are not subject to discounting and are measured at the tax rates that are enacted or substantively enacted at
the reporting date.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
The Group is subject to income taxes in a number of jurisdictions. Judgement is required in determining the Group’s provision for income
taxes.
There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
The Group recognises liabilities for tax uncertainties based on estimates of whether additional taxes will be due. Where the final tax outcome
of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made. Once it has been concluded that a liability needs to be recognised, the liability
is measured based on either (i) the most likely amount or (ii) the expected value depending on which method the Group expects to better
predict the resolution of the uncertainty. The assessment is based on the judgement of tax professionals within the Group supported by
previous experience in respect of such activities and in certain cases based on specialist independent advice.
Employee benefits
Defined contribution pension plans
A defined contribution pension plan is a plan under which the Group pays fixed contributions into a separate defined contribution scheme.
Obligations for contributions to defined contribution pension plans are recognised as an expense within profit or loss as employee service is
received.
Defined benefit pension plans
All of the legacy defined benefit pension schemes have been closed to future accrual since 31 December 2009. The cost of providing
benefits under the Group’s defined benefit pension plans is determined separately for each plan, using the projected unit credit method,
by professionally qualified actuaries and arrived at using actuarial assumptions based on market expectations at the reporting date. These
valuations attribute entitlement benefits to the current and prior periods to determine current service costs and the present value of defined
benefit pension obligations.
Remeasurements, comprising of actuarial gains and losses and the return on plan assets (excluding net interest), are recognised immediately
in the Group Statement of Financial Position with a corresponding debit or credit to retained earnings through the Group Statement of
Comprehensive Income in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
• The date of the plan amendment or curtailment; and
• The date that the Group recognises restructuring-related costs.
Net interest is calculated by applying the discount rate to the net defined benefit pension liability or asset.
137
When a settlement (eliminating all obligations for defined benefits already accrued) or a curtailment (reducing future obligations as a result
of a material reduction in the scheme membership or a reduction in future entitlement) occurs, the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or loss is recognised in profit or loss during the period in which the
settlement or curtailment occurs.
The Group seeks ways to reduce its liabilities through various restructuring activities. When a qualifying insurance policy is purchased for the
scheme liabilities, this is treated as a plan asset and the fair value of the insurance policy is determined to be the present value of the related
obligations. A settlement will only arise in winding up a scheme, when the Group enters into a transaction that eliminates all further legal or
constructive obligations for part or all the benefits provided under a defined benefit plan.
The defined benefit pension asset or liability in the Group Statement of Financial Position comprises the total, for each plan, of the present
value of the defined benefit pension obligation (using a discount rate based on high-quality corporate bonds) less the fair value of plan assets
out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities
is the published bid price. For unquoted securities, the most recent publicly available information is used to calculate the fair value, which
may differ from the financial year end date. The value of a net pension benefit asset is the present value of any economic benefit the Group
reasonably expects to recover by way of refund of surplus from the plan at the end of the plan’s life or reduction in future contributions to the
plan.
Employee share-based payments
The Group grants equity settled share-based payments to employees (through the Performance Share Plan, the Annual Bonus Plan, Employee
ShareSave Scheme and Employee Share Incentive Plan). The fair value of these is determined at the date of grant and is expensed to profit or
loss with a corresponding increase in equity on a straight-line basis over the vesting period. The fair value is determined using an appropriate
valuation model, as measured at the date of grant, excluding the impact of any non-market conditions. Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest. At each reporting date, the Group revises its estimates of
the number of options or awards that are expected to vest, recognising any adjustment in profit or loss, with a corresponding adjustment to
equity.
To the extent that the Group receives a tax deduction relating to services paid for by means of share awards or options, deferred tax is
provided on the basis of the difference between the market price of the underlying equity as at the date of grant and the exercise price of the
option.
As a result, the deferred tax impact of share options will not directly correlate with the expense reported in profit or loss.
To the extent that the deductible difference exceeds the cumulative charge to the Group Income Statement, it is recorded in equity. When
the exercise of share options results in the issuance of shares, the proceeds received are credited to the share capital and share premium
accounts.
Foreign currency
Functional and presentational currency
The individual financial statements of each Group entity are measured in the currency of the primary economic environment in which the
entity operates (the functional currency). The Group Financial Statements are presented in sterling, which is also the Company’s functional
and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at financial year end exchange
rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the Group Income Statement, except when
deferred in equity as qualifying cash flow hedges.
Foreign operations
The income statement and statement of financial position of Group entities that have a functional currency different from the presentation
currency of the Company are translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing rate at the reporting date;
•
Income and expense items are translated at the average exchange rates for the financial year, unless exchange rates fluctuate significantly
during that period, in which case the exchange rates at the date of transactions are used; and
• All resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations and on long-term borrowings,
are taken to equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the Group Income
Statement as part of the gain or loss on sale.
Research and development
Expenditure on research and development is recognised as an expense in the period in which it is incurred. An asset is recognised only when
all the conditions set out in IAS 38 Intangible Assets are met.
Strategic Report | Directors’ Report | Financial Statements | Other Information 138 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
1. Group Statement of accounting policies continued
Exceptional items
The Group has adopted an income statement format that seeks to highlight exceptional items within the Group’s results for the financial year.
Judgement is used by the Group in assessing the particular items which by virtue of their quantitative scale and/or qualitative nature should
be disclosed as exceptional items. Such items may include, but are not limited to, significant reorganisation programmes, profits or losses
on termination of operations, significant impairments of assets, transaction and integration costs related to acquisition activity, transaction
costs related to disposal activity and litigation costs and settlement. Exceptional items are included in a separate column within the Income
Statement caption to which they relate and are separately disclosed in the Notes to the Group Financial Statements. Where an item that has
been classified as exceptional spans more than one reporting period such as a multi-year restructuring programme, it will also be presented as
exceptional in the following period for consistency of presentation. The Group separately presents the cash paid for exceptional items in the
Group Statement of Cash Flows and the tax impact in the exceptional note disclosure.
Share capital
Ordinary Shares
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are taken as a deduction
from equity, net of tax, from the proceeds.
Own Share Reserve
The Own Share Reserve relates to Ordinary Shares in the Company, which are held in trust. The shares held in trust are granted to the
beneficiaries of the Group’s employee share award scheme when the relevant conditions of the scheme are satisfied, with a transfer between
the own share reserve and retained earnings when the transfer occurs.
2. Segment information
Convenience Foods UK and Ireland is the Group’s operating segment, which represents its reporting segment. This reflects the Group’s
organisational structure and the nature of the financial information reported to and assessed by the Chief Operating Decision Maker (‘CODM’)
as defined by IFRS 8 Operating Segments. The CODM has been identified as the Group’s Board of Directors.
The segment incorporates many UK convenience food categories including sandwiches, salads, sushi, chilled snacking, chilled ready meals,
chilled soups and sauces, chilled quiche, ambient sauces and pickles, frozen Yorkshire Puddings, as well as the Irish Ingredients trading
business.
On 29 September 2023, the Group disposed of the Irish ingredients trading business, Trilby Trading Limited. The Irish ingredients business is
included in the segment information up to the date of its disposal and contributed revenue of £80.1m and profit for the financial year of £2.6m
for FY23. The Group will continue to have one operating segment going forward as the disposal of the Irish Ingredients business has not
resulted in a change in operating segments, however going forward the segment will be disclosed as ‘Convenience Foods UK’.
Revenue
Group operating profit before exceptional items and amortisation of acquisition-related intangible assets
Amortisation of acquisition-related intangible assets
Group operating profit (pre-exceptional)
Finance income
Finance costs
Exceptional items
Taxation
Profit for the financial year
Convenience Foods
UK & Ireland
2023
£m
2022
£m
1,913.7
1,739.6
76.3
(3.6)
72.7
0.7
(21.5)
(6.7)
(9.3)
35.9
72.2
(3.6)
68.6
0.2
(12.5)
(16.5)
(7.5)
32.3
The following table disaggregates revenue by product categories in the Convenience Foods UK and Ireland reporting segment. The Group’s
revenue by geography is included on page 139. All income in the Group has been recognised at a point in time and not over time.
Revenue
Food to go categories
Other convenience categories
Total revenue for Convenience Foods UK and Ireland
2023
£m
2022
£m
1,252.6
661.1
1,913.7
1,161.3
578.3
1,739.6
Food to go categories includes sandwiches, salads, sushi and chilled snacking while the other convenience categories include chilled ready
meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, frozen Yorkshire Puddings, as well as the Irish Ingredients trading
business, which was disposed of on 29 September 2023.
139
Revenue earned individually from three customers in Convenience Foods UK and Ireland of £348.3m, £280.7m and £274.8m respectively
represents more than 10% of the Group’s revenue (2022: Revenue earned individually from three customers in Convenience Foods UK and
Ireland of £316.0m, £261.0m and £196.3m respectively represents more than 10% of the Group’s revenue).
Segment assets and liabilities
All assets and liabilities are allocated to the Convenience Foods UK and Ireland segment. As such, an analysis of assets and liabilities has not
been included in this disclosure.
Other segment information
Capital additions*
Right-of-use asset additions
Depreciation of property plant and equipment and right of use assets
Amortisation of computer software and other intangibles
Amortisation of acquisition-related intangible assets – Customer related
Non-current assets (excluding derivative financial instruments, retirement benefit assets
Convenience Foods
UK & Ireland
2023
£m
37.8
13.3
53.8
2.7
3.6
2022
£m
50.4
6.8
51.6
3.1
3.6
822.3
835.3
and deferred tax assets)
Geographic analysis
Revenue
Capital additions*
Right-of-use asset additions
Ireland
2023
£m
80.1
–
0.3
2022
£m
UK
2023
£m
Convenience Foods
UK & Ireland
2022
£m
2023
£m
2022
£m
92.0
1,833.6
1,647.6
1,913.7
1,739.6
–
–
37.8
13.0
50.4
6.8
37.8
13.3
50.4
6.8
Non-current assets (excluding derivative financial instruments,
retirement benefit assets and deferred tax assets
5.2
6.6
817.1
828.7
822.3
835.3
* This denotes capital additions for property, plant and equipment, and software and other intangibles.
3. Operating costs before acquisition-related amortisation
Employee costs
Factory overheads and utility costs
Distribution costs
Other administrative costs**
Professional fees
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of computer software and other intangible assets
Lease rentals charge for low value and short-term leases
Research and development costs
Impairment of property, plant and equipment
Other operating costs
Rental income from investment properties
Other operating income
Total operating costs before acquisition-related amortisation and exceptional items
Exceptional items (Note 7)
Total operating costs before acquisition-related amortisation
** Other administrative costs include insurance, IT and sundry administrative expenses.
2023
£m
224.6
76.8
66.2
37.6
11.5
37.5
16.3
2.7
6.4
6.7
3.0
2.8
(0.1)
(0.6)
491.4
6.7
498.1
2022
£m
209.4
63.2
65.3
30.1
10.1
36.0
15.6
3.1
5.6
8.9
0.9
3.2
(0.1)
(1.7)
449.6
16.5
466.1
In the prior financial year, the Group experienced an IT security incident that resulted in a net expense recognised in other operating costs of
£1.9m.
Strategic Report | Directors’ Report | Financial Statements | Other Information 140 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
4. Result for the financial year
The result for the Group for the financial year has been arrived at after charging the following amounts:
Directors’ remuneration
Emoluments and fees
Pension costs – defined contribution plans
Gain on share awards under short term incentive schemes
Compensation for loss of office
Total
2023
£m
2.4
0.1
0.3
0.4
3.2
2022
£m
2.0
0.1
0.1
–
2.2
During the current financial year, there were amounts accruing for two of the Directors under defined contribution pension schemes
(2022: four).
2023
£000
2022
£000
Auditor’s remuneration
Fees charged by the statutory audit firm:
Audit of the Group and subsidiaries financial statements
Audit of the Company financial statements
Tax advisory services
Other assurance services
Non-audit services
Total
882
47
–
25
–
954
5. Employment
The average monthly number of persons (including Executive Directors) employed by the Group during the financial year was:
Production
Distribution
Administration
The staff costs for the financial year for the above employees were:
Wages and salaries
Social insurance costs
Employee share-based payment expense (Note 6)
Termination costs
Pension costs – defined contribution plans (Note 24)
Legacy defined benefit interest cost (Note 24)
2023
Number
9,890
1,553
2,559
14,002
2023
£m
398.6
35.6
3.6
6.2
15.5
459.5
1.2
460.7
797
42
–
25
–
864
2022
Number
9,615
1,544
2,732
13,891
2022
£m
380.9
35.9
3.0
4.8
14.1
438.7
1.1
439.8
Total staff costs recognised in the Group profit or loss were £459.7m (2022: £437.5m) while £1.0m of staff costs were capitalised during the
financial year (2022: £2.3m).
Actuarial (loss)/gain on Group legacy defined benefit schemes recognised in the Group Statement of Other Comprehensive Income:
Return on plan assets (Note 24)
Actuarial gain arising on scheme liabilities (Note 24)
Total (loss)/gain taken directly to equity
2023
£m
(36.0)
26.8
(9.2)
2022
£m
(141.9)
156.3
14.4
141
6. Share-based payments
The Group operates a number of employee share award schemes which are equity settled share-based payments. A recognised valuation
methodology is employed to determine the fair value of awards granted as set out in IFRS 2 Share-based payments is described in the
following sections for each share scheme. The charge incurred relating to these awards is recognised within operating costs, unless specified
as an exceptional item. Details of each of the employee share schemes operated by the Group are set out below.
Annual Bonus Plan
Members of the Group Executive team and certain senior management participate in the Annual Bonus Plan as outlined in the Report on
Directors’ Remuneration. In accordance with this plan, a deferred share award equal to a proportion of the cash bonus is awarded to the
participating executives. The number of shares is calculated at market value on the date of allocation, to be held by a Trustee for the benefit of
individual participants without any additional performance conditions other than three years of service. The shares vest after three years but
are forfeit should an executive voluntarily leave the Group within the three-year time period, subject to normal ‘good leaver’ provisions. The
charge recognised in the Group Income Statement was £0.9m (2022: £0.5m) with £0.6m (2022: £0.2m) being recognised within operating
costs and £0.3m (2022: £0.3m) being recognised within exceptional items.
The share price, for awards granted in December 2022 was £0.68 (December 2021: £1.29).
On 1 December 2022 and 1 December 2021, 766,481 and 862,426 awards, respectively, were granted to members of the Group Executive
team and certain senior management of the Group under the Annual Bonus Plan.
The following table illustrates the number of, and movements in, share awards during the financial year under the plan:
At beginning of financial year
Granted
Vested
Forfeited
At end of financial year
Exercisable at end of financial year
2023
Number
outstanding
1,319,090
766,481
(1,491,539)
–
2022
Number
outstanding
942,200
862,426
(264,968)
(220,568)
594,032
1,319,090
–
426,857
Awards will be granted to members of the Group Executive team and certain senior management of the Group under the Annual Bonus
Plan in respect of the financial year ended 29 September 2023. A charge amounting to £0.1m (2022: £0.05m) relating to awards to Executive
Directors and £0.1m (2022: £0.1m) relating to awards to other members of the Group Executive Team and certain senior management has
been included in the Group Income Statement in respect of the estimated 2023 charge. The total fair value of the awards will be taken as a
charge to the Group Income Statement over the vesting period of the awards.
Performance Share Plan
Certain employees participate in a long-term incentive scheme, the Performance Share Plan. In accordance with the scheme rules,
participants are awarded an allotment of shares which will vest over three years subject to vesting conditions based on growth in Adjusted
Earnings per Share, Return on Invested Capital and relative Total Shareholder Return (‘TSR’). An additional two-year future service period will
apply to Executive Directors’ vested shares before they are released.
In January 2021, the Group introduced different vesting conditions for awards granted which included an absolute TSR and a relative TSR
component. In addition, the awards granted have graded vesting periods of one, two and three years with a two-year and one-year holding
period for awards vesting within three years.
The number of share awards granted is calculated based on the market value on the date of allocation. Share awards are forfeited should
an executive voluntarily leave the Group prior to the vesting date, subject to normal ‘good leaver’ provisions. The fair value of the award has
attributed a value to each vesting condition. The relative TSR is fair valued using a Monte Carlo simulation as described further in this note.
A charge amounting to £0.6m (2022: £0.9m) was included in the Group Income Statement in the financial year ended 29 September 2023
relating to these awards for all Performance Share Plan awards granted from December 2019 onwards.
The following table illustrates the number of, and movements in, share awards during the financial year under the plan:
At beginning of financial year
Granted
Expired
Forfeited
At end of financial year
Exercisable at end of financial year
2023
Number
outstanding
6,089,094
8,749,839
(1,642,783)
(2,443,628)
2022
Number
outstanding
7,707,473
3,048,764
(2,575,145)
(2,091,998)
10,752,522
6,089,094
–
–
Strategic Report | Directors’ Report | Financial Statements | Other Information 142 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
6. Share-based payments continued
ShareSave Schemes
The Group operates savings-related share option schemes in both the UK and Ireland. Options are granted at a discount of between 20% and
25% of the market price at the date of invitation over three-year savings contracts and awards are exercisable during the six-month period
following completion of the savings contract. The charge recognised in the Group Income Statement in respect of these awards was £1.1m
(2022: £1.2m). Grant date fair value was arrived at by applying a trinomial model, which is a lattice option-pricing model.
During the financial year ended 29 September 2023, ShareSave Scheme awards were granted over 12,209,146 shares in the UK only, which
will ordinarily be exercisable at an exercise price of £0.63 per share, during the period 1 September 2026 to 28 February 2027. The weighted
average fair value of share awards granted during the financial year ended 29 September 2023 was £0.14.
During the financial year ended 30 September 2022, ShareSave Scheme awards were granted over 6,231,802 shares in the UK only, which
will ordinarily be exercisable at an exercise price of £0.91 per share, during the period 1 September 2025 to 28 February 2026. The weighted
average fair value of share awards granted during the financial year ended 30 September 2022 was £0.11.
Number and weighted average exercise price for the UK ShareSave Scheme (expressed in sterling)
The following table sets out the number and weighted average exercise prices (expressed in sterling) of, and movements in, share options
during the financial year under the UK ShareSave Scheme:
At beginning of financial year
Granted
Exercised
Expired
Forfeited
At end of financial year
Exercisable at end of financial year
Range of exercise prices for the UK ShareSave Scheme (expressed in sterling)
2023
2022
Number
outstanding
13,506,159
12,209,146
–
(653,706)
(7,773,072)
17,288,527
1,713,484
Weighted
average
exercise price
£
Weighted
average
Number
outstanding
exercise price
£
1.04
0.63
–
1.56
0.99
0.75
1.14
14,253,181
6,231,802
(11,853)
(1,261,628)
(5,705,343)
13,506,159
542,545
1.16
0.91
1.14
1.42
1.12
1.04
1.66
At 29 September 2023
£0.01–£1.00
£1.01–£2.00
At 30 September 2022
£0.01–£1.00
£1.01–£2.00
Number
outstanding
14,053,982
3,234,545
17,288,527
5,926,561
7,579,598
13,506,159
Weighted
average
contract life
years
Weighted
average
exercise price
£
3.13
0.74
2.68
3.27
1.63
3.25
0.67
1.10
0.75
0.91
1.14
1.04
Number
exercisable
–
1,713,484
1,713,484
–
542,545
542,545
Weighted
average
exercise price
£
–
1.14
1.14
–
1.66
1.66
Number and weighted average exercise prices for the Irish ShareSave Scheme (expressed in euro)
The following table sets out the number and weighted average exercise prices (expressed in euro) of, and movements in, share options during
the financial year under the Irish ShareSave Scheme:
At beginning of financial year
Exercised
Expired
Forfeited
At end of financial year
Exercisable at end of financial year
2023
2022
Number
outstanding
81,376
–
(10,285)
(9,075)
62,016
62,016
Weighted
average
exercise price
€
Weighted
average
Number
outstanding
exercise price
€
1.26
–
1.75
1.19
1.19
1.19
147,996
(6,722)
(28,805)
(31,093)
81,376
10,285
1.30
1.19
1.57
1.19
1.26
1.75
143
Range of exercise prices for the Irish ShareSave Scheme (expressed in euro)
At 29 September 2023
€1.01–€2.00
At 30 September 2022
€1.01–€2.00
Number
outstanding
Weighted
average
contract life
years
Weighted
average
exercise price
€
Number
exercisable
Weighted
average
exercise price
€
62,016
62,016
81,376
81,376
0.26
0.26
1.13
1.13
1.19
1.19
1.26
1.26
62,016
62,016
10,285
10,285
1.19
1.19
1.75
1.75
Employee Share Incentive Plan
The Group operates an Employee Share Incentive Plan for all UK employees. This was a once off grant of share awards in January 2022 and
the number of shares was calculated at market value on the date of allocation, and was to be held by a Trustee for the benefit of individual
participants without any additional performance conditions other than three years of service. The shares vest after three years but are forfeit
should an employee voluntarily leave the Group within the three-year time period, subject to normal ‘good leaver’ provisions. The charge
recognised in the Group Income Statement was £0.5m (2022: £0.4m).
The share price on the grant date, for awards granted in January 2022 was £1.35.
The following table illustrates the number of, and movements in, share awards during the financial year under the plan:
At beginning of financial year
Granted
Exercised
Forfeited
At end of financial year
Exercisable at end of financial year
2023
Number
outstanding
1,911,392
–
(46,920)
(25,760)
2022
Number
outstanding
–
2,180,216
(18,768)
(250,056)
1,838,712
1,911,392
–
–
Restricted Share Plan
In 2023, the Group launched a Restricted Share Plan to assist with the recruitment and retention of employees in the UK and Ireland below
the Executive Director level. The number of shares granted is calculated at the market value on the date of allocation, without any additional
performance conditions other than continuous service for a period of one year and two years, with 50% of the awards vesting one year
after the grant date, and the remainder vesting after two years. There are no holding periods applicable after the vesting date. The charge
recognised in the Group Income Statement was £0.5m (2022: £Nil).
In June 2023 2,506,236 shares were awarded when the share price was £0.80, and a further 117,537 shares were awarded in September 2023
when the share price was £0.77.
The following table illustrates the number of, and movements in, share awards during the financial year under the plan:
At beginning of financial year
Granted
At end of financial year
Exercisable at end of financial year
2023
Number
outstanding
–
2,623,773
2,623,773
–
Weighted average assumptions used to value the share schemes
Annual Bonus Plan, Employee Share Incentive Plan and Restricted Share Plan
The fair value of awards granted under the Annual Bonus Plan, Employee Share Incentive Plan and Restricted Share Plan is equal to the share
price on the grant date.
Strategic Report | Directors’ Report | Financial Statements | Other Information 144 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
6. Share-based payments continued
Weighted average assumptions used to value the share schemes continued
Performance Share Plan
All vesting conditions relating to the awards will be equally weighted when assessing the fair value at grant date. The TSR component has been
valued using a Monte Carlo simulation model which also incorporates the relative volatility of the identified peer group with whom the Group
are compared to assess the TSR vesting condition. The following table shows the weighted average assumptions used to fair value the equity
settled awards granted.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Share price at grant (£)
Fair value (£)
FY23
PSP TSR
4.43%
41.26%
3.16%
3
£0.63
£0.27
FY22
PSP TSR
2.39%
40.63%
0.52%
3
£1.33
£0.59
ShareSave Schemes
The ShareSave Schemes equity settled options are also valued at the fair value on grant date and are calculated by applying a trinomial model.
The following table shows the weighted average assumptions used to fair value the equity settled options granted.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Employee failure-to-save rate (p.a.) (%)
Expected life of option (years)
Share price at grant (£)
Exercise price (£)
Fair value (£)
2023
UK
ShareSave
5.96%
42.24%
5.23%
20.63%
3
£0.84
£0.63
£0.14
2022
UK
ShareSave
4.31%
39.70%
1.75%
20.63%
3
£0.96
£0.91
£0.11
The expected volatility is estimated based on the historic volatility of the Company’s share price over a period equivalent to the life of the
relevant option. The risk-free rate of return is the yield on a government bond of a term consistent with the life of the option.
The range of the Company’s share price during the financial year was £0.61–£0.92 (2022: £0.71–£1.47). The average share price during the
2023 financial year was £0.77 (2022: £1.17).
7. Exceptional items
Exceptional items are those which, as set out in our accounting policy, are disclosed separately by virtue of their nature or amount. Such items
are included within the Group Income Statement caption to which they relate.
The Group reports the following exceptional items:
Reorganisation costs
Defined benefit pension schemes restructuring
Profit on disposal of trading business
Release of legacy business liability
Reversal of impairment
Non-core property-related income
Total exceptional items before taxation
Tax credit on exceptional items
Total exceptional items
(A)
(B)
(C)
(D)
(E)
(F)
2023
£m
(8.9)
(0.4)
0.1
1.7
0.6
0.2
(6.7)
1.2
(5.5)
2022
£m
(16.1)
(0.4)
–
–
–
–
(16.5)
3.0
(13.5)
(A) Reorganisation costs
The Group continued with its change programme ‘Better Greencore’, which commenced in the prior financial year. This is to support
revitalisation of its excellence cost efficiency programmes and unlock further cost efficiencies by reducing organisational complexity. The
Group recognised a charge of £8.9m in the current financial year (2022: £16.1m) of which £6.2m related to people costs and £2.7m related to
professional fees.
145
(B) Defined benefit pension schemes restructuring
In the current financial year, the Group incurred a charge of £0.4m (2022: £0.4m) in relation to restructuring costs associated with its legacy
defined benefit schemes in Ireland. In FY23, the Trustees of the scheme completed the buy-in of an annuity insurance policy. See Note 24 for
further details.
(C) Profit on disposal of trading business
On 29 September 2023, the Group completed the disposal of its interest in its Irish trading business, Trilby Trading Limited, recognising a profit
on disposal of £0.1m (2022: £Nil). For more detail on the disposal, see Note 28.
(D) Release of legacy business liability
In the current financial year, the Group released £1.7m of a liability relating to legacy business disposals which the Group is satisfied are not
probable to be paid.
(E) Reversal of impairment
As volumes have continued to build back since the impact of COVID-19, the Group reopened a facility and brought its related assets back
into use in the financial year which had been impaired in a prior period. The Group reviewed the assets in line with the requirements of IAS 36
Impairment of Assets and determined it appropriate to recognise a reversal of impairment of £0.6m relating to these assets.
(F) Non-core property-related income
At 29 September 2023, the Group reviewed the fair value of the Irish investment properties portfolio in line with the requirements of IAS 36,
with consideration given to bids received from third parties during the financial year for the purchase of parts of the land and have determined
it appropriate to recognise a reversal of an impairment of £1.6m. The Group also recognised a provision of £1.2m (2022: £Nil) of remediation
costs in relation to investment properties.
Cash Flow on exceptional items
The total net cash outflow during the financial year in respect of exceptional charges was £10.9m (2022: £13.6m), of which £2.7m was in
respect of prior financial year exceptional charges. The net proceeds from the disposal of Trilby Trading Limited of £6.1m has been recognised
separately on the Group Statement of Cash Flows within investing activities.
8. Finance costs and finance income
Finance income
Interest on bank deposits
Total finance income
Finance costs
Finance costs on interest bearing cash and cash equivalents, borrowings and other financing costs
Interest on lease obligations (Note 14)
Net pension financing charge (Note 24)
Unwind of discount on liabilities
Change in fair value of derivatives and related debt adjustment
Foreign exchange on inter-company and external balances where hedge accounting is not applied
Total finance costs
Recognised directly in equity
Currency translation adjustment
Effective portion of changes in fair value of cash flow hedges
There were no interest costs capitalised in the financial year (2022: £0.4m).
2023
£m
0.7
0.7
(17.6)
(1.2)
(1.2)
(0.1)
(1.2)
(0.2)
(21.5)
(0.5)
(3.1)
(3.6)
2022
£m
0.2
0.2
(11.3)
(1.2)
(1.1)
(0.1)
1.9
(0.7)
(12.5)
1.8
8.5
10.3
Strategic Report | Directors’ Report | Financial Statements | Other Information 146 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
9. Taxation
Current tax
Overseas tax charge
Adjustment in respect of prior years
Total current tax charge (pre-exceptional)
Deferred tax
Origination and reversal of temporary differences
Legacy defined benefit pension obligations
Effect of tax rate change
Employee share-based payments
Adjustment in respect of prior years
Total deferred tax charge (pre-exceptional)
Income tax expense (pre-exceptional)
Tax on exceptional items
Current tax credit
Deferred tax credit
Tax credit on exceptional items
Total tax charge for the financial year
Tax relating to items taken directly to equity
Deferred tax relating to items taken directly to equity
Actuarial (loss)/gain on Group legacy defined benefit pension schemes
Employee share-based payments
Total deferred tax in equity for the financial year
Reconciliation of total tax charge
The tax charge for the financial year can be reconciled to the profit per the Group Income Statement as follows:
Profit for the financial year
Adjusted for:
Tax charge for the financial year
Profit before taxation
Tax charge at Irish corporation tax rate of 12.5% (2022: 12.5%)
Effects of:
Expenses not deductible for tax purposes
Differences in effective tax rates on overseas earnings
Effect of trading losses not recognised
Effect of rate change in the UK
Adjustment in respect of prior years
Total tax charge for the financial year
2023
£m
7.6
(1.4)
6.2
6.0
2.7
0.8
(0.8)
(4.4)
4.3
10.5
(1.2)
–
(1.2)
9.3
0.6
(0.3)
0.3
2023
£m
35.9
9.3
45.2
5.7
2.2
4.6
1.8
0.8
(5.8)
9.3
2022
£m
6.6
(3.8)
2.8
2.9
2.6
1.5
(0.1)
0.8
7.7
10.5
(2.9)
(0.1)
(3.0)
7.5
4.1
0.1
4.2
2022
£m
32.3
7.5
39.8
5.0
0.7
2.9
0.4
1.5
(3.0)
7.5
Deferred taxation
The Group’s deferred tax assets and liabilities are analysed as follows:
Year ended 29 September 2023
At 30 September 2022
Income Statement credit/(charge)
Tax recorded in equity
At 29 September 2023
Deferred tax assets (deductible temporary differences)
Deferred tax liabilities (taxable temporary differences)
Net deferred tax asset/(liability)
Year ended 30 September 2022
At 24 September 2021
Income Statement (charge)/credit
Tax recorded in equity
Exceptional items (Note 7)
Currency translation adjustment and other
At 30 September 2022
Deferred tax assets (deductible temporary differences)
Deferred tax liabilities (taxable temporary differences)
Net deferred tax asset/(liability)
Property,
plant and
equipment
£m
Acquisition
-related
intangibles
£m
Retirement
benefit
obligations
£m
(11.3)
3.0
–
(8.3)
2.8
(11.1)
(8.3)
(2.7)
1.0
–
(1.7)
–
(1.7)
(1.7)
9.9
(2.0)
(0.6)
7.3
9.6
(2.3)
7.3
Property,
plant and
equipment
£m
Acquisition
-related
intangibles
£m
Retirement
benefit
obligations
£m
(9.5)
(1.8)
–
–
–
(11.3)
–
(11.3)
(11.3)
(3.6)
0.9
–
–
–
(2.7)
–
(2.7)
(2.7)
16.7
(2.6)
(4.1)
–
(0.1)
9.9
14.8
(4.9)
9.9
Employee
share-
based
payment
£m
0.5
0.4
0.3
1.2
1.2
–
1.2
Employee
share-
based
payment
£m
0.5
0.1
(0.1)
–
–
0.5
0.5
–
0.5
Tax
losses
£m
18.9
(6.5)
–
12.4
12.4
–
12.4
Tax
losses
£m
23.2
(4.5)
–
0.1
0.1
18.9
18.9
–
18.9
Other
£m
2.9
(0.2)
–
2.7
2.8
(0.1)
2.7
Other
£m
2.6
0.2
–
–
0.1
2.9
2.9
–
2.9
147
Total
£m
18.2
(4.3)
(0.3)
13.6
28.8
(15.2)
13.6
Total
£m
29.9
(7.7)
(4.2)
0.1
0.1
18.2
37.1
(18.9)
18.2
The Group has not provided deferred tax in relation to temporary differences of approximately £300m (2022: £300m) applicable to
investments in subsidiaries on the basis that the Group can control the timing and realisation of these temporary differences, and it is probable
that the temporary differences will not reverse in the foreseeable future. No provision has been provided in respect of deferred tax relating to
unremitted earnings of subsidiaries as there is no commitment to remit earnings.
No deferred tax asset is recognised in respect of certain tax losses and other attributes incurred by the Group on the grounds that there
is insufficient evidence that the assets will be recoverable. In the event that sufficient profits are generated in the relevant jurisdictions in
the future, these assets may be recovered. The unrecognised deferred tax asset at 29 September 2023 was £54.7m (2022: £42.2m) which
has been calculated based on the tax rate applicable to the jurisdiction to which the losses relate and has been translated to the Group
presentation currency at the closing rate on 29 September 2023.
The total gross unrecognised trading tax losses are £153.8m (2022: £197.3m). There is not an expiry date for these losses in any jurisdiction.
The unrecognised deferred tax asset on these losses amounts to £32.6m (2022: £17.8m).
The total gross unrecognised capital tax losses are £54.7m (2022: £54.7m). These capital losses will not expire in any jurisdiction. The
unrecognised deferred tax asset on these losses amounts to £14.3m (2022: £14.3m).
Recognition of deferred tax assets is a key judgement in the Group Financial Statements as disclosed in Note 1.
Factors that may impact future tax charges and other disclosures
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two legislation is expected to be enacted in Ireland in December
2023 and will come into effect from 1 January 2024. Since the Pillar Two legislation is not effective at the reporting date of 29 September
2023, the Group has no related current tax exposure. The Group applies the exception to recognising and disclosing information about
deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.
Under the new legislation, groups will be liable to assess their effective tax rate (according to complex new rules) in each jurisdiction that they
operate. If the effective tax rate in any jurisdiction is less than the 15% minimum rate top up taxes will be payable. The Group are not expecting
to pay top up taxes in the period ending in September 2024. The Group will continue to assess its position to estimate any impact.
Strategic Report | Directors’ Report | Financial Statements | Other Information 148 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
10. Earnings per Ordinary Share
Basic earnings per Ordinary Share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the financial year, excluding Ordinary Shares purchased by the Company and held in trust in
respect of the Annual Bonus Plan, the Performance Share Plan, the Employee Share Incentive Plan and the Restricted Share Plan.
Diluted earnings per Ordinary Share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume
conversion of all dilutive potential Ordinary Shares.
Adjusted Basic Earnings per Share is calculated as Adjusted Earnings divided by the weighted average number of Ordinary Shares in issue
during the financial year. The numerator for Adjusted Basic Earnings per Share is calculated as profit attributable to equity holders of the
Company adjusted to exclude exceptional items (net of tax), the effect of foreign exchange (‘FX’) on inter-company and certain external
balances where hedge accounting is not applied, the movement in the fair value of all derivative financial instruments and related debt
adjustments, the amortisation of acquisition-related intangible assets (net of tax) and the effect of interest expense relating to legacy defined
benefit pension liabilities (net of tax).
In the current financial year, the Group repurchased 33,382,718 Ordinary Shares (2022: 9,728,677) in the Company, by way of a share buyback,
costing £26.2m (2022: £8.8m). These shares were immediately cancelled. The effect of this on the weighted average number of Ordinary
Shares was a decrease of 16,134,894 shares (2022: 774,827).
The total Ordinary Shares in issue at 29 September 2023 was 483,453,842 (2022: 516,836,560).
Numerator for earnings per share and Adjusted Earnings per Share calculations
Profit attributable to equity holders of the Company (numerator for earnings per share calculations)
Exceptional items (net of tax)
Movement on fair value of derivative financial instruments and related debt adjustments
FX effect on inter-company and external balances where hedge accounting is not applied
Amortisation of acquisition-related intangible assets (net of tax)
Pension financing (net of tax)
Numerator for Adjusted Earnings per Share calculations
Denominator for basic earnings per share and Adjusted Earnings per Share calculations
Shares in issue at the beginning of the financial year
Effect of share buyback and cancellation in the financial year
Effect of shares held by Employee Benefit Trust
Effect of shares issued during the financial year
2023
£m
35.9
5.5
1.2
0.2
2.7
0.7
46.2
2022
£m
32.3
13.5
(1.9)
0.7
2.7
0.8
48.1
2023
‘000
516,837
(16,135)
(5,330)
–
2022
‘000
526,547
(775)
(2,403)
13
Weighted average number of Ordinary Shares in issue during the financial year
495,372
523,382
Denominator for diluted earnings per share calculations
Employee Performance Share Plan awards, which are performance based, are treated as contingently issuable shares, because their issue is
contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable Ordinary
Shares are excluded from the computation of diluted earnings per Ordinary Share where the conditions governing exercisability have not been
satisfied as at the end of the reporting period.
A total of 20,252,989 (2022: 17,031,830) unvested shares were excluded from the diluted earnings per share calculation as they were either
antidilutive or contingently issuable Ordinary Shares which had not satisfied the performance conditions attaching at the end of the 2023
financial year.
A reconciliation of the weighted average number of Ordinary Shares used for the purpose of calculating the diluted earnings per share
amounts is as follows:
Weighted average number of Ordinary Shares in issue during the financial year
Dilutive effect of share options
Weighted average number of Ordinary Shares for diluted earnings per share
2023
‘000
495,372
1,165
496,537
2022
‘000
523,382
2,123
525,505
Earnings per share calculations
Basic earnings per Ordinary Share
Adjusted Earnings per Ordinary Share
Diluted earnings per Ordinary Share
149
2022
Total
pence
6.2
9.2
6.1
2023
Total
pence
7.2
9.3
7.2
11. Dividends paid and proposed
There were no dividends paid in the current or prior year and there are no dividends proposed to be paid.
In the current financial year, the next phase of the value return to shareholders completed with a further £26.2m value (2022: £8.8m) returned
up to 29 September 2023 in the form of a share buyback. The Group launched the fourth share buyback programme which commenced on
10 October 2023 and will end no later than 30 March 2024 and will conclude the £50m commitment.
12. Goodwill and intangible assets
Year ended 29 September 2023
At 30 September 2022
Additions
Amortisation charge
Disposal of undertakings (Note 28)
Currency translation adjustment
At 29 September 2023
Year ended 29 September 2023
Cost
Accumulated impairment/amortisation
At 29 September 2023
Year ended 30 September 2022
At 24 September 2021
Additions
Amortisation charge
Currency translation adjustment
At 30 September 2022
Year ended 30 September 2022
Cost
Accumulated impairment/amortisation
At 30 September 2022
Acquisition
-related
intangible assets
– Customer
related
£m
Goodwill
£m
Computer
software
and other
intangibles
£m
449.4
–
–
(2.0)
(0.1)
447.3
457.9
(10.6)
447.3
Goodwill
£m
449.4
–
–
–
449.4
460.0
(10.6)
449.4
11.1
–
(3.6)
–
–
7.5
52.3
(44.8)
7.5
7.6
1.4
(2.7)
–
–
6.3
18.5
(12.2)
6.3
Acquisition
-related
intangible assets
– Customer
related
£m
Computer
software
and other
intangibles
£m
14.7
–
(3.6)
–
11.1
52.3
(41.2)
11.1
9.2
1.5
(3.1)
–
7.6
20.6
(13.0)
7.6
Total
£m
468.1
1.4
(6.3)
(2.0)
(0.1)
461.1
528.7
(67.6)
461.1
Total
£m
473.3
1.5
(6.7)
–
468.1
532.9
(64.8)
468.1
During the financial year, £2.0m of goodwill was disposed of as part of the disposal of the Irish ingredients trading business, Trilby Trading
Limited. See Note 28 for further details.
Strategic Report | Directors’ Report | Financial Statements | Other Information 150 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
12. Goodwill and intangible assets continued
Goodwill and impairment testing
Goodwill acquired in business combinations is allocated, at acquisition, to the cash generating units (‘CGUs’) that are expected to benefit from
that business combination. The Group had allocated goodwill to its two CGUs, Convenience Foods UK and Irish Ingredients and Property
trading businesses.
The CGUs represent the lowest level within the Group at which the associated goodwill is assessed for internal management purposes and
are not larger than the operating segment determined in accordance with IFRS 8 Operating Segments. A summary of the allocation of the
carrying value of goodwill by CGU is as follows:
Convenience Foods UK
Irish Ingredients and Property
2023
£m
447.3
–
447.3
2022
£m
447.4
2.0
449.4
As the goodwill relating to the Irish Ingredients and Property CGU was disposed of during the financial year, an impairment assessment of this
CGU was not required at 29 September 2023.
Key assumptions
The recoverable amount of goodwill allocated to the Convenience Foods UK CGU is based on a value in use calculation with the key
assumptions set out in the table below.
The market capitalisation of the Group at 29 September 2023 was below the Group’s net asset value at that date, which is an indicator of
impairment. This has been considered in the impairment testing performed. Assumptions underpinning the value in use calculation include
management’s estimates of cash flow projections, long-term growth rates and discount rates.
Key assumptions
Basis for determining values assigned to key assumptions
Cash flow projections
The cash flow projections are based on the FY24 budget, which has been approved by the Board,
and a two-year strategic plan, which specifically excludes incremental profits and other cash flows
stemming from any potential future acquisitions or future operational restructuring.
In preparing the FY24 budget and the FY25 and FY26 strategic plan, the Group has based these
on industry experience with changes in selling prices and direct costs based on past practices and
expectations of future changes in the market. Future cash flows also take account of cost inflation and
price recovery and growth in future volumes. The cash flows include an assumption on maintenance
capital expenditure required by the business over the future projected period.
The impact of climate change risks as part of our near-term strategy including investments in effluent
treatment, capital expenditure to assist in our carbon emission reduction targets, and impairment
considerations on transition of the Group’s distribution fleet to electric vehicles and alternative
fuels have been considered as part of the goodwill impairment testing process through cash flow
projections.
A long-term growth rate of 2% (FY22: 2%) has been used in extrapolating the cashflows beyond the
budget and strategic plan period to perpetuity. This growth rate does not exceed the long-term
average growth rate for industries in which the CGU operates.
The pre-tax discount rate has increased in the current financial year for the Convenience Foods UK
CGU, from 11% at 30 September 2022 to 13% at 29 September 2023. The pre-tax discount rates are
based on the Group’s weighted average cost of capital, calculated using the Capital Asset Pricing
Model adjusted for the Group’s specific beta coefficient together with a country risk premium to take
account where the CGU derives its cash flows.
Long-term growth rate
Discount rate
Applying these techniques, no impairment charge arose in 2023 (2022: £Nil).
Sensitivity analysis
The key assumptions underlying the impairment reviews are set out above. Sensitivity analysis has been conducted in respect of the CGU
using the following sensitivity assumptions: 1% increase in the discount rate; 10% decrease in cash flow projections; and nil terminal value
growth. There was no CGU impairments as a result of the applied sensitivity analysis in 2023.
13. Property, plant and equipment
Year ended 29 September 2023
At 30 September 2022
Additions
Depreciation charge
Impairments
Reversal of impairment
Reclassifications
Disposal of undertakings (Note 28)
At 29 September 2023
Year ended 29 September 2023
Cost
Accumulated depreciation
At 29 September 2023
Year ended 30 September 2022
At 24 September 2021
Additions
Depreciation charge
Impairments
Reclassifications
At 30 September 2022
Year ended 30 September 2022
Cost
Accumulated depreciation
At 30 September 2022
151
Total
£m
319.4
36.4
(37.5)
(3.0)
0.6
–
(0.4)
315.5
668.2
(352.7)
315.5
307.4
48.9
(36.0)
(0.9)
–
319.4
632.1
(312.7)
319.4
Land and
buildings
£m
Plant and
machinery
£m
Fixtures and
fittings
£m
Capital work in
progress
£m
158.5
0.2
(11.6)
(0.6)
0.4
9.7
(0.4)
156.2
266.4
(110.2)
156.2
154.6
0.2
(10.9)
(0.2)
14.8
158.5
256.5
(98.0)
158.5
134.5
1.0
(21.8)
(1.9)
0.2
16.0
–
128.0
332.2
(204.2)
128.0
119.1
1.7
(19.8)
(0.6)
34.1
134.5
315.2
(180.7)
134.5
12.7
1.4
(4.1)
(0.2)
–
2.6
–
12.4
50.7
(38.3)
12.4
16.3
0.8
(5.3)
(0.1)
1.0
12.7
46.7
(34.0)
12.7
13.7
33.8
–
(0.3)
–
(28.3)
–
18.9
18.9
–
18.9
17.4
46.2
–
–
(49.9)
13.7
13.7
–
13.7
Capital work in progress relates to buildings and plant and machinery under construction which the Group expect will be brought into use
within 12–24 months.
The Group keeps all assets under review on an ongoing basis to identify any impairments to be recognised as a result of obsolescence due
to either a change in production methods rendering certain assets idle or impairment due to replacement of assets to align with the Group’s
net zero targets. The Group recognised an impairment charge of £3.0m (2022: £0.9m) following these reviews being carried out. This was
charged to operating costs in the Group Income Statement in both the current and the prior year. No assets were impaired in the current
financial year due to climate-related strategy.
During the current financial year, the Group recognised the reversal of impairment of £0.6m (2022: £Nil) in certain assets which have been
brought back into use in the financial year. This has been reviewed in line with the requirements of IAS 36 Impairment of Assets.
At 29 September 2023, the Group disposed of its investment in Trilby Trading Limited and as such £0.4m of land and buildings was disposed
of. For further details, see Note 28.
Strategic Report | Directors’ Report | Financial Statements | Other Information 152 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
14. Leases
The movement in the Group’s right-of-use assets during the financial year is as follows:
Year ended 29 September 2023
At 30 September 2022
Additions
Disposals
Depreciation charge for the financial year
Right-of-use assets at 29 September 2023
Year ended 30 September 2022
At 24 September 2021
Additions
Disposals
Depreciation charge for the financial year
Right-of-use assets at 30 September 2022
The movement in the Group’s lease liabilities during the financial year is as follows:
At beginning of financial year
Additions
Disposals
Payments for lease liabilities
Payments for lease interest
Lease interest charge
At end of financial year
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
29.3
7.3
–
(6.8)
29.8
7.6
1.9
(0.1)
(3.2)
6.2
7.5
4.1
(0.3)
(6.3)
5.0
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
34.5
0.4
–
(5.6)
29.3
8.6
2.6
(0.3)
(3.3)
7.6
11.0
3.8
(0.6)
(6.7)
7.5
2023
£m
48.0
13.0
(0.4)
(15.6)
(1.2)
1.2
45.0
An analysis of the maturity profile of the discounted lease liabilities arising from the Group’s leasing activities is as follows:
Within one year
Between one and five years
Over 5 years
Total
Analysed as:
Current liabilities
Non-current liabilities
Total
2023
£m
14.3
25.9
4.8
45.0
14.3
30.7
45.0
Total
£m
44.4
13.3
(0.4)
(16.3)
41.0
Total
£m
54.1
6.8
(0.9)
(15.6)
44.4
2022
£m
59.6
6.6
(0.9)
(17.3)
(1.2)
1.2
48.0
2022
£m
14.4
26.3
7.3
48.0
14.4
33.6
48.0
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met.
The following lease costs have been charged to the Group Income Statement on a straight-line basis:
Short-term leases
Leases of low-value assets
Total
The total cash outflow for lease payments during the financial year was as follows:
Cash outflow for short-term leases and leases of low value
Lease payments relating to capitalised right-of-use leased assets
Interest payments relating to lease obligations
Total
2023
£m
6.3
0.1
6.4
2023
£m
6.4
15.6
1.2
23.2
2022
£m
5.4
0.2
5.6
2022
£m
5.6
17.3
1.2
24.1
15. Investment property
At beginning of the financial year
Reversal of impairment
Currency translation adjustment
At end of financial year*
Analysed as:
Cost
Accumulated depreciation
At end of financial year
153
2022
£m
3.0
–
0.1
3.1
3.1
–
3.1
2023
£m
3.1
1.6
(0.1)
4.6
4.6
–
4.6
* The majority of the Group’s investment property is land and is not depreciated.
The carrying value of the Group’s investment properties at 29 September 2023 was £4.6m (2022: £3.1m). The valuations were carried out by the
Group using external independent valuers and property brokers and was arrived at by reference to location, market conditions and status of planning
applications. In addition, the Group have been in negotiation with third-party market participants to purchase some of the land in the Irish investment
property portfolio. As the market price was higher than the carrying value, the Group have reviewed the carrying value in line with the requirements of
IAS 36 Impairment of Assets and have considered it appropriate to reverse part of an impairment recognised in a prior period of £1.6m (2022: £Nil).
The fair values of investment properties require Level 3 inputs to determine a fair value measurement.
An increase or decrease in the price per hectare of 5% would result in a 5% or £0.2m increase or decrease in the fair value of the land.
16. Inventories
Raw materials and consumables
Work in progress
Finished goods and goods for resale
2023
£m
39.8
0.3
32.8
72.9
2022
£m
38.2
0.4
24.7
63.3
None of the above carrying amounts have been pledged as security for liabilities entered into by the Group.
Inventory recognised within cost of sales
1,032.3
847.4
The amount recognised as an expense for a reduction in the carrying value of inventory from cost to net realisable value was £6.9m
(2022: £4.5m).
17. Trade and other receivables
Current
Trade receivables
Other receivables
Prepayments
VAT
Contract costs
Total
2023
£m
170.6
40.3
12.9
10.3
0.1
234.2
2022
£m
179.5
42.5
14.5
12.1
0.1
248.7
The fair value of current receivables approximates book value due to their short-term nature.
Approximately £36.0m (2022: £36.0m) of the Group’s trade and other receivables are secured against pension liabilities. See Note 24 for
further details.
The Group’s exposure to credit and currency risk and impairment losses related to trade and other receivables is set out in Note 22.
Strategic Report | Directors’ Report | Financial Statements | Other Information 154 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
18. Trade and other payables
Current
Trade payables
Employment related taxes
Other payables and accrued expenses
Current trade and other payables
Non-current
Other payables
Total trade and other payables
The fair value of trade and other payables approximates book value due to their short-term nature.
The Group’s exposure to liquidity and currency risk is disclosed in Note 22.
19. Cash and cash equivalents and bank overdrafts
Cash at bank and in hand
2023
£m
316.3
9.7
120.0
446.0
2.4
448.4
2022
£m
295.8
11.7
137.6
445.1
2.7
447.8
2023
£m
116.5
2022
£m
99.6
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods, between
one day and one month, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit
rates. The fair value of cash and cash equivalents equals the carrying amount.
For the purposes of the Group Statement of Cash Flows, cash and cash equivalents and bank overdrafts are presented net as follows:
Cash at bank and in hand
Bank overdraft (Note 20)
Total cash and cash equivalents and bank overdrafts
20. Borrowings
Current
Bank overdrafts
Bank borrowings
Private Placement Notes
Total current borrowings
Non-current
Bank borrowings
Private Placement Notes
Total non-current borrowings
Total borrowings
The maturity of borrowings is as follows:
Less than 1 year
Between 1 and 2 years
Between 2 and 5 years
2023
£m
116.5
(83.7)
32.8
2023
£m
83.7
45.0
16.0
144.7
94.0
31.8
125.8
270.5
2023
£m
144.7
16.0
109.8
270.5
2022
£m
99.6
(52.9)
46.7
2022
£m
52.9
–
16.9
69.8
158.8
51.0
209.8
279.6
2022
£m
69.8
111.9
97.9
279.6
155
The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at the year end date are as follows:
6 months or less
1–5 years
2023
£m
139.0
47.8
186.8
2022
£m
158.8
67.9
226.7
The average spread that the Group paid on its financing facilities in the financial year ended 29 September 2023 was 1.80% (2022: 2.16%).
Bank overdrafts are part of the Group cash pooling arrangement and therefore are not exposed to interest rate changes.
Bank borrowings
The Group’s bank borrowings are denominated in sterling. At 29 September 2023 interest is set at commercial rates based on a spread above
SONIA.
The Group’s bank borrowings, net of finance fees amounted to £139.0m at 29 September 2023 (September 2022: £158.8m) with maturities
ranging from June 2024 to January 2026. The Group had £295.0m (September 2022: £350.0m) of undrawn committed bank facilities
in respect of which all conditions precedent had been met. Uncommitted facilities undrawn at 29 September 2023 amounted to £5.0m
(September 2022: £9.5m).
Private Placement Notes
The Group’s outstanding Private Placement Notes net of finance fees amounted to £47.8m (denominated as $41.9m and £13.5m) at
29 September 2023 (2022: £67.9m, denominated as $55.9m and £18m). These were issued as fixed rate debt in June 2016 ($55.9m and £18m)
with maturities ranging between June 2024 and June 2026. The Group repaid $14.0m and £4.5m Private Placement Notes in June 2023
(2022: $65m repaid in October 2021).
In December 2018, the Group entered into cross-currency swap arrangements for the $55.9m Private Placement Notes to swap from fixed
rate US dollar to fixed rate sterling. The fixed rate US dollar to fixed rate sterling swaps are designated as cash flow hedges.
Revisions to financing agreements
Subsequent to the year end, the Group has refinanced its debt facilities with a new five-year £350m sustainability-linked revolving credit
facility (‘RCF’), maturing in November 2028 with the option to extend for up to a further two years. This new facility replaces the existing
£340m RCF that was due to mature in January 2026. A £45m term loan due to mature in June 2024 was also repaid in full as part of this debt
restructuring.
Guarantees
The Group’s financing facilities are secured by guarantees from Greencore Group plc and cross-guarantees from various companies within
the Group. The Group treats these guarantee contracts as contingent liabilities until such time as it becomes probable that a payment will be
required under such guarantees.
Interest rate profile
The interest rate profile of cash and cash equivalents and borrowings at 29 September 2023 was as follows:
Floating rate net debt
Fixed rate net debt
Total
US
dollar
£m
0.1
(34.3)
(34.2)
Euro
£m
5.2
–
5.2
The interest rate profile of cash and cash equivalents and borrowings at 30 September 2022 was as follows:
Floating rate net debt
Fixed rate net debt
Total
Australian
dollar
£m
0.1
–
0.1
US
dollar
£m
(1.4)
(50.0)
(51.4)
Euro
£m
5.8
–
5.8
Sterling
£m
(21.5)
(103.5)
(125.0)
Sterling
£m
(26.5)
(108.0)
(134.5)
Total
£m
(16.2)
(137.8)
(154.0)
Total
£m
(22.0)
(158.0)
(180.0)
Strategic Report | Directors’ Report | Financial Statements | Other Information 156 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
21. Derivative financial instruments
Derivative financial instruments recognised as assets and liabilities in the Statement of Financial Position are analysed as follows:
Current
Cross-currency swaps – cash flow hedges
Interest rate swaps – cash flow hedges
Forward foreign exchange contracts – not designated as hedges
Non-current
Cross-currency swaps – cash flow hedges
Interest rate swaps – cash flow hedges
Total
Current
Cross-currency swaps – cash flow hedges
Forward foreign exchange contracts – not designated as hedges
Non-current
Cross-currency swaps – cash flow hedges
Interest rate swaps – cash flow hedges
Forward foreign exchange contracts – not designated as hedges
Total
Assets
£m
2023
Liabilities
£m
0.4
0.5
–
0.9
1.2
2.5
3.7
4.6
Assets
£m
1.5
1.0
2.5
5.9
6.4
0.1
12.4
14.9
–
–
(0.0)
(0.0)
–
–
–
(0.0)
2022
Liabilities
£m
–
(0.1)
(0.1)
–
–
–
–
(0.1)
Net
£m
0.4
0.5
(0.0)
0.9
1.2
2.5
3.7
4.6
Net
£m
1.5
0.9
2.4
5.9
6.4
0.1
12.4
14.8
Derivative instruments which are held for trading and are not designated as effective hedging instruments are classified as a current asset or
liability (as appropriate) regardless of maturity if the Group expects that they may be settled within 12 months of the year end date. Derivative
instruments that are designated as effective hedging instruments are classified as a current or non-current asset or liability by reference to the
maturity of the hedged item.
Cross-currency swaps
The Group utilises cross-currency swaps to convert fixed rate US dollar Private Placement Notes into fixed rate sterling liabilities.
Interest rate swaps
The Group utilises interest rate swaps to convert floating rate sterling into fixed rate sterling debt liabilities.
The principal amount of the Group’s borrowings which are swapped at 29 September 2023 total £90.0m (2022: £90.0m). At 29 September
2023, the fixed interest rates varied from 0.504% to 0.660% (2022: 0.504% to 0.660%) which mature in October 2023 and October 2024.
Forward foreign exchange contracts
The notional principal amounts of outstanding forward foreign exchange contracts at 29 September 2023 total £9.6m (2022: £47.4m). No
outstanding forward foreign exchange contracts are designated as cash flow hedges as at 29 September 2023 (2022: £Nil).
22. Financial risk management and financial instruments
Financial risk management objectives and policies
The Group’s activities expose it to a variety of financial risks that include interest rate risk, foreign currency risk, liquidity risk, credit risk and
price risk. These financial risks are actively managed by the Group’s Treasury and Purchasing departments under strict policies and guidelines
approved by the Board of Directors. The Group’s Treasury department actively monitors market conditions with a view to minimising the
exposure of the Group to changing market factors while at the same time minimising the volatility of the funding costs of the Group. The
Group uses derivative financial instruments such as foreign currency contracts, cross-currency swaps and interest rate swaps to manage the
financial risks associated with the underlying business activities of the Group.
Financial instruments that are carried at fair value, use different valuation methods. The different levels have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Inputs for the asset or liability that are not observable market data (unobservable inputs).
Level 3:
157
The fair value of the financial liabilities held at amortised cost and the financial liabilities in fair value hedges are within Level 2 of the fair value
hierarchy and have been calculated by discounting the expected future cash flows at prevailing interest rates and by applying financial year
end exchange rates.
2023
Loans and
receivables
£m
FV through
profit or loss
£m
Cash flow
hedges
£m
Financial
liabilities at
amortised cost
£m
Carrying value
£m
Fair value
£m
116.5
–
–
–
–
–
–
(0.0)
–
–
–
–
4.6
–
–
–
(83.7)
–
(139.0)
(47.8)
116.5
(83.7)
4.6
(139.0)
(47.8)
116.5
(83.7)
4.6
(138.9)
(45.9)
2022
Loans and
receivables
£m
FV through
profit or loss
£m
Cash flow
hedges
£m
99.6
–
–
–
–
–
–
1.0
–
–
–
–
13.8
–
–
Financial
liabilities at
amortised cost
£m
–
(52.9)
–
(158.8)
(67.9)
Carrying value
£m
Fair value
£m
99.6
(52.9)
14.8
(158.8)
(67.9)
99.6
(52.9)
14.8
(151.1)
(65.3)
Cash and cash equivalents*
Bank overdrafts*
Derivative financial instruments**
Bank borrowings**
Private Placement Notes**
* Level 1
** Level 2
Cash and cash equivalents*
Bank overdrafts*
Derivative financial instruments**
Bank borrowings**
Private Placement Notes**
* Level 1
** Level 2
The carrying value of trade and other receivables and trade and other payables are considered a reasonable approximation of fair value and
therefore have not been included in the tables above.
During the financial year and prior year, there were no transfers between the different levels identified above.
Interest rate risk
The Group’s exposure to market risk for changes in interest rates arises from its floating rate borrowings, cash and cash equivalents and
derivatives. The Group’s policy is to optimise interest cost and reduce volatility in reported earnings. This is managed by reviewing the debt
profile of the Group regularly on a currency by currency basis and by selectively using interest rate swaps to manage the level of floating
interest rate exposure.
The Group holds private placement in US dollars which have been swapped to sterling using cross-currency swaps.
Sensitivity analysis for floating rate debt
The full year impact of both an upward and downward movement in each applicable interest rate and interest rate curve by 100 basis points
(assuming all the other variables remain constant) is shown below.
Effect of a downward movement of 100 basis points
Effect of an upward movement of 100 basis points
negative = cost, positive = gain
On profit after tax
On equity
2023
£m
0.5
(0.5)
2022
£m
0.7
(0.7)
2023
£m
0.0
(0.0)
2022
£m
(0.6)
0.5
Strategic Report | Directors’ Report | Financial Statements | Other Information 158 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
22. Financial risk management and financial instruments continued
Foreign currency risk
The Group is exposed to currency risk on sales and purchases in certain businesses that are denominated in currencies other than the
functional currency of the entity concerned. The Group utilises foreign currency contracts to economically hedge foreign exchange
exposures arising from these transactions.
The Group’s trading entity exposures to foreign currency risk for amounts not denominated in the functional currency of the relevant entity at
the year end date were as follows (excluding derivative financial instruments):
Denominated in:
Trade receivables and other receivables
Trade payables and other payables
Cash and cash equivalents and bank overdrafts
Gross balance sheet exposure
Euro
£m
0.3
(5.2)
5.1
0.2
2023
US dollars
£m
–
–
0.1
0.1
Sterling
£m
–
–
–
–
Euro
£m
1.8
(7.0)
(4.9)
(10.1)
2022
US dollars
£m
6.6
(1.0)
(1.4)
4.2
Sterling
£m
2.5
(1.8)
(0.5)
0.2
Sensitivity analysis for primary foreign currency risk
A 10% strengthening of the sterling exchange rate against the euro exchange rates in respect of the translation of amounts not denominated in
the functional currency of relevant entities into the functional currency would impact profit after tax and equity by the amount shown below.
This assumes that all other variables remain constant. A 10% weakening of the sterling exchange rate against the euro exchange rates would
have an equal and opposite effect.
Impact of 10% strengthening of sterling vs. euro gain/(loss)
On profit after tax
On equity
2023
£m
0.8
2022
£m
(0.2)
2023
£m
4.5
2022
£m
5.1
Currency profile
The currency profile of cash and cash equivalents and bank overdrafts, borrowings and derivative financial instruments at 29 September 2023
was as follows:
Cash and cash equivalents and bank overdrafts
Current borrowings
Non-current borrowings
Other derivative financial instruments
Total
US dollar
£m
0.1
(11.4)
(22.9)
–
(34.2)
Euro
£m
5.2
–
–
–
5.2
Sterling
£m
27.5
(49.6)
(102.9)
4.6
(120.4)
Total
£m
32.8
(61.0)
(125.8)
4.6
(149.4)
The currency profile of cash and cash equivalents and bank overdrafts, borrowings and derivative financial instruments at 30 September 2022
was as follows:
Cash and cash equivalents and bank overdrafts
Current borrowings
Non-current borrowings
Other derivative financial instruments
Total
Australian
dollar
£m
0.1
–
–
–
0.1
US dollar
£m
(1.4)
(12.5)
(37.5)
–
(51.4)
Euro
£m
5.8
–
–
–
5.8
Sterling
£m
42.2
(4.4)
(172.3)
14.8
(119.7)
Total
£m
46.7
(16.9)
(209.8)
14.8
(165.2)
159
Liquidity risk
The Group’s policy on funding capacity is to ensure that it always has sufficient long-term funding and committed bank facilities in place
to meet foreseeable peak borrowing requirements with an appropriate level of additional headroom. A prudent approach to liquidity risk
management is taken by the Group by spreading the maturities of its debt using long-term financing. The Group’s Treasury department
actively monitors the current and future funding requirements of the business on a daily basis. Excess funds are placed on short-term deposit
for up to one month whilst ensuring that sufficient cash is available on demand to meet expected operational requirements.
Subsequent to the year end, the Group has refinanced its debt facilities with a new five year £350m sustainability-linked revolving credit facility
(‘RCF’), maturing in November 2028 with the option to extend for up to a further two years. This new facility replaces the existing £340m RCF
that was due to mature in January 2026. A £45m term loan due to mature in June 2024 was also repaid in full as part of this debt restructuring.
The following are the carrying amounts and contractual maturities of liabilities of financial liabilities (including interest payments):
29 September 2023
Non-derivative financial instruments
Bank overdrafts
Bank borrowings
Private Placement Notes
Lease liabilities
Trade payables, other payables and accrued expenses
Derivative financial instruments
Interest rate swaps – cash flow hedges
Inflow/(outflow)
Cross-currency swaps – cash flow hedges
Inflow
(Outflow)
Forward foreign exchange contracts
Inflow
(Outflow)
30 September 2022
Non-derivative financial instruments
Bank overdrafts
Bank borrowings
Private Placement Notes
Lease liabilities
Trade payable, other payables and accrued expenses
Derivative financial instruments
Interest rate swaps – cash flow hedges
Inflow/(outflow)
Cross-currency swaps – cash flow hedges
Inflow
(Outflow)
Forward foreign exchange contracts
Inflow
(Outflow)
Carrying
amount
£m
Contractual
amount
£m
Period
1–6 months
£m
Period
6–12 months
£m
Period
1–5 years
£m
Period
>5 years
£m
(83.7)
(139.0)
(47.8)
(45.0)
(438.7)
3.0
1.6
(0.0)
(83.7)
(158.1)
(51.6)
(45.8)
(438.7)
2.5
37.2
(35.6)
9.6
(9.6)
(83.7)
(5.0)
(1.1)
(9.5)
(436.3)
1.3
0.8
(0.6)
9.6
(9.6)
–
(49.3)
(16.8)
(3.9)
–
–
(103.8)
(33.7)
(28.0)
(2.4)
1.1
0.1
12.1
(11.6)
–
–
24.3
(23.4)
–
–
–
–
–
(4.4)
–
–
–
–
–
–
Carrying
amount
£m
Contractual
amount
£m
Period
1–6 months
£m
Period
6–12 months
£m
Period
1–5 years
£m
Period
>5 years
£m
(52.9)
(158.8)
(67.9)
(48.0)
(436.1)
6.4
7.4
1.0
(52.9)
(185.3)
(70.8)
(51.1)
(436.1)
7.5
55.3
(48.2)
47.4
(46.8)
(52.9)
(4.9)
(0.5)
(8.2)
(433.4)
1.6
1.2
(0.8)
27.1
(26.9)
–
(5.6)
(17.6)
(7.2)
–
2.0
13.5
(11.8)
14.9
(14.6)
–
(174.8)
(52.7)
(28.2)
(2.7)
3.9
40.6
(35.6)
5.4
(5.3)
–
–
–
(7.5)
–
–
–
–
–
–
Credit risk
Credit risk refers to the risk of financial loss to the Group if a counterparty defaults on its contractual obligations on financial assets held in the
balance sheet. Risk is monitored both centrally and locally.
The Group derives a significant proportion of its revenue from sales to a limited number of major customers (see details in Note 2). Sales to
individual customers can be of significant value and the failure of any such customer to honour its debts could materially impact the Group’s
results. The Group derives significant benefit from trading with its large customers and manages the risk by regularly reviewing the credit
history and rating of all significant customers and reviewing outstanding balances for indicators of impairment. There have been no significant
changes to the Group’s credit risk parameters or to the composition of the Group’s trade receivables during the financial year.
The Group also manages credit risk in the UK through the use of a receivables purchase arrangement. Under the terms of this agreement the
Group has transferred substantially all of the credit risk and control of the receivables, which are subject to this agreement, and accordingly,
£56.9m (2022: £54.0m) has been derecognised at year end. The impact on the Group’s Statement of Cash Flows is recognised in working
capital movements within operating activities.
Strategic Report | Directors’ Report | Financial Statements | Other Information 160 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
22. Financial risk management and financial instruments continued
Credit risk continued
In addition, the Group operates trade receivable factoring arrangements with two of its larger customers. These arrangements allow the
Group to choose to factor the receivable before the sales are contractually due from the customer. These are non-recourse arrangements
and therefore amounts are derecognised from trade receivables. At 29 September 2023 £39.3m (2022: £39.9m) was drawn under these
factoring facilities. The Group presents the factoring arrangements as part of the movement in working capital in the Group Statement of
Cash Flows.
The aged analysis of trade receivables for the year ended 29 September 2023 and 30 September 2022 is summarised in the table below.
Receivable within 1 month of the balance sheet date
Receivable between 1 and 3 months of the balance sheet date
Receivable greater than 3 months of the balance sheet date
Total trade receivables
2023
£m
167.6
1.5
1.5
170.6
2022
£m
172.2
5.5
1.8
179.5
Trade receivables are in general receivable within 90 days of the invoice date, are unsecured and are not interest bearing. The figures disclosed
above are stated net of allowances for impairment.
The Group applies the simplified approach to providing for expected credit losses (‘ECLs’) permitted by IFRS 9 Financial Instruments, which
requires expected lifetime losses to be recognised from initial recognition of the trade receivables. The Group uses an allowance matrix to
measure the ECLs of trade receivables based on its credit loss rates. Expected loss rates are based on historical payment profiles of sales and
the corresponding historical credit loss experience. The historical loss rates are adjusted to reflect current and forward economic factors
if there is evidence to suggest these factors will affect the ability of the customer to settle receivables. The Group has determined the ECL
default rate using market default risk probabilities with regard to its key customers.
The movements in the allowance for impairment of trade receivables are as follows:
At the beginning of the financial year
Provided during the financial year
Written off during the financial year
Recovered during the financial year
Disposal of undertakings
At end of financial year
2023
£m
(3.4)
(1.1)
0.7
0.1
0.3
(3.4)
2022
£m
(2.3)
(1.2)
0.1
–
–
(3.4)
The Group has calculated ECL on other receivables balances using market default risk probabilities for key customers and has assessed that an
allowance for impairment would be immaterial and therefore has not been provided for at 29 September 2023 (2022: £Nil).
Cash and cash equivalents and bank overdrafts
Exposure to credit risk on cash and derivative financial instruments is actively monitored by the Group’s Treasury department. Risk of
counterparty default arising on cash and cash equivalents and bank overdrafts is controlled by dealing with high-quality institutions and by
policy, limiting the amount of credit exposure to any one bank or institution. The Group transacts with a variety of high credit quality financial
institutions for the purpose of placing deposit. The Group actively monitors its credit exposure to each counterparty to ensure compliance
with the counterparty risk limits of the Board-approved Treasury Policy.
Of the total cash and cash equivalent at 29 September 2023 and 30 September 2022, the cash was predominantly held by financial institutions
with minimum short-term ratings of A-1 (Standard and Poor’s) or P-1 (Moody’s). The Group accordingly does not expect any loss in relation to
its cash and cash equivalents and bank overdrafts at 29 September 2023.
Price risk
The Group purchases a variety of commodities which can be subject to significant price volatility. The price risk on these commodities is
managed by the Group’s purchasing function by closely monitoring markets. The Group’s policy is to minimise its exposure to volatility by
adopting an appropriate forward purchase strategy by providing forward price forecasts to the business. This forecast enables the Group to
both predict and manage inflation.
161
Reconciliation of movements of liabilities to cash flows arising from financing activities
The reconciliation from opening to closing for the year ended 29 September 2023 is as follows:
Bank borrowings
Private Placement Notes
Lease liabilities
Total changes in liabilities arising from
financing activities
At
30 September
2022
£m
Financing
cash flows
£m
Foreign
currency
translation
£m
Other and
non-cash
movements
£m
Other
operating cash
movements
£m
At
29 September
2023
£m
(158.8)
(67.9)
(48.0)
20.2
15.5
15.6
(274.7)
51.3
–
4.6
–
4.6
(0.4)
–
(13.8)
(14.2)
–
–
1.2
1.2
(139.0)
(47.8)
(45.0)
(231.8)
The reconciliation of opening to closing for the prior year ended 30 September 2022 is as follows:
Bank borrowings
Private Placement Notes
Lease liabilities
Total changes in liabilities arising from
financing activities
At
24 September
2021
£m
(150.1)
(106.6)
(59.6)
Financing
cash flows
£m
(9.6)
47.3
17.3
(316.3)
55.0
Foreign
currency
translation
£m
Other and
non-cash
movements
£m
Other
operating cash
movements
£m
At
30 September
2022
£m
–
(8.9)
–
(8.9)
0.9
0.3
(6.9)
(5.7)
–
–
1.2
1.2
(158.8)
(67.9)
(48.0)
(274.7)
In relation to cash flows from financing activities that relate to equity, there were a number of share capital movements. Issue of share capital
decreased by £0.4m (2022: £0.1m) in the financial year due to the share buyback programme. £26.2m (2022: £8.8m) of the cash outflow has
been recognised within retained earnings. In the financial year, £3.9m (2022: £3.0m) of own shares were purchased and put into trust. These
have been recognised within the own share reserve.
Capital management
The Group manages its capital to ensure that entities in the Group will be able to trade on a going concern basis while maximising the return
to stakeholders through the optimisation of the debt and equity balance. The change in debt capital structure in the year is set out in the
Alternative Performance Measures and the change in equity is set out in Note 25. Invested capital is defined as the sum of all current and
non-current assets (including intangibles), less current and non-current liabilities with the exception of debt items, derivatives and retirement
benefit obligations. The invested capital of the Group at 29 September 2023 is £667.0m (2022: £689.2m). The Group monitors the Return on
Invested Capital of the Group as a Key Performance Indicator; the calculation is set out in the Alternative Performance Measures section on
page 181.
23. Provisions
Year ended 29 September 2023
At 30 September 2022
Provided in financial year
Utilised in financial year
Released in financial year
Unwind of discount to present value in the financial year
At 29 September 2023
Analysed as:
Non-current liabilities
Current liabilities
Leases
£m
Remediation
and closure
£m
Reorganisation
£m
4.8
0.3
–
–
0.1
5.2
1.4
1.2
(0.3)
–
–
2.3
2.5
–
(2.1)
–
–
0.4
Other
£m
1.2
1.0
–
(0.2)
–
2.0
2023
£m
6.9
3.0
9.9
Total
£m
9.9
2.5
(2.4)
(0.2)
0.1
9.9
2022
£m
5.2
4.7
9.9
Leases
Lease provisions consist of provisions for leasehold dilapidations in respect of certain leases, relating to the estimated cost of reinstating
leasehold premises to their original condition at the time of the inception of the lease as provided for in the lease agreement. It is anticipated
that these will be payable within 10 years.
Strategic Report | Directors’ Report | Financial Statements | Other Information 162 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
23. Provisions continued
Remediation and closure
Remediation and closure obligations were established to cover either a statutory, contractual or constructive obligation of the Group. The
majority of the obligation will unwind in one to five years.
Reorganisation
Reorganisation provisions consist of provisions for personnel exit costs arising from the Group’s Better Greencore change programme. The
provision will unwind in one year.
Other
Other provisions consist of potential litigation and warranty claims. On 29 September 2023 the Group completed the sale of the entire share
capital of Trilby Trading Limited and a provision was recognised for warranty claims associated with the disposal of this business; see Note 28
for further details. It is anticipated that these provisions will unwind in one to five years.
24. Retirement benefit obligations
The Group operates defined contribution pension schemes in all of its main operating locations. The Group also has legacy defined benefit
pension schemes, which were closed to future accrual on 31 December 2009.
Defined contribution pension schemes
The total cost charged to the Income Statement for the current financial year of £15.5m (2022: £14.1m) represents employer contributions
payable to the defined contribution pension schemes at rates specified in the rules of the schemes. At 29 September 2023, £2.2m (2022:
£2.2m) was included in other accruals in respect of defined contribution pension accruals.
Legacy defined benefit pension schemes
The Group operates one legacy defined benefit pension scheme and one legacy defined benefit commitment in Ireland (the ‘Irish schemes’)
and one legacy defined benefit pension scheme and one legacy defined benefit commitment in the UK (the ‘UK schemes’). The Projected
Unit Credit actuarial cost method has been employed in determining the present value of the defined benefit pension obligation, the related
current service cost and, where applicable, past service cost.
All of the legacy defined benefit pension schemes are closed to future accrual. Scheme assets are held in separate Trustee administered
funds. These plans have broadly similar regulatory frameworks. Responsibility for governance of the plans, including investment decisions and
contribution schedules, lies with the Company and the respective boards of Trustees.
The Group’s cash contributions to its pension schemes are generally determined by reference to actuarial valuations undertaken by the
schemes’ actuaries at intervals not exceeding three years and not by the provisions of IAS 19 Employee Benefits. These funding valuations can
differ materially from the requirements of IAS 19. In particular the discount rate used to determine the value of liabilities under IAS 19 Employee
Benefits is determined by reference to the yield at the year end date on high grade corporate bonds of comparable duration to the liabilities.
In contrast the discount rate used in the ongoing valuation is generally determined by reference to the yield on the scheme’s current and
projected future investment portfolio.
Where a funding valuation reveals a deficit in a scheme, the Group will generally agree a schedule of contributions with the Trustees designed
to address the deficit over an agreed future time horizon. A full actuarial valuation was carried out on the Irish scheme at 31 March 2022 and
a full actuarial valuation is ongoing with reference to 31 March 2023 for the UK scheme. All of the schemes are operating under the terms
of current funding proposals agreed with relevant pension authorities. Based on current discussions with the Trustees of the scheme cash
contributions are expected to be in the range of £12m–£15m in FY24.
In November 2022, the Trustees of the Irish legacy defined benefit scheme entered into an annuity buy-in transaction to purchase an
insurance policy for the pensioner liabilities, representing approximately 80% of the liabilities of the scheme. This has the benefit of de-risking
the future of the scheme. The insurance policy is treated as a plan asset and the fair value of the policy is determined to be the present value of
the related obligations. At the completion of the buy-in of the insurance policy, the Group recognised an actuarial loss in equity reflecting the
change in the value of the plan assets to match the related obligation.
2023
2022
UK schemes
£m
Irish schemes
£m
Total
£m
UK schemes
£m
Irish schemes
£m
159.4
(197.2)
(37.8)
9.5
(28.3)
145.4
(127.7)
17.7
(2.2)
15.5
304.8
(324.9)
(20.1)
7.3
(12.8)
168.7
(228.0)
(59.3)
14.8
(44.5)
170.3
(131.3)
39.0
(4.9)
34.1
163
Total
£m
339.0
(359.3)
(20.3)
9.9
(10.4)
–
(37.8)
18.4
(0.7)
18.4
(38.5)
–
(59.3)
39.8
(0.8)
39.8
(60.1)
Legacy defined benefit assets and liabilities
Fair value of plan assets
Present value of scheme liabilities
(Deficit)/surplus in schemes
Deferred tax asset/(liability) (Note 9)
Net (liability)/asset at end of financial year
Presented as:
Retirement benefit asset*
Retirement benefit obligation
* The value of a net pension benefit asset is the value of any amount the Group reasonably expects to recover by way of refund of surplus from the remaining assets of a
plan at the end of the plan’s life.
The International Financial Reporting Standards Interpretations Committee (‘IFRIC 14’) clarifies how the asset ceiling should be applied,
particularly how it interacts with local minimum funding rules. The Group has determined that it has an unconditional right to a refund of
surplus assets if the schemes are run off until the last member dies.
Movement in the fair value of plan assets
Change in fair value of plan assets
Fair value of plan assets at beginning of financial year
Interest income on plan assets
Actuarial loss
Administrative expenses paid from plan assets
Employer contributions
Benefit payments
Effect of exchange rate changes
Fair value of plan assets at end of financial year
Movement in the present value of legacy defined benefit obligations
Change in present value of scheme liabilities
Benefit obligation at beginning of financial year
Interest expense
Actuarial gain on financial assumptions
Actuarial (gain)/loss on experience
Actuarial gain on demographic assumptions
Administration costs included in defined benefit obligation for schemes in wind up
Benefit payments
Effect of exchange rate changes
Present value of scheme liabilities at end of financial year
2023
£m
339.0
15.0
(36.0)
(1.3)
12.4
(22.1)
(2.2)
304.8
2023
£m
359.3
16.2
(19.9)
(1.8)
(5.1)
–
(22.1)
(1.7)
324.9
2022
£m
481.3
7.3
(141.9)
(1.3)
12.6
(22.3)
3.3
339.0
2022
£m
527.3
8.4
(177.8)
21.5
–
(0.2)
(22.3)
2.4
359.3
Risks and assumptions
The legacy defined employee benefit plans expose the Group to a number of risks, the most significant of which are:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If assets underperform this
yield this will create a deficit. The plans hold assets which, though expected to outperform corporate bonds in the long term, create volatility
and risk in the short term. The allocation to assets is monitored to ensure that it remains appropriate given the plans’ long-term objectives.
Discount rates: The discount rates employed in determining the present value of the schemes’ liabilities are determined by reference to
market yields at the financial year end date on high-quality corporate bonds of a currency and term consistent with the currency and term of
the associated post-employment benefit obligations. Changes in discount rates impact the quantum of the liabilities.
Strategic Report | Directors’ Report | Financial Statements | Other Information 164 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
24. Retirement benefit obligations continued
Risks and assumptions continued
Inflation risk: Some of the Group’s pension obligations are linked to inflation; higher inflation will lead to higher liabilities (although in most
cases, caps on the level of inflationary increases are in place to protect the plan against extreme inflation). The rate of inflation is derived
from the relative yields of index-linked and fixed interest government bonds priced as of 29 September 2023 in the UK. The Irish inflation
assumption has been set based on market expectations at the reporting date which included consideration of the yield on long-term Irish
Government bonds.
Longevity risk: In the majority of cases, the Group’s legacy defined benefit pension schemes provide benefits for the life of the member, so
increases in life expectancy will therefore give rise to higher liabilities.
Climate change: The impact of climate change on mortality rates, particularly future mortality rates, has been considered and it has been
concluded that there is no impact in the current financial year. This will continue to be kept under review.
The size of the obligation is sensitive to judgemental actuarial assumptions. These include demographic assumptions covering mortality,
economic assumptions covering price inflation and benefit increases, together with the discount rate.
The principal actuarial assumptions are as follows:
Rate of increase in pension payments*
Discount rate
Inflation rate**
UK schemes
Irish schemes
2023
3.05%
5.60%
3.30%
2022
3.35%
5.00%
3.55%
2023
1.50%
4.50%
2.50%
2022
0.00%
4.00%
2.40%
* The rate of increase in pension payments applies to the majority of the liability base, however there are certain categories within the Group’s Irish schemes that have an
entitlement to pension indexation.
** The assumption for Retail Price Index (‘RPI’) and Consumer Price Index (‘CPI’) are derived from the Harmonised Index of Consumer Prices (‘HICP’) and relative yields of
index-linked and fixed interest government bonds.
Assumptions regarding future mortality experience are set based on information from published statistics and experience in all geographic
regions and are selected to reflect the characteristics and experience of the membership of the relevant plans. In relation to the UK, this has
been done by reflecting the characteristics of the membership using the demographic tables from S3PA YoB with CMI 2021 model for future
improvements in mortality. The average life expectancy, in years, of a pensioner retiring at 65 is as follows:
Male
Female
Sensitivity of pension liability to judgemental assumptions
Assumption
Discount rate
Discount rate
Rate of inflation
Rate of inflation
Rate of mortality
Change in assumption
Decrease by 0.5%
Increase by 0.5%
Decrease by 0.5%
Increase by 0.5%
Members assumed to live 1 year longer
Sensitivity of pension scheme assets to yield movements
Assumption
Change in bond yields
Change in assumption
Decrease by 0.5%
UK schemes
Irish schemes
2023
years
22
24
2022
years
22
24
2023
years
23
24
Impact on scheme liabilities
UK
schemes
£m
Irish
schemes
£m
13.5
(12.1)
(9.8)
11.1
4.7
6.3
(5.8)
(1.6)
1.8
5.5
Total
2023
£m
19.8
(17.9)
(11.4)
12.9
10.2
Impact on scheme assets
UK
schemes
£m
11.5
Irish
schemes
£m
6.2
Total
2023
£m
17.7
2022
years
23
24
Total
2022
£m
22.5
(20.3)
(16.5)
15.8
10.9
Total
2022
£m
21.5
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. The sensitivity analysis
intends to provide assistance in understanding the sensitivity of the valuation of pension liabilities to market movements on discount rates,
inflation rates and mortality assumptions for scheme beneficiaries and in understanding the sensitivity of the valuation of pension assets to
market movements on bond yields.
165
Hedging strategy
The Trustees invest the funds in a range of assets with the objective of maximising the fund return with a view to containing the cost of
funding the scheme whilst at the same time maintaining an acceptable risk profile. In assessing the risk profile the Trustees take account of the
nature and duration of the liabilities.
Plan assets are comprised as follows:
Cash
Debt instruments
Derivatives
Investment funds*
Insurance contract*
Fair value of plan assets
* A quoted market price in an active market is not available.
Quoted
£m
2.5
50.5
122.9
10.8
–
186.7
2023
Unquoted
£m
–
–
–
25.6
92.5
118.1
Total
£m
2.5
50.5
122.9
36.4
92.5
304.8
Quoted
£m
78.5
101.1
125.0
16.0
–
320.6
2022
Unquoted
£m
–
–
–
18.4
–
18.4
Total
£m
78.5
101.1
125.0
34.4
–
339.0
The primary UK scheme has Liability Driven Investment (‘LDI’) for 75% (2022: 67%) of the UK funds which aims to hedge 100% (relative to
assets) of the interest rate and inflation risk in the scheme. The hedging strategy is designed to reduce the schemes’ exposure to changes in
interest rates and inflation expectations, therefore, reducing funding level risk and volatility. The Trustees review investment strategy regularly.
There is no LDI for the Irish schemes (2022: 50%).
The Trustees of the primary scheme in Ireland, Greencore Group Pension Scheme (‘GGPS’) entered into a legally binding annuity contract in
November 2022 with an insurance company. This annuity policy covered all pensions in payment at that date. As the transaction was a ‘buy
in’ annuity contract the obligations to meet pension payments remain with the GGPS, therefore, the pension members covered under the
policy remain a liability of the Scheme. The annuity contract covers c.80% of the GGPS liabilities and provides an exact match for the pension
members cash flows secured, i.e. a perfect interest rate, inflation and longevity hedge. The only remaining risk borne by GGPS in respect
of these liabilities is the counterparty risk to the insurer and the remaining assets are held in cash and bonds with a view to limit interest and
inflation risk in respect of the deferred population.
The hedging on the UK schemes is provided via pooled fund manager funds which have specified limits on leverage.
Maturity analysis
The expected maturity analysis is set out in the table below:
Expected benefit payments:
Within 5 years
Between 6 and 10 years
Between 11 and 15 years
Between 16 and 20 years
Between 21 and 25 years
Over 25 years
UK schemes
% of benefits
Irish schemes
% of benefits
Total % of
benefits
10%
13%
15%
14%
13%
35%
27%
22%
17%
12%
8%
14%
17%
17%
16%
13%
11%
26%
The weighted average duration of the UK and Irish legacy defined benefit obligations are 14 years (2022: 18 years) and 10 years (2022: 11 years)
respectively.
Greencore Group Pension Scheme contingent asset
The primary scheme in Ireland, GGPS has a mortgage and charge relating to certain property assets of the Group with a carrying value of
£4.6m (2022: £3.1m) for use as a contingent asset of the GGPS. Under the terms of the mortgage and charge, should a disposal of these
property assets occur that meets certain requirements, the GGPS is entitled to a portion of the sale proceeds. The maximum amount
recoverable by the Trustees of the GGPS under the mortgage and charge is the amount required for the GGPS to meet the minimum funding
standard under the Pension Acts 1990-2009.
Pension funding partnership
In 2013, the Group entered into arrangements with the Greencore UK Legacy Defined Benefit Scheme (‘the UK Scheme’) to address £40.0m
of the actuarial deficit in the UK Scheme. The substance of this arrangement is to reduce the cash funding which would otherwise be required
based on the latest actuarial valuation, whilst improving the security of the UK Scheme members’ benefits.
Strategic Report | Directors’ Report | Financial Statements | Other Information 166 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
24. Retirement benefit obligations continued
Pension funding partnership continued
On 10 May 2013, the Group made a contribution to the UK Scheme of £32.8m. On the same day, the UK Scheme’s Trustees invested £32.8m
in Greencore Convenience Foods Limited Partnership (‘SLP’) as a limited partner. SLP was established by Greencore Prepared Meals Limited,
a wholly owned subsidiary of the Group, to hold properties of the Group and loan notes issued by Greencore Convenience Foods I Limited
Liability Partnership (‘LLP’). LLP was established by SLP and holds certain trade receivables of the Group. As at 29 September 2023, SLP held
properties with a carrying value of £14.8m (2022: £15.2m) and trade receivables with a carrying value of £36.0m (2022: £36.0m) in the Group
Financial Statements. The properties are leased to other Group undertakings. As a partner in the SLP, the UK Scheme is entitled to a semi-
annual share of the profits of SLP until 2029.
These partnerships are controlled by the Group, and as such, they are fully consolidated as wholly owned subsidiaries in accordance with
IFRS 10 Consolidated Financial Statements. Under IAS 19 Employee Benefits, the investment held by the Scheme in SLP, does not represent
a plan asset for the purposes of the Group’s Financial Statements. Accordingly, the UK Scheme’s deficit position presented in the Group
Financial Statements does not reflect the investment in SLP held by the UK Scheme. Distributions from SLP to the UK Scheme are treated as
contributions by employers in the Group Financial Statements on a cash basis.
25. Share capital
Authorised
1,000,000,000 Ordinary Shares of £0.01 each
500,000,000 Deferred Shares of €0.01 each
300,000,000 Deferred Shares of €0.62 each
1 Special Rights Preference Share of €1.26(A)
Issued and fully paid
483,453,842 (2022: 516,836,560) Ordinary Shares of £0.01 each
1 Special Rights Preference Share of €1.26(A)
Reconciliation of movements on equity share capital
Share capital, at beginning of financial year
Exercise of share options(B)
Share buyback and cancellation of shares(C)
Share capital, at end of financial year
2023
£m
10.0
4.3
160.1
–
174.4
2023
£m
4.8
–
4.8
2023
£’000
5,158
–
(334)
4,824
2022
£m
10.0
4.3
160.1
–
174.4
2022
£m
5.2
–
5.2
2022
£’000
5,255
–
(97)
5,158
(A) There is one Special Rights Preference Share of €1.26 in the capital of the Company. The Articles of Association provide that the Special Share may be held only by, or
transferred only to, the Minister for Agriculture, Food and the Marine or some other person appointed by the Minister. In 2011, many of the rights attaching to the Special
Share were abolished.
(B) No share options (2022: 18,575) granted under the ShareSave Scheme were exercised in the financial year. Exercises in the previous financial year were at a nominal value
of £0.0002m. See Note 6.
(C) 33,382,718 Ordinary Shares in the Company were repurchased in the current financial year and immediately cancelled (2022: 9,728,677). The shares which had a nominal
value £0.334m (2022: £0.097m) were purchased for £26.2m (2022: £8.8m).
All shares, with the exception of the Special Rights Preference Share, carry equal voting rights and rank for dividends to the extent to which the
total amount payable in each share is paid up.
Prior consent of the holder of the Special Share is required in the event that there is a proposal for the voluntary winding up or dissolution
of the Company or if there is any proposed sale, transfer or disposal of the Company’s subsidiary, Irish Sugar Designated Activity Company.
The holder of the Special Share is only entitled to a repayment of the capital paid up on the Special Share (€1.26) and has no further right to
participate in the profits of the Company or any entitlement to dividend.
Own share reserve:
At beginning of financial year
Shares acquired by Employee Benefit Trust
Transferred to beneficiaries of the share scheme
At end of financial year
Number of shares
Nominal value of shares
Total own share reserve
2023
number
2022
number
2,877,009
5,688,856
(1,540,738)
986,837
2,180,216
(290,044)
7,025,127
2,877,009
2023
£
0.029
0.057
(0.015)
0.071
2022
£
0.010
0.022
(0.003)
0.029
2023
£m
4.4
3.9
(1.9)
6.4
2022
£m
1.8
3.0
(0.4)
4.4
At 29 September 2023, 1.5% of share capital is held in this reserve (30 September 2022: 0.6%).
26. Working capital movement
The following represents the Group’s working capital movement:
Inventories
Trade and other receivables
Trade and other payables
27. Capital expenditure commitments
The table below includes the capital commitments for the Group as at 29 September 2023 and 30 September 2022:
Capital expenditure that has been contracted but not been provided for
Capital expenditure that has been authorised by the Directors but not yet contracted
167
2022
£m
(15.6)
(52.6)
70.2
2.0
2022
£m
8.7
10.5
19.2
2023
£m
(9.6)
2.7
9.1
2.2
2023
£m
9.1
7.2
16.3
28. Disposal of undertakings
Trilby Trading Limited
On 29 September 2023, the Group completed the sale of the entire share capital of Trilby Trading Limited (‘Trilby’) to K.T.C. (Edibles) Limited, a
majority owned subsidiary of funds managed by Endless LLP. Trilby is an importer and distributor of edible oils and fats for the food processing
industry, operating out of Ireland. From a sustainability perspective, the Group’s disposal of Trilby is expected to result in the removal of circa
280,000 tonnes of carbon dioxide equivalents (CO2e) from the Group’s FY24 Scope 3 footprint. This accounts for 20% of the Group’s total
Scope 3 footprint in FY23 and a 32% reduction in the base year.
The business is not considered to be a separate major line of business or geographical area of operation and therefore does not constitute
a discontinued operation as defined in IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations. Trilby is included within the
Convenience Foods UK and Ireland reporting segment.
Effect of disposal on the financial statements
Goodwill and intangible assets
Property, plant and equipment
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Derivative financial Instruments
Total assets and liabilities disposed of
Disposal consideration
Purchase consideration
Working capital settlement
Total net consideration
Disposal-related costs
Translation reserve transferred to Income Statement on disposal of subsidiary
Profit on disposal
Reconciliation of consideration to cash received
Purchase consideration
Cash received in respect of working capital settlement
Transaction costs paid
Net consideration received on completion
Cash and cash equivalents disposed of
Net cash inflow arising on disposal
2023
£m
(2.0)
(0.4)
(11.5)
(5.1)
8.1
0.1
(10.8)
8.5
2.8
11.3
(1.0)
0.6
0.1
2023
£m
8.5
2.8
(0.1)
11.2
(5.1)
6.1
Strategic Report | Directors’ Report | Financial Statements | Other Information 168 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
29. Contingencies
The Company and certain subsidiaries have given guarantees in respect of borrowings and other obligations arising in the ordinary course of
business of the Company and other Group undertakings. The Company treats these guarantee contracts as contingent liabilities until such
time as it becomes probable that a payment will be required under such guarantees.
Pursuant to the provisions of Section 357, Companies Act 2014, the Company has guaranteed the liabilities of certain subsidiary undertakings
in Ireland for the financial year ended 29 September 2023 and as a result, such subsidiary undertakings have been exempted from the filing
provisions of Companies Act 2014. See Note 31 for the list of these subsidiary entities.
Greencore have two letters of credit (‘LoCs’) in place to satisfy our insurers’ collateral requirements for Employers Liability and Motor Self-
Insured Programs for an amount of £5.5m (2022: £4.6m). The insurers are responsible for paying out on these claims but recovers quarterly
from Greencore. The LoCs reduce the insurers credit exposure during the period between the claim payout and subsequent recovery from
Greencore.
30. Related party disclosures
The principal related party relationships requiring disclosure in the Group Financial Statements under IAS 24 Related Party Disclosures pertain
to the existence of subsidiaries and associates and transactions with these entities entered into by the Group, as well as the identification and
compensation of key management personnel, as addressed in greater detail below.
Subsidiaries
The Group Financial Statements include the Financial Statements of the Company (Greencore Group plc, the ultimate parent) and its
subsidiaries. A listing of the principal subsidiaries is provided in Note 31 to the Group Financial Statements.
Sales to and purchases from, together with outstanding payables and receivables to and from, subsidiaries, are eliminated in the preparation of
the Group Financial Statements in accordance with IFRS 10 Consolidated Financial Statements.
Key management personnel
For the purposes of the disclosure requirements of IAS 24 Related Party Disclosures, the term ‘Key Management Personnel’ (i.e. those persons
having the authority and responsibility for planning, directing and controlling the activities of the Company), comprise the Board of Directors
which manages the business and affairs of the Group.
Key management personnel compensation was as follows:
Salaries, fees and other short-term employee benefits
Post-employment benefits – defined contribution costs
Share-based payments*
2023
£m
2.8
0.1
0.6
3.5
2022
£m
2.0
0.1
–
2.1
* This is the Income Statement charge for the financial year which represents the fair value of the share-based payments, relating to Executive Directors. Details of the
Group’s share-based payments and the basis of calculation are set out in Note 6. This differs from the amount included in the single total figure for remuneration
included in the Directors’ Report which is not an IFRS metric.
169
31. Principal subsidiary undertakings
Name of undertaking
Nature of business
Percentage share
Registered office
Greencore Advances Designated Activity
Company(A)(C)
Finance Company
Greencore Beechwood Limited(A)(D)
Holding Company
Greencore Convenience Foods Limited
Partnership(B)(D)
Pension Funding
Greencore Convenience Foods I Limited Liability
Partnership(B)(D)
Pension Funding
Greencore Developments Designated Activity
Company(A)(C)
Property Company
Greencore Finance Designated Activity
Company(A)(C)
Finance Company
Greencore Foods Limited(A)(D)
Holding and Management
Services Company
Greencore Food to Go Limited(A)(D)
Food Processor
Greencore Funding Limited(A)(E)
Finance Company
Greencore Grocery Limited(A)(D)
Food Processor
Greencore Prepared Meals Limited(A)(D)
Food Processor
100
100
100
100
100
100
100
100
100
100
100
Greencore UK Holdings Limited(A)(D)
Holding Company
100
Hazlewood Foods Limited(A)(D)
Holding Company
100
Irish Sugar Designated Activity Company(A)(C)
General Trading Company
100
(A) These companies are all ultimately held 100% by Greencore Group plc. Each of the shares held are Ordinary Shares.
(B) These companies are partnerships and the interests held represents interests in member capital.
(C) These companies are registered in Ireland and are availing of the exemption as set out in s.357 of the Companies Act 2014.
(D) These companies are registered in the UK.
(E) This company is registered in Jersey.
No. 2 Northwood Avenue,
Northwood Business Park, Santry,
Dublin 9, D09 X5N9
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
1 George Square,
Glasgow,
United Kingdom, G2 1AL
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
No. 2 Northwood Avenue,
Northwood Business Park, Santry,
Dublin 9, D09 X5N9
No. 2 Northwood Avenue,
Northwood Business Park, Santry,
Dublin 9, D09 X5N9
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
IFC 5, St. Helier,
Jersey, JE1 1ST
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
Greencore Manton Wood,
Retford Road,
Manton Wood Enterprise Park,
Worksop, S80 2RS
No. 2 Northwood Avenue,
Northwood Business Park, Santry,
Dublin 9, D09 X5N9
Strategic Report | Directors’ Report | Financial Statements | Other Information 170 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Group Financial Statements continued
financial year ended 29 September 2023
32. Subsequent events
Bank refinancing
Subsequent to the financial year end, the Group has refinanced its debt facilities with a new five-year £350m sustainability-linked revolving
credit facility (‘RCF’), maturing in November 2028 with the option to extend for up to a further two years. This new facility replaces the existing
£340m RCF that was due to mature in January 2026. A £45m term loan due to mature in June 2024 was also repaid in full as part of this debt
restructuring.
33. Board approval
The Group Financial Statements, together with the Company Financial Statements, for the financial year ended 29 September 2023 were
approved by the Board of Directors and authorised for issue on 27 November 2023.
Company Statement of Financial Position
at 29 September 2023
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Financial assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Capital and reserves
Share capital
Share premium
Undenominated capital reserve
Other reserves
Retained Earnings
Total equity
LIABILITIES
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Current liabilities
Bank overdraft
Lease liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Total equity and liabilities
Company only loss for the financial year was £5.6m (2022: loss of £4.8m).
Leslie Van de Walle
Director
Dalton Philips
Director
171
Notes
2023
£m
2022
£m
2
3
4
5
6
5
0.2
0.1
0.3
765.1
765.7
3.4
0.2
3.6
0.4
0.3
0.4
766.6
767.7
3.6
0.1
3.7
769.3
771.4
4.8
89.7
120.9
(2.3)
118.9
332.0
–
1.1
1.1
46.2
0.2
388.9
0.9
436.2
437.3
769.3
5.2
89.7
120.5
(0.6)
149.3
364.1
0.2
0.6
0.8
5.8
0.3
399.8
0.6
406.5
407.3
771.4
Strategic Report | Directors’ Report | Financial Statements | Other Information
172 Greencore Group plc Annual Report and Financial Statements 2023
Company Statement of Changes in Equity
financial year ended 29 September 2023
At 30 September 2022
Total comprehensive income for the financial year
Loss for the financial year
Total comprehensive income for the financial year
Transactions with equity holders of the Company
Contributions and distributions
Employee share-based payment expense
Exercise, forfeit or lapse of share-based payments
Shares acquired by Employee Benefit Trust(A)
Transfer to retained earnings on grant of shares
to beneficiaries of the Employee Benefit Trust(B)
Capital return via share buyback(C)
Total transactions with equity holders of
the Company
At 29 September 2023
At 24 September 2021
Total comprehensive income for the financial year
Loss for the financial year
Total comprehensive income for the financial year
Transactions with equity holders of the Company
Contributions and distributions
Employee share-based payment expense
Exercise, forfeit or lapse of share-based payments
Shares acquired by Employee Benefit Trust(A)
Transfer to retained earnings on grant of shares
to beneficiaries of the Employee Benefit Trust(B)
Capital return via share buyback(C)
Total transactions with equity holders of
the Company
At 30 September 2022
Share
capital
£m
Share
premium
£m
Undenominated
capital
reserve(D)
£m
Share-
based
payment
reserve(E)
£m
Own share
reserve(F)
£m
Retained
earnings
£m
Total
equity
£m
5.2
89.7
120.5
3.8
(4.4)
149.3
364.1
–
–
–
–
–
–
(0.4)
(0.4)
4.8
–
–
–
–
–
–
–
–
89.7
–
–
–
–
–
–
0.4
0.4
120.9
–
–
3.6
(3.3)
–
–
–
0.3
4.1
–
–
–
–
(3.9)
1.9
–
(2.0)
(6.4)
(5.6)
(5.6)
–
3.3
–
(5.6)
(5.6)
3.6
–
(3.9)
(1.9)
(26.2)
–
(26.2)
(24.8)
118.9
(26.5)
332.0
Share
capital
£m
Share
premium
£m
Undenominated
capital
reserve(D)
£m
Share-
based
payment
reserve(E)
£m
Own share
reserve(F)
£m
Retained
earnings
£m
5.3
89.7
120.4
3.6
(1.8)
160.5
–
–
–
–
–
–
(0.1)
(0.1)
5.2
–
–
–
–
–
–
–
–
89.7
–
–
–
–
–
–
0.1
0.1
120.5
–
–
3.0
(2.8)
–
–
–
0.2
3.8
–
–
–
–
(3.0)
0.4
–
(2.6)
(4.4)
Total
equity
£m
377.7
(4.8)
(4.8)
3.0
–
(3.0)
–
(8.8)
(4.8)
(4.8)
–
2.8
–
(0.4)
(8.8)
(6.4)
(8.8)
149.3
364.1
(A) Pursuant to the terms of the Employee Benefit Trust 5,688,856 shares (2022: 2,180,216) were purchased during the financial year ended 29 September 2023 for a cash
cost of £3.9m (2022: £3.0m). Further details are set out in Note 25 to the Group Financial Statements.
(B) During the financial year, 1,540,738 (2022: 290,044) shares with a nominal value at the date of transfer of £0.015m (2022: £0.0029m) at a cost of £1.9m (2022: £0.4m)
were transferred to beneficiaries of the Annual Bonus Plan and the Employee Share Incentive Plan. Further details are set out in Note 25 to the Group Financial
Statements.
(C) During the financial year, the Company, Greencore Group plc purchased and subsequently cancelled 33,382,718 Ordinary Shares (2022: 9,728,677) for a total cash cost
of £26.2m (2022: £8.8m) as part of the share buyback programme. Further details are set out in Note 25 to the Group Financial Statements.
(D) The undenominated capital reserve represents the nominal cost of cancelled shares and the amount transferred to reserves as a result of renominalising the share capital
of Greencore Group plc on conversion to the euro.
(E) The share-based payment reserve relates to equity settled share-based payments made to employees through the Performance Share Plan, the Annual Bonus Plan, the
ShareSave Scheme, the Employee Share Incentive Plan and the Restricted Share Plan. Further information in relation to these share-based payments schemes is set out in
Note 8.
(F) The amount included as own shares relates to Ordinary Shares in Greencore Group plc which are held in trust. The shares held in trust are granted to beneficiaries of the
Group’s employee share award scheme when the relevant conditions of the scheme are satisfied.
173
Notes to the Company Financial Statements
financial year ended 29 September 2023
1. Company only Statement of accounting policies
Basis of preparation
The Company only Financial Statements of Greencore Group plc (‘the Company’) were prepared under the historical cost convention, in
accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’). In preparing these Financial Statements, the
Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the
EU (‘Adopted IFRSs’) but makes amendments where necessary in order to comply with the Companies Act 2014 and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken.
In these Company Financial Statements, the Company has applied the exemptions available under FRS 101 in respect of the following
disclosures:
• A Cash Flow Statement and related notes;
• Disclosures in respect of transactions with wholly owned subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs; and
• Disclosures in respect of the compensation of Key Management Personnel.
As the Consolidated Financial Statements of the Group are prepared in accordance with IFRS as adopted by the EU and include the equivalent
disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:
• Certain disclosures required by IFRS 2 Share Based Payments;
• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instruments: Disclosures;
• Certain disclosures required by IFRS 16 Leases.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial
statements. The Company applies consistent accounting policies for measurement and recognition purposes under FRS 101 to those applied
by the Group. To the extent that an accounting policy is relevant to both Group and the Company financial statements, please refer to the
Group Financial Statements for disclosure of the relevant accounting policy.
The Company Financial Statements have been prepared in sterling and are rounded to the nearest million.
Going concern
Notwithstanding the fact that the Company is in a net current liability position of £432.6m (FY22: £402.8m), the Directors, after making
enquiries and considering the scenario analysis that was performed as part of the Group’s going concern assessment, have a reasonable
expectation that the Company has adequate resources to continue operating as a going concern for the foreseeable future, being a period
of 18 months from the financial year end date. The Company’s funding facilities are managed centrally by the Group and the Directors have
taken steps to ensure adequate liquidity is available to the Company from future cashflows generated by the Company and Group. The
Directors are satisfied that financing could be obtained from other Greencore Group companies if required. As the Company participates in
Group funding arrangements with the Group’s external bankers and as part of these arrangements, the Company, along with other members
of the Greencore Group, has provided guarantees in relation to the payment of borrowings of the Group from several banks, the performance
of Greencore Group is also important in determining the appropriateness of the going concern of the Company. Accordingly, the financial
statements of the Company are prepared on a going concern basis.
Significant accounting judgements
Interest in subsidiary undertakings
The Company considered the judgements made in determining whether there is an impairment in the interest in subsidiary undertakings to
be its significant accounting judgement. The Company compares the carrying value of the investment with its recoverable amount, with the
recoverable amount being the higher of the investment’s fair value less costs to sell and its value in use (‘VIU’).
For subsidiaries which have an interest in the Convenience Foods UK Cash Generating Unit (‘CGU’), a VIU is calculated as the present value of
expected future cash flows from the CGU as set out in the Group goodwill impairment testing in Note 12 to the Group Financial Statements,
and adjusted to derive its entity value. This is compared to the carrying value of the subsidiary to consider whether an impairment is required.
For subsidiaries which do not have an interest in the Convenience Foods UK CGU, the total net assets of those subsidiaries are compared to
the investment carrying value to consider whether an impairment is required.
Applying these techniques, the Company recognised an impairment in the current financial year of £1.5m (2022: £Nil).
Profit or loss
The loss attributable to equity shareholders dealt with in the Company Financial Statements was £5.6m (2022: loss of £4.8m).
In accordance with Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its individual Income
Statement to the Annual General Meeting and from filing it with the Registrar of Companies.
Strategic Report | Directors’ Report | Financial Statements | Other Information 174 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Company Financial Statements continued
financial year ended 29 September 2023
1. Company only Statement of accounting policies continued
Financial assets
Investments in subsidiaries are held at cost less impairment. The Company assesses investments for impairment whenever events or changes
in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the
Company makes an estimate of its recoverable amount. When the carrying amount of an investment exceeds its recoverable amount, the
investment is considered impaired and is written down to its recoverable amount.
Trade and other receivables
Trade and other receivables, which primarily comprise inter-company receivables, are initially recognised at their transaction value and
subsequently carried at amortised cost, net of allowance for expected credit loss (‘ECL’).
The Company’s inter-company receivables at 29 September 2023 amounted to £2.0m (2022: £1.2m). There is no material ECL in respect of
inter-company receivables as at 29 September 2023 or 30 September 2022.
Trade and other payables
Trade and other payables are initially recorded at their fair value and subsequently carried at amortised cost.
Intra-Group guarantees
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its Group, the
Company accounts for these as a contingent liability until such time as it becomes probable that a payment will be required under such
guarantees.
2. Financial assets
At 30 September 2022
Impairment loss
At 29 September 2023
Interest in
subsidiary
undertakings
£m
766.6
(1.5)
765.1
Total
£m
766.6
(1.5)
765.1
At 29 September 2023, the recoverable value of investment in subsidiaries was assessed for impairment in line with the requirements of IAS 36
Impairment of Assets.
The recoverable value of the interest in subsidiary undertakings has been determined either based on the total net assets of the subsidiary or a
Value in Use (‘VIU’) calculation adjusted to derive equity value using cash flow projections, long-term growth rate and discount rates as set out
below:
(i) Cash flow projections
The cash flow projections are based on the FY24 budget, which has been approved by the Board, and a two-year strategic plan, which
specifically excludes incremental profits and other cash flows stemming from any potential future acquisitions or future operational
restructuring. The cash flows involved judgements to determine the appropriate level of expected cash flows over the three-year forecast
period and these were subject to review and validation at a number of levels of governance.
(ii) Long-term growth rate
A long-term growth rate of 2% has been used in extrapolating the cash flows beyond the budget and strategic plan period to perpetuity. The
growth rate does not exceed the long-term average growth rate for industries in which the UK Convenience Foods Cash Generating Unit
(‘CGU’) operates.
(iii) Discount rate
The discount rate applied is based on the pre-tax weighted average cost of capital for the Group, calculated using the Capital Asset Pricing
Model adjusted for the Group’s specific beta coefficient together with a country risk premium to take account where the CGU derives its
cashflows.
Applying these techniques, the Company recognised an impairment loss of £1.5m (2022: £Nil).
The principal holding subsidiaries of the Company are Greencore Holdings Designated Activity Company (100% ownership of which 74% is
held directly by the Company and 26% indirectly in Ordinary Shares) and Greencore Holdings (Ireland) Limited (100% ownership of Ordinary
Shares) which are all incorporated in Ireland. Irish Sugar Designated Activity Company, incorporated in Ireland, is the Company’s principal
general trading subsidiary in Ireland and the Company holds 100% ownership of Ordinary Shares.
3. Trade and other receivables
Amounts falling due within one year
Amounts owed by subsidiary undertakings*
Other debtors
Prepayments and accrued income
* Amounts due from subsidiary undertakings are classified as current and are repayable on demand.
4. Share capital
Details in respect of called-up share capital are presented in Note 25 to the Group Financial Statements.
5. Provisions
At 30 September 2022
Provided in financial year
Released in financial year
At 29 September 2023
Analysed as:
Non-current liabilities
Current liabilities
175
2022
£m
1.2
1.9
0.5
3.6
Total
£m
1.2
1.0
(0.2)
2.0
2022
£m
0.6
0.6
1.2
2023
£m
2.0
1.1
0.3
3.4
2023
£m
1.1
0.9
2.0
Provisions consist of warranties and provisions for legal costs of £1.7m, with £0.5m being provided for in the current year as a result of the
disposal of Trilby Trading Limited (a wholly owned subsidiary of the Group). It is anticipated that these provisions will unwind in one to five
years. Also in the current financial year, £0.3m was provided for in respect of a lease provision for dilapidation repairs. It is anticipated that this
provision will unwind in one year.
6. Trade and other payables
Amounts falling due within one year
Amounts owed to subsidiary undertakings*
Trade and other creditors
Accruals
2023
£m
379.2
1.3
8.4
388.9
2022
£m
389.1
3.3
7.4
399.8
* Amounts due to subsidiary undertakings are classified as current and are repayable on demand.
7. Employee benefits
The Company operates a defined contribution pension scheme. The Company also participates in a legacy defined benefit pension scheme
operated by a subsidiary company, Irish Sugar DAC, which was closed to future accrual on 31 December 2009.
Defined benefit pension scheme
A fellow Group company, Irish Sugar DAC, operates a funded defined benefit pension scheme for its employees, including certain employees
of the Company. The scheme assets are held in separate Trustee administered funds.
This scheme had a net surplus at 29 September 2023 of £18.4m (2022: £39.8m) as measured on a IAS 19 Employee Benefits basis. The
contribution for the financial year was £Nil (2022: £Nil). At year end, £Nil (2022: £Nil) was included in other accruals in respect of amounts
owed to the scheme. A full actuarial valuation was carried out at 31 March 2022.
Disclosures in relation to this and all other Group legacy defined benefit pension schemes are given in Note 24 to the Group Financial
Statements.
Strategic Report | Directors’ Report | Financial Statements | Other Information 176 Greencore Group plc Annual Report and Financial Statements 2023
Notes to the Company Financial Statements continued
financial year ended 29 September 2023
7. Employee benefits continued
Defined contribution pension scheme
The Company also contributes to a defined contribution scheme for its employees. At year end, £Nil (2022: £Nil) was included in other
accruals in respect of amounts owed to the scheme.
The average number of persons employed by the Company (excluding Non-Executive Directors) was 21 (FY22: 23) and the staff costs for the
financial year for those employees were:
Wages and salaries
Social insurance costs
Employee share-based payment expense
Pension costs – defined contribution plans
2023
£m
3.8
0.3
0.8
0.2
5.1
2022
£m
3.9
0.3
0.0
0.3
4.5
No employee costs were capitalised in the financial year (2022: £Nil).
8. Share-based payments
The Company grants share awards and options under various share option plans as detailed in the Directors’ Report. A charge of £0.8m (2022:
£0.0m) was recognised in the Income Statement of the Company in respect of the employees of the Company. All disclosures relating to the
plans are given in Note 6 to the Group Financial Statements.
9. Guarantees and commitments
Pursuant to the provisions of Section 357, Companies Act 2014, the Company has guaranteed the liabilities and commitments of certain
subsidiary undertakings in Ireland for the financial year ended 29 September 2023. See Note 31 to the Group Financial Statements for the list
of these subsidiary entities.
Where the Company has entered into financial guarantee contracts to guarantee the indebtedness of such subsidiaries, the Company
treats these guarantee contracts as contingent liabilities until such time as it becomes probable that a payment will be required under such
guarantees. See Note 31 to the Group Financial Statements for the list of these subsidiary entities.
10. Statutory information
Directors’ remuneration is disclosed in the Report on Directors’ Remuneration and in Note 4 to the Group Financial Statements.
As disclosed in Note 4 to the Group Financial Statements, Auditor’s remuneration for the financial year was as follows:
Fees charged by the statutory audit firm:
Audit of the Group and subsidiaries financial statements
Audit of the Company financial statements
Tax advisory services
Other assurance services
Non-audit services
2023
£000
882
47
–
25
–
2022
£000
797
42
–
25
–
177
Alternative Performance Measures
The Group uses the following Alternative Performance Measures (‘APMs’) which are non-IFRS measures to monitor the performance of its
operations and of the Group as a whole: Pro Forma Revenue Growth, Adjusted EBITDA, Adjusted Operating Profit, Adjusted Operating Margin,
Adjusted Profit Before Tax (‘PBT’), Adjusted Earnings, Adjusted Earnings per Share (‘EPS’), Maintenance and Strategic Capital Expenditure, Free
Cash Flow, Free Cash Flow Conversion, Net Debt, Net Debt excluding lease liabilities and Return on Invested Capital (‘ROIC’). There have been
no adjustments made to existing APMs being reported and no new APMs have been included in this report.
The Group views these APMs as useful for providing historical information to help investors evaluate the performance of the underlying
business and are measures commonly used by certain investors and security analysts for evaluating the performance of the Group. In addition,
the Group uses certain APMs which reflect the underlying performance of the business on the basis that this provides a focus on the core
business performance of the Group. The APMs are not part of the IFRS financial statements and are accordingly are not audited.
Summarised below are the Group’s APMs for the financial years presented:
Pro Forma Revenue Growth
Adjusted Operating Profit
Adjusted Operating Margin
Adjusted EBITDA
Adjusted Profit Before Tax
Adjusted Earnings
Adjusted Basic Earnings per Share
Strategic Capital Expenditure
Maintenance Capital Expenditure
Free Cash Flow
Free Cash Flow Conversion
Net Debt
Net Debt excluding lease liabilities
Return on Invested Capital
2023
2022
13.5%
£76.3m
4.0%
£132.8m
£58.1m
£46.2m
9.3p
£10.8m
£26.6m
£56.8m
42.8%
(£199.0m)
(£154.0m)
8.9%
29.4%
£72.2m
4.2%
£126.9m
£59.8m
£48.1m
9.2p
£33.1m
£16.9m
£58.7m
46.3%
(£228.0m)
(£180.0m)
8.4%
Pro Forma Revenue Growth
The Group uses Pro Forma Revenue Growth as a supplemental measure of its performance. The Group views Pro Forma Revenue Growth as
providing a guide to underlying revenue performance and is calculated by adjusting reported revenue for the impact of acquisitions, disposals
and foreign currency.
Pro Forma Revenue Growth FY23
Pro Forma Revenue Growth adjusts reported revenue in FY23 and FY22 to reflect the disposal of Trilby Trading Limited, which completed in
FY23. In addition, FY22 revenue has been adjusted for the additional trading week which was included in H2 FY22.
Reported revenue – % increase from FY22 to FY23
Impact of disposals
Impact of additional trading week
Pro Forma Revenue Growth FY23
2023
Convenience Foods
UK and Ireland
10.0%
1.0%
2.5%
13.5%
The table below shows the Pro Forma Revenue Growth split by food to go categories and other convenience categories.
Reported revenue – % increase from FY22 to FY23
Impact of disposals
Impact of additional trading week
Pro Forma Revenue Growth FY23
Food to go categories
Other convenience categories
H1 FY23
H2 FY23
Full year
H1 FY23
H2 FY23
Full year
15.6%
–
–
15.6%
2.0%
–
3.7%
5.7%
7.9%
–
2.2%
10.1%
28.5%
2.8%
–
31.3%
2.0%
6.8%
3.7%
12.5%
14.3%
4.2%
3.1%
21.6%
Strategic Report | Directors’ Report | Financial Statements | Other Information 178 Greencore Group plc Annual Report and Financial Statements 2023
Alternative Performance Measures continued
Pro Forma Revenue Growth continued
Pro Forma Revenue Growth FY22
While Pro Forma Revenue Growth is not comparable year-on-year, we have included the prior year disclosure for completeness. This has
been calculated to reflect the disposal of Premier Molasses Company Limited for the period in FY21 up to the date of disposal. As FY22 was a
53 week period, Pro Forma Revenue adjusts the FY22 reported revenue to exclude the additional revenue. It also presents the revenue on a
constant currency basis utilising FY21 foreign exchange rates on FY22 reported revenue.
Reported revenue – % increase from FY21 to FY22
Impact of disposals
Impact of currency
Impact of additional trading week
Pro Forma Revenue Growth FY22
2022
Convenience Foods
UK and Ireland
31.3%
0.4%
0.2%
(2.5%)
29.4%
The table below shows the Pro Forma Revenue Growth split by food to go categories and other convenience categories.
Reported revenue – % increase from FY21 to FY22
Impact of disposals
Impact of currency
Impact of additional trading week
Pro Forma Revenue Growth FY22
Food to go categories
Other convenience categories
H1 FY22
H2 FY22
Full year
H1 FY22
H2 FY22
Full year
48.0%
–
–
–
48.0%
31.1%
–
–
(4.6%)
26.5%
37.9%
–
–
(2.7%)
35.2%
12.9%
2.0%
0.9%
–
15.8%
26.5%
–
0.2%
(4.2%)
22.5%
19.8%
1.0%
0.6%
(2.2%)
19.2%
Adjusted EBITDA, Adjusted Operating Profit and Adjusted Operating Margin
Adjusted EBITDA, Adjusted Operating Profit and Adjusted Operating Margin are used by the Group to measure the underlying and ongoing
operating performance of the Group.
The Group calculates Adjusted Operating Profit as Operating Profit before amortisation of acquisition-related intangibles and exceptional
items. Adjusted EBITDA is calculated as Adjusted Operating Profit plus depreciation and amortisation of intangibles assets. Adjusted Operating
Margin is calculated as Adjusted Operating Profit divided by reported revenue.
The following table sets forth a reconciliation from the Group’s profit for the financial year to Adjusted Operating Profit, Adjusted EBITDA and
Adjusted Operating Margin:
Profit for the financial year
Taxation(A)
Exceptional items
Net finance costs(B)
Amortisation of acquisition-related intangibles
Adjusted Operating Profit
Depreciation and amortisation(C)
Adjusted EBITDA
Adjusted Operating Margin
(A) Includes tax credit on exceptional items of £1.2m (2022: £3.0m).
(B) Finance costs less finance income.
(C) Excludes amortisation of acquisition-related intangibles.
2023
£m
35.9
9.3
6.7
20.8
3.6
76.3
56.5
132.8
4.0%
2022
£m
32.3
7.5
16.5
12.3
3.6
72.2
54.7
126.9
4.2%
179
Adjusted Profit Before Tax (‘PBT’)
Adjusted PBT is used as a measure by the Group to measure overall performance before associated tax charge and other specific items.
The Group calculates Adjusted PBT as profit before taxation, excluding tax on share of profit of associate and before exceptional items,
pension finance items, amortisation of acquisition related-intangibles, FX on inter-company and certain external balances, and the movement
in the fair value of all derivative financial instruments and related debt adjustments.
The following table sets out the calculation of Adjusted PBT:
Profit before taxation
Exceptional items
Pension finance items
Amortisation of acquisition-related intangibles
FX and fair value movements(A)
Adjusted Profit Before Tax
2023
£m
45.2
6.7
1.2
3.6
1.4
58.1
2022
£m
39.8
16.5
1.1
3.6
(1.2)
59.8
(A) FX effects on inter-company and certain external balances and the movement in the fair value of all derivative financial instruments and related debt adjustments.
Adjusted Basic Earnings per Share (‘EPS’)
The Group uses Adjusted Earnings and Adjusted EPS as key measures of the overall underlying performance of the Group and returns
generated for each share.
Adjusted Earnings is calculated as profit attributable to equity holders (as shown on the Group Income Statement) adjusted to exclude
exceptional items (net of tax), the effect of foreign exchange (FX) on inter-company and external balances where hedge accounting is not
applied, the movement in the fair value of all derivative financial instruments and related debt adjustments, the amortisation of acquisition-
related intangible assets (net of tax) and the interest expense relating to legacy defined benefit pension liabilities (net of tax). Adjusted EPS
is calculated by dividing Adjusted Earnings by the weighted average number of Ordinary Shares in issue during the financial year, excluding
Ordinary Shares purchased by Greencore and held in trust in respect of the Annual Bonus Plan, Performance Share Plan, Employee Share
Incentive Plan and Restricted Share Plan. Adjusted EPS described as an APM here is Adjusted Basic EPS.
The following table sets forth a reconciliation of the Group’s profit attributable to equity holders of the Group to its Adjusted Earnings for the
financial years indicated:
Profit attributable to equity holders
Exceptional items (net of tax)
FX effect on inter-company and external balances where hedge accounting is not applied
Movement in fair value of derivative financial instruments and related debt adjustments
Amortisation of acquisition-related intangible assets (net of tax)
Pension financing (net of tax)
Adjusted Earnings
2023
£m
35.9
5.5
0.2
1.2
2.7
0.7
46.2
2023
‘000
2022
£m
32.3
13.5
0.7
(1.9)
2.7
0.8
48.1
2022
‘000
Weighted average number of Ordinary Shares in issue during the financial year
495,372
523,382
Adjusted Basic Earnings per Share
Pence
9.3
Pence
9.2
Strategic Report | Directors’ Report | Financial Statements | Other Information 180 Greencore Group plc Annual Report and Financial Statements 2023
Alternative Performance Measures continued
Capital expenditure
Maintenance Capital Expenditure
The Group defines Maintenance Capital Expenditure as the expenditure required for the purpose of sustaining the operating capacity and
asset base of the Group, and of complying with applicable laws and regulations. It includes continuous improvement projects of less than
£1.0m that will generate additional returns for the Group.
Strategic Capital Expenditure
The Group defines Strategic Capital Expenditure as the expenditure required for the purpose of facilitating growth and developing and
enhancing relationships with existing and new customers. It includes continuous improvement projects of greater than £1.0m that will
generate additional returns for the Group. Strategic Capital Expenditure is generally expansionary expenditure creating additional capacity
beyond what is necessary to maintain the Group’s current competitive position and enables the Group to service new customers and/or
contracts or to enter into new categories and/or new manufacturing competencies.
The following table sets forth the breakdown of the Group’s cash outflow for the purchase of property, plant and equipment and purchase of
intangible assets between Strategic Capital Expenditure and Maintenance Capital Expenditure:
Convenience Foods UK and Ireland
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash outflow from capital expenditure
Strategic Capital Expenditure
Maintenance Capital Expenditure
Net cash outflow from capital expenditure
2023
£m
36.0
1.4
37.4
10.8
26.6
37.4
2022
£m
48.6
1.4
50.0
33.1
16.9
50.0
Free Cash Flow and Free Cash Flow Conversion
The Group uses Free Cash Flow to measure the amount of underlying cash generation and the cash available for distribution and allocation.
The Group calculates the Free Cash Flow as the net cash inflow/outflow from operating and investing activities before Strategic Capital
Expenditure, acquisition and disposal of undertakings, disposal of investment property and adjusting for dividends paid to non-controlling
interests.
The Group calculates Free Cash Flow Conversion as Free Cash Flow divided by Adjusted EBITDA.
The following table sets forth a reconciliation from the Group’s net cash inflow from operating activities and net cash outflow from investing
activities to Free Cash Flow and Free Cash Flow Conversion:
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash inflow from operating and investing activities
Strategic Capital Expenditure
Repayment of lease liabilities
Disposal of undertakings
Free Cash Flow
Adjusted EBITDA
Free Cash Flow Conversion
2023
£m
99.0
(31.3)
67.7
10.8
(15.6)
(6.1)
56.8
132.8
42.8%
2022
£m
92.9
(50.0)
42.9
33.1
(17.3)
–
58.7
126.9
46.3%
Net Debt and Net Debt excluding lease liabilities
Net Debt is used by the Group to measure overall cash generation of the Group and to identify cash available to reduce borrowings. Net Debt
comprises current and non-current borrowings less net cash and cash equivalents.
Net Debt excluding lease liabilities is a measure used by the Group to measure Net Debt excluding the impact of IFRS 16 Leases. Net Debt
excluding lease liabilities is used for the purpose of calculating leverage under the Group’s financing agreements.
181
The reconciliation of opening to closing Net Debt for the financial year ended 29 September 2023 is as follows:
Cash and cash equivalents and bank overdrafts
Bank borrowings
Private Placement Notes
Net Debt excluding lease liabilities
Lease liabilities
Net Debt
At
30 September
2022
£m
Translation and
non-cash
adjustments
£m
At
29 September
2023
£m
Cash flow
£m
46.7
(158.8)
(67.9)
(180.0)
(48.0)
(228.0)
(13.8)
20.2
15.5
21.9
16.8
38.7
(0.1)
(0.4)
4.6
4.1
(13.8)
(9.7)
32.8
(139.0)
(47.8)
(154.0)
(45.0)
(199.0)
The reconciliation of opening to closing Net Debt for the financial year ended 30 September 2022 is as follows:
Cash and cash equivalents and bank overdrafts
Bank borrowings
Private Placement Notes
Net Debt excluding lease liabilities
Lease liabilities
Net Debt
At
24 September
2021
£m
73.6
(150.1)
(106.6)
(183.1)
(59.6)
(242.7)
Translation and
non-cash
adjustments
£m
Cash flow
£m
(26.5)
(9.6)
47.3
11.2
18.5
29.7
(0.4)
0.9
(8.6)
(8.1)
(6.9)
(15.0)
At
30 September
2022
£m
46.7
(158.8)
(67.9)
(180.0)
(48.0)
(228.0)
Return on Invested Capital (‘ROIC’)
The Group uses ROIC as a key measure to determine returns for the Group and as a key measure to determine potential new investments.
The Group uses invested capital as a basis for this calculation as it reflects the tangible and intangible assets the Group has added through its
capital investment programme, the intangible assets the Group has added through acquisition, as well as the working capital requirements of
the business. Invested capital is calculated as net assets (total assets less total liabilities) excluding Net Debt, the carrying value of derivatives
not designated as fair value hedges, and retirement benefit obligations (net of deferred tax assets). Average invested capital is calculated by
adding the invested capital from the opening and closing Statement of Financial Position and dividing by two.
The Group calculates ROIC as Net Adjusted Operating Profit After Tax (‘NOPAT’) divided by average invested capital. NOPAT is calculated as
Adjusted Operating Profit plus share of profit of associates before tax, less tax at the effective rate in the Group Income Statement.
The following table sets forth the calculation of NOPAT and invested capital used in the calculation of ROIC for the financial years:
Adjusted Operating Profit
Taxation at the effective tax rate(A)
Group NOPAT
Invested capital
Total assets
Total liabilities
Net Debt
Derivatives not designated as fair value hedges
Retirement benefit obligation (net of deferred tax asset)
Invested capital for the Group
Average invested capital for ROIC calculation for Group(B)
ROIC for the Group
2023
£m
76.3
(16.0)
60.3
2023
£m
1,297.7
(837.9)
199.0
(4.6)
12.8
667.0
2022
£m
72.2
(13.7)
58.5
2022
£m
1,338.7
(873.1)
228.0
(14.8)
10.4
689.2
678.1
695.0
8.9%
8.4%
(A) The effective tax rates for the Group for the financial year ended 29 September 2023 and 30 September 2022 were 21% and 19%, respectively.
(B) The invested capital for the Group was £700.8m in 2021.
Strategic Report | Directors’ Report | Financial Statements | Other Information 182 Greencore Group plc Annual Report and Financial Statements 2023
Other information
Greencore Group plc (the ‘Group’, the ‘Company’ or ‘Greencore’) is an Irish incorporated company registered under number 170116.
Its Ordinary Shares are quoted on the London Stock Exchange (Symbol: GNC). Greencore has a Level 1 American Depositary Receipts
programme (Symbol: GNCGY).
Financial calendar
Annual General Meeting
FY24 H1 Results
FY24 financial year end
FY24 Full Year Results
25 January 2024
21 May 2024
27 September 2024
28 November 2024
Advisors and registered office
Group General Counsel
and Company Secretary
Damien Moynagh
Registered Office
No. 2 Northwood Avenue
Northwood Business Park
Santry
Dublin 9
D09 X5N9
Ireland
Auditor
Deloitte Ireland LLP
Earlsfort Terrace
Dublin 2
D02 AY28
Ireland
Registrar and
Transfer Office
Computershare Investor
Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82
Ireland
Solicitors
Arthur Cox
Ten Earlsfort Terrace
Dublin 2
D02 T380
Ireland
Eversheds Sutherland
Bridgewater Place
Water Lane
Leeds
LS11 5DR
United Kingdom
American Depositary Receipts
BNY Mellon
101 Barclay Street
22nd Floor – West
New York NY 10286
United States
Website
www.greencore.com
Follow Greencore on Twitter
@GreencoreGroup
and on Instagram
@greencore_group
Stockbrokers
Goodbody Stockbrokers
Ballsbridge Business Park
Ballsbridge
Dublin 4
D04 YW83
Ireland
HSBC Bank plc
8 Canada Square
London
E14 5HQ
United Kingdom
Shore Capital
Cassini House
57 St James’s Street
London
SW1A 1LD
United Kingdom
Notes
183
Strategic Report | Directors’ Report | Financial Statements | Other Information 184 Greencore Group plc Annual Report and Financial Statements 2023
Notes
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Printed on material from well-managed, FSC®
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100% of the inks used are vegetable oil based.
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Greencore Group plc
No. 2 Northwood Avenue, Northwood Business Park
Santry, Dublin 9, DO9 X5N9 T: +353 (0) 1 605 1000