Annual Report 2023
ICON plc and Subsidiaries
Registered number 145835
ICON plc and Subsidiaries
Consolidated Financial Statements
Year ended 31 December 2023
Registered number: 145835
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Directors’ Report and Consolidated Financial Statements
Contents
Directors’ and Other Information
Directors’ Report
Statement of Directors’ Responsibilities in respect of the Directors’ report and the financial statements
Independent Auditor’s Report to the members of ICON plc
Consolidated Statement of Profit and Loss
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to Company Financial Statements
Reconciliation from IFRS to US Accounting Polices
Appendix A: Risk Factors
Page
2
3
30
31
38
39
40
41
43
44
135
136
138
145
149
1 Directors’ and Other Information
Directors
Company secretary
Registered office
Auditor
Solicitors
Registrars
Bankers
Ciaran Murray (Irish – Chair)
Dr. Steve Cutler (Australian – Chief Executive Officer)
Rónán Murphy (Irish – Non-Executive)
Dr. John Climax (Irish – Non-Executive)
Joan Garahy (Irish – Non-Executive)
Eugene McCague (Irish – Non-Executive)
Julie O'Neill (Irish – Non-Executive)
Dr. Linda Grais (American - Non-Executive)
Diarmaid Cunningham
South County Business Park
Leopardstown
Dublin 18
KPMG
1 Stokes Place
St. Stephen’s Green
Dublin 2
A & L Goodbody
International Financial Services Centre
North Wall Quay
Dublin 1
Cahill Gordon & Reindel LLP
32 Old Slip
New York
NY 10005
USA
Computershare Investor Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
Citibank
Canada Square
Canary Wharf
London E14 5LB
United Kingdom
JP Morgan Chase Bank N.A.
4 New York Plaza
New York
NY 10004
USA
2 Directors’ Report
The Directors present their report and audited Consolidated and Company Financial Statements of ICON plc (“the
Company”, “ICON”, "we", "our" or "us"), a public limited company incorporated in the Republic of Ireland, and its subsidiary
undertakings (“the Subsidiaries”), with the Company and the Subsidiaries being together (“the Group”) for the year ended
31 December 2023.
The Company’s ordinary shares are traded on the NASDAQ market. The Company is considered a foreign private issuer in
the U.S. and accordingly it is not subject to the same ongoing regulatory requirements as a U.S. registered company with a
primary listing on the NASDAQ market.
These Consolidated and Company Financial Statements (together “the financial statements”) for the year ended
31 December 2023 are prepared in accordance with IFRS as adopted by the EU and meet the reporting requirements
pursuant to Irish Company Law. In addition to the Consolidated Financial Statements contained in this annual report, we
also prepare separate consolidated financial statements on Form 20-F pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the
United States (U.S. GAAP). The Form 20-F (under U.S. GAAP) is a separate document, a copy of which may be obtained
from the Company’s website www.iconplc.com. IFRS differs in certain respects from U.S. GAAP, details of which are set out
on pages 145 to 148 of this annual report.
Principal activities, business review and future developments
ICON public limited company (“ICON plc”) is a contract research organisation (“CRO”), founded in Dublin, Ireland in 1990.
For over thirty years we have grown significantly to become a leading global provider of outsourced development and
services to pharmaceutical, biotechnology, medical device and government and public health organisations. Our mission is
to improve the lives of patients by accelerating the development of our customers’ drugs and devices through innovative
solutions.
We are a public limited company in Ireland and operate under the Irish Companies Acts. Our principal executive office is
located at: South County Business Park, Leopardstown, Dublin 18, Republic of Ireland. The contact telephone number of
this office is +353 1 2912000. Our website is www.iconplc.com.
ICON is a leading global provider of outsourced development and commercialisation services to pharmaceutical,
biotechnology, medical device, and government and public health organisations. We offer a full range of clinical, consulting
and commercial services that range from clinical development strategy, planning and trial design, to full study execution, and
post-market commercialisation. ICON provides its services across a range of clinical outsourcing operating models including
strategic partnerships, preferred provider, full-service delivery to functional service provision and stand-alone services.
3 Directors’ Report (continued)
We specialise in the strategic development, management and analysis of programs that support all stages of the clinical
development process, from compound selection to Phase I-IV clinical studies. We earn revenue by providing a number of
different services to our customers. Those services are integral components of the clinical development process and include
clinical trial management, consulting, contract staffing, data solutions and laboratory services.
Our vision is to be the healthcare intelligence partner of choice by delivering industry leading solutions and best in class
performance in clinical development. We believe that we are one of a select group of CROs with the expertise and capability
to conduct clinical trials in the major therapeutic areas on a global basis and have the operational flexibility to provide
development services on a stand-alone basis or as part of an integrated full-service solution. In order to achieve this vision,
we are capitalising on the enhanced scale, technology and data analytics capabilities that the recent acquisition of PRA
Health Sciences delivered.
ICON maintains a sustained focus on research and development. We continue to enhance our portfolio of data solutions
and decentralised clinical trial technology through the development of industry-leading technologies and processes to
support our clients. ICON is leading the industry transformation through four key levers: transforming clinical trials, site and
patient centricity, healthcare intelligence and applied innovation, and seamless, integrated service delivery.
At 31 December 2023, we employed approximately 41,100 employees in 106 locations in 53 countries. During the year
ended 31 December 2023, we derived approximately 40.4%, 48.7% and 10.9% of our revenue in the United States, Europe
and Rest of World, respectively.
We have achieved strong growth since our foundation in 1990, as a global provider of outsourced development and
commercialisation services to pharmaceutical, biotechnology, medical device and government and public health
organisations. We focus our innovation on those factors that are critical to our clients - reducing time to market, reducing
cost and increasing quality. Our global team has extensive experience in a broad range of therapeutic areas. ICON has
been recognised as one of the world's leading Contract Research Organisations (''CROs") through a number of high-profile
industry awards (see www.iconplc.com/awards).
As our market has evolved, biopharmaceutical companies are tackling productivity challenges, budget constraints and
greater demands to demonstrate product value; all of which are placing increased pressure on their revenues and levels of
profitability. However, these trends have generally been positive for CROs, as increased outsourcing has been adopted by
these companies as they seek to create greater efficiencies in their development processes, convert previously fixed costs
to variable, and accelerate time to market for new treatments.
Regulatory and reimbursement pressures will increase the emphasis on late stage (post marketing) research, while
increasing requirements to demonstrate the economic value of new treatments. As a result, outcomes and comparative
effectiveness research will most likely be required in order to secure on-going product reimbursement. Furthermore, we
believe advances in molecular biology and genetics will drive further growth in innovation in the long term which in turn
should create further growth opportunities for both biopharma companies and their outsource development partners.
We expect that continued outsourcing will be a core strategy of clients in the near term as they respond to the increased
pressures on their revenues and profitability. Larger clients were the first to form strategic partnerships with global CROs in
an effort to reduce the number of outsource partners with whom they engage and to reduce inefficiencies in their current
drug development models. More recently we have seen the increasing adoption of this partner model with mid-tier
pharmaceutical and biotechnology firms as they also seek to drive development efficiencies. As outsourcing penetration
increases, we believe clients may seek a greater level of integration of service offerings from CROs, although some will
continue to purchase services on a stand-alone basis. Creating greater connectivity and “seamlessness” between our
services and the sharing of “real-time” clinical, operational and “real world” data with clients will therefore become
increasingly important for CROs. ICON will seek to benefit from this increased outsourcing by clients to grow our business
by increasing market share with our existing client base and adding new clients within the Phase I-IV outsourced
development services market; the aim being to ensure we will be considered for all major Phase I-IV projects.
Delivery of our mission and strategy is focused on our four strategic pillars, being (i) Patient Access & Engagement (ii)
Career Development & Employer of choice (iii) Enduring Customer Partnerships and (iv) Healthcare Intelligence & Applied
Innovation.
4 Directors’ Report (continued)
Patient Access & Engagement
ICON has a focused patient, site and data strategy, which is helping us to improve site identification, study placement and
patient recruitment and retention.
Accellacare is ICON's global clinical research network offering customers a wide range of stand-alone and integrated
solutions at site or in patients' homes as part of decentralised trials. Our patient centric approach accelerates study start-up
and increases patient recruitment and retention for the pharmaceutical, biotechnology and medical device industries.
Accellacare In-Home Services takes study visits directly to patients where they live, work, study or play in all phases and
therapeutic areas of clinical trials. By bringing trial visits directly to patients, we ease the burden of participating in clinical
research to increase patient recruitment, retention and diversity. Accellacare In-Home Services has experience in more than
450 clinical trials, tailoring our services to fit each study's specific requirements across more than 50 countries. This
cohesive approach is leading to higher patient recruitment and retention rates. Accellacare is also achieving faster study
start-up for its customers through efficiencies gained in central process management including budget and contracting,
which can otherwise be a source of delay. This combined with a finely tuned feasibility approach allows the network to
identify and recruit more patients to studies, in a wide range of therapeutic areas, in a shorter time frame. Accellacare is an
important part of the integrated patient, site and data strategy, helping us to improve patient recruitment and retention.
Through Accellacare, we are committed to delivering on the promise of patient centricity in clinical research whilst also
providing investigators with innovative treatments for their patients with a quality-focused clinical research infrastructure
supported by experienced professionals globally.
The Accellacare Site Network encompasses more than 50 sites across 6 countries covering the United States, Europe and
South Africa. Accellacare offers a quality focused clinical research infrastructure delivering value and benefits to sponsors.
Accellacare supports customers with faster start-up and the time from site selection to site initiation visit is on average 30%
faster when compared to other sites. Furthermore, Accellacare achieves an average of 40% more patients per site when
compared to other sites.
In 2023, Accellacare Site Network optimised its site partnerships and focused on enhancing capabilities within its US
locations with a continued focus on Central nervous system (CNS) capabilities. ICON fully acquired the Oncacare site
network in April 2023.
Finding and engaging suitable patients to conduct clinical trials is one of the biggest issues facing the drug development
industry today. Less than 1% of the US population participates in clinical trials and the performance of investigative sites that
do take part in research is uneven, hard to predict and many trials do not meet the initial recruitment goals. The current
market challenge in patient enrolment creates an opportunity for ICON to differentiate its service offering and we are working
to reduce patient recruitment times through enhanced site and investigator selection based on key performance metrics and
5 Directors’ Report (continued)
through use of our proprietary FIRECREST technology which is used to train and support sites during the development
process.
ICON's site networks enhance our ability to enrol patients onto the clinical studies we perform. We have also developed
strategic alliances with investigator site groups and healthcare systems in all major global research markets. In partnership
with others, we are pioneering patient recruitment solutions that leverage cognitive computing to transform clinical trial
matching and allow a data-driven approach to deliver the right patients for trials. One Search is our intuitive, integrated
workflow and interrogation tool that enables access to multiple data sources and provides the visualisation and tools
necessary for optimum site identification based on ICON and industry data of capability, experience and performance.
Scoring on enrolment performance, speed of start-up and quality supports better site selection.
Career development and employer of choice
People have long been central to our mission to improve the lives of patients by accelerating the development of our
customers’ drugs and devices through innovative solutions. We encourage our people to bring flexibility, innovation, and
determination to every situation. By doing so, our people can build exciting and rewarding careers, and deliver results to
bring life-changing medicines to market and to maintain our success as an industry leader.
Our leadership and talent programs contribute to the enhanced retention of our employees, better project deliverables for
our customers and the enhanced financial performance of the business.
We aim to be an industry leader: a company where talented people come to do important work, a place where our
employees can shape the future of healthcare, grow their careers, and reach their full potential. We have long held a deep
commitment to cultivating strong people practices. This includes competitive total rewards packages along with a focus on
continuous learning. We nurture a culture of development and aim to boost engagement by supporting our people’s growth,
both personally and professionally. We are dedicated to finding opportunities for our employees to grow and develop.
Our success depends on the knowledge, capabilities, and quality of our people. To improve their skills, we are committed to
providing continuous learning. This commitment is underpinned by clearly defined competencies, which offer employees a
clear path along which to develop skills and advance their careers.
To support employees at every stage of their career journeys, training and development programs are aimed at advancing
scientific, technical, and business knowledge. Programs include tailored CRA academies and a range of project
management curricula, therapeutic-focused programs, and people leader development programs.
Enduring customer partnerships
We continue to focus on expanding and deepening our partnerships with existing customers, while also developing new
customer relationships.
Strategic client relationships will increasingly manifest themselves in many different forms. Many of these relationships will
require innovative forms of collaboration across ICON service areas and departments and will therefore require increased
flexibility to offer services on both a standalone functional basis and as part of a fully integrated service solution. To support
this objective, we continue to evolve our collaboration and delivery models, invest in technology that will enable closer data
integration across our service areas and enhance our project and program management capabilities.
To meet the evolving needs of both our existing and new clients we continue to enhance our capabilities through both
organic service development and targeted acquisitions. In addition, we continue to enhance our scientific and therapeutic
expertise to support our customers in specific areas including oncology, orphan and rare diseases, CNS, dermatology,
infectious disease and women's health.
ICON has extensive experience in vaccine clinical development for commercial businesses, governments and NGOs. This
experience enabled us to play a significant role in the search for vaccines and treatments for COVID-19.
Of particular note was our work in partnering with Pfizer and BioNTech on their investigational COVID-19 vaccine program -
the first to announce positive efficacy results from a Phase 3, late-stage study of a COVID-19 vaccine and to receive
Emergency Use Authorisation in individuals 16 years of age or older from the U.S. Food and Drug Administration.
ICON mobilised a large global team of therapeutic and operational specialists to partner on the implementation of Pfizer‘s
and BioNTech’s strategic plan and framework for the monitoring of the trial, which included a high level of remote clinical
monitoring and source data verification in addition to on-site monitoring, safeguarding data quality and integrity in the
evolving pandemic environment. The team combined the benefits of full service and functional service provider clinical
operating models to increase efficiency and ensure rapid study start-up.
6 Directors’ Report (continued)
ICON worked with 153 sites in the US, Europe, South Africa and Latin America to ensure the recruitment of more than
44,000 trial participants over a four-month period in late 2020. ICON provided site training, document management and
operational support for patient Informed Consent Form review, coordinated eConsent in most countries, and assisted with
clinical supply management services. Achieving the unprecedented trial timelines, while maintaining high standards of
quality, undertaken in response to the pandemic required collaboration and strong communication between the ICON and
sponsor project teams.
We continue to target growth in under-penetrated CRO market segments. Penetration within medical device companies has
lagged that of bio-pharma firms but is beginning to accelerate. EU regulatory reform enacted in 2017 is a further catalyst to
growth in this segment as it included stricter requirements to perform clinical evaluations and post-sale surveillance. In early
2020, ICON acquired MedPass which has further enhanced our value offering in this area.
We also invested significantly in our site and patient network (Accellacare), and consider our expertise and offering in this
area as one of our strategic pillars.
Healthcare intelligence and applied innovation
Innovation at ICON is focused on the factors that are critical to our clients. We develop integrated technologies to
significantly enhance the efficiency and productivity of clients’ drug and device development programs, providing true
transparency across all areas of a study.
ICON is focused on applying innovation that can help our customers improve their development outcomes. We are focusing
this innovation in three critical areas: improving clinical trial design and execution; faster and more predictable patient
recruitment; and evolving clinical trials to be more patient centric which includes data collection and analysis directly from
patient’s digital devices. Our approach to developing solutions to these challenges incorporates partnering with best-in-class
technology providers but is also supported by a suite of differentiated ICON proprietary technologies.
Through an informatics strategy built around key platforms including ICONIK and Health Cloud, we have continued to invest
in building our capabilities in the gathering, analysis and application of real world patient data within both the clinical trial and
post-trial observational study environments. ICONIK and Health Cloud enable ICON to deliver services such as Risk Based
Monitoring (RBM) which uses near-real time clinical data to drive monitoring visit schedules, enabling better decision making
and the successful implementation of clinical trial strategies that significantly improve efficiency in clinical trials thereby
reducing overall cost and time to market whilst better protecting patient safety.
ICON’s proprietary One Search tool helps to efficiently and effectively identify optimum trial sites. It synthesizes multiple
data sources, applying AI machine learning and rich data visualisation for optimum site identification, resulting in improved
study start-up and site cycle times, significant reductions in the percentage of low performing sites and increasing the
percentage of studies meeting planned First Patient In (FPI).
FIRECREST is ICON’s proprietary comprehensive site performance management system. It is a web-based solution which
enables accurate study information, including protocol information, training manuals and case report forms, to be rolled out
quickly and simultaneously to investigative sites. It allows site behaviour to be tracked to ensure training is understood,
procedures are being followed and that timelines and study parameters are met. It can significantly reduce the number of
data queries originated from investigator sites. FIRECREST is now integrated into the ICON Safety Reporting Solution and
provides a Site Question Management Tool.
The ICON Patient Engagement Platform was developed to support improved patient experience and enrolment in clinical
trials. The web-based patient engagement platform, provides patients with study specific information and connectivity with
the nearest investigative site. The solution supplements patient recruitment outreach by sites and increases visibility of
potential study participants for sponsors and sites. An easy to navigate, user friendly interface guides the patient to new and
ongoing studies in their particular indication and a pre-qualification questionnaire helps to determine if the study is a right fit
for them. If the patient decides to register interest, they are given the option to select their nearest investigative site. This
establishes connection with the site and the patient can then choose to contact the site or ask to be contacted for pre-
screening.
We positively impact patients’ lives by understanding their journeys and how they can benefit from drugs currently in
development and on the market. We do this by developing a holistic, global data environment across pharmaceutical and
biotech companies (development to commercial) that gives insights into patients, and how best to serve them. Alongside the
application of these technology solutions we are also focused on innovation through the redesign and where appropriate the
automation of current clinical trial processes.
7 Directors’ Report (continued)
Operational excellence, quality and delivery
Quality is the foundation of our success. The quality of our work is vital to our mission of bringing better medications to
patients around the world. We are committed to maintaining, supporting, checking and improving our quality systems to
meet or exceed the quality standards demanded by our clients, patients and regulatory authorities. We focus our innovation
on the factors that are critical to our clients – reducing time to market, reducing cost and increasing quality – and our global
team of experts has extensive experience in a broad range of therapeutic areas.
Quality project execution underpins all that we do and we have an ongoing focus on developing our people and processes
to continue to enhance our service delivery. We also deploy supporting technologies which we believe will enable faster and
deeper insights into the quality of trial data.
We are focused on operational excellence across our support functions, and we operate a global business support
infrastructure across functions including finance, information technology, facilities, human resources, legal and quality
assurance. This enables us to enhance the service levels across these support areas whilst driving down the costs of the
service provision
Principal activities of the Company
The principal activity of the Company is to act as a holding Company. The Company also operates branch offices: ICON
Poland in Warsaw, ICON Latvia in Riga and ICON Lithuania in Vilnius. These branches provide contract research services
to the pharmaceutical industry.
Acquisition activity
Since ICON was founded, the Company has expanded through organic growth, together with a number of strategic
acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process and to broaden the
service portfolio and add scale to existing services.
Recent investments, which continue to strengthen our service offerings to meet the needs of our customers include:
On 2 October 2023, the Company acquired 100% of the equity of BioTel Research, LLC which comprised the business
formerly known as Philips Pharma Solutions, a leading provider of medical imaging and cardiac safety monitoring services.
On 20 April 2023, the Company completed the purchase of the majority investor's 51% voting share capital of Oncacare
Limited (such that Oncacare and its subsidiaries became wholly-owned subsidiaries of the ICON Group), a global network
of oncology research sites that provide a unique patient recruitment and delivery solution for the clinical research industry.
On 1 July 2021, the Company completed the acquisition of PRA Health Sciences, Inc. ("PRA") by means of a merger
whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of
the PRA Health Sciences ("the Merger").
8 Directors’ Report (continued)
With approximately 41,100 employees across the globe, ICON has established relationships with a majority of the world’s
top pharmaceutical and biotech companies. We believe the Company now has the expertise, technology, and data assets to
lead the industry into a new paradigm for bringing clinical research to more patients and enabling expanded capabilities for
customers. We believe the Merger will deliver a transformational effect on ICON through:
Scale: With a deeper clinical, commercialisation and consulting services portfolio, a broader geographic footprint,
depth in therapeutic expertise, and data-driven healthcare technology, the Company can deliver enhanced globally
scaled expertise & solutions for all customers and patients.
Focus: The Company will have a singular focus on clinical research and commercialisation, leveraging
transformational technology and innovation to execute clinical trials from Phase 1 to post-approval studies with the
highest quality, expertise and speed.
Speed to market: Our extensive services portfolio, digital and data technology capabilities, and enhanced access to
more diverse patient populations, have been combined with flexible delivery approaches and partnership models – all
with the aim of reducing development time and costs.
Flexible partnership models: ICON has partnerships with a majority of world’s top biopharma and biotech companies
worldwide. ICON is a global leader in Functional Service Provision and a top global provider of full service clinical
research.
Differentiated DCT platform, healthcare intelligence & technology: ICON can deliver differentiated decentralised
and hybrid trial solutions through a suite of capabilities, including mobile health, commercial connected health
platforms, real world data and information solutions, a global site network, home health services and wearables
expertise.
Access to patients: ICON offers customers enhanced access to a larger global pool of more diverse patients through
its global site network (Accellacare), specialised oncology network (Oncacare), a paediatric site network, in-home
clinical services and a network of six Phase I clinical research units across the United States and Europe.
Future developments
Please see note 31 Subsequent events for details of events in the period from year-end to the approval of the financial
statements.
The Group looks forward to continuing to expand through organic growth in 2024 and beyond, together with strategic
acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process and to continue to
deliver on the Company’s mission to accelerate the development of drugs and devices that save lives and improve the
quality of life.
9 Directors’ Report (continued)
Results and dividends
The results for the financial year and state of affairs of the Group are set out in the Consolidated Statement of Profit and
Loss, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows on pages 38 to 43
respectively. The Directors do not propose the payment of a dividend for the year ended 31 December 2023.
The following table sets forth for the periods indicated certain financial data as a percentage of revenue and the percentage
change in these items compared to the prior period, being the key performance indicators used by management. The trends
illustrated in the following table may not be indicative of future results.
Revenue
Costs and expenses
Direct costs excluding exceptional items
Other operating expenses excluding exceptional items
Operating profit excluding exceptional items
Transaction and integration related expenses
Restructuring expenses
Operating profit including exceptional items
31 December
2023
31 December
2022
As a percentage of revenue
Percentage
increase/
decrease
100 %
100 %
5.0 %
70.4 %
16.6 %
13.0 %
0.5 %
0.6 %
11.9 %
71.4 %
17.3 %
11.3 %
0.5 %
0.4 %
10.4 %
3.6 %
1.0 %
20.0 %
11.3 %
45.7 %
19.5 %
Twelve months ended 31 December 2023 compared to twelve months ended 31 December 2022
Revenue
Revenue
8,120,176
7,733,386
386,790
5.0%
31 December
2023
31 December
2022
Change
$’000
$’000
$’000
%
Revenue for the year ended 31 December 2023 increased by $386.8 million, or 5.0%, to $8,120.2 million from $7,733.4
million for the year ended 31 December 2022. For the year ended 31 December 2023 we derived approximately 40.4%,
48.7% and 10.9% of our revenue in the United States, Europe and Rest of World, respectively. The increase in revenues in
the year ended 31 December 2023 is due to the continued organic growth across the Company's markets.
Revenues from our top five customers amounted to $2,174.8 million in the year ended 31 December 2023 compared to
$2,187.4 million in the year ended 31 December 2022 or 26.8% and 28.3% respectively. New customer accounts are
continually added across the full portfolio of large pharma customer, mid-tier pharma customers and biotech customers.
Revenue in Ireland increased by $392.5 million in the year ended 31 December 2023, to $2,377.1 million, compared to
$1,984.6 million for the year ended 31 December 2022. Revenue in Ireland during the year ended 31 December 2023
increased by 19.8% compared to an overall increase in Group revenue of 5.0%. Revenue in Ireland is principally a function
of our global contracting model (see note 2 - Segmental information).
Revenue in the Rest of Europe decreased by $43.6 million or 2.7%, to $1,574.8 million, compared to $1,618.4 million for the
year ended 31 December 2022. Revenue in the U.S. decreased by $282.8 million or 7.9%, to $3,283.8 million, compared to
$3,566.6 million for the year ended 31 December 2022. Revenue in our Rest of World (‘Other’) region increased by $320.6
million or 56.9%, to $884.5 million compared to $563.9 million for the year ended 31 December 2022.
10
Directors’ Report (continued)
Direct costs
Direct costs ($'000)
% of revenue
31 December
2023
31 December
2022
Change
5,719,025
5,521,522
197,503
70.4%
71.4%
3.6%
Direct costs for the year ended 31 December 2023 increased by $197.5 million or 3.6%, to $5,719.0 million from $5,521.5
million for the year ended 31 December 2022. Direct costs consist primarily of investigator and other reimbursable costs,
compensation, associated fringe benefits and share-based compensation expense for project-related employees and other
direct project driven costs. The increase in direct costs arose due to an increase in personnel related costs, laboratory costs,
travel and other direct project driven costs. This was offset by a decrease in third party investigator and other reimbursable
costs in the year. As a percentage of revenue, direct costs have decreased to 70.4% compared to 71.4% for the year ended
31 December 2022.
Other Operating Expenses
Other operating expenses excluding exceptional items ($'000)
1,347,694
1,334,235
13,459
% of revenue excluding exceptional items
16.6%
17.3%
1.0%
Other operating expenses including exceptional items ($'000)
1,437,260
1,405,073
32,187
% of revenue including exceptional items
17.7%
18.2%
2.3%
31 December
2023
31 December
2022
Change
Other operating expenses for the year ended 31 December 2023 increased by $13.5 million, or 1.0%, to $1,347.7 million
compared to $1,334.2 million for the year ended 31 December 2022 (excluding exceptional items). Other operating costs
comprise primarily of compensation, related fringe benefits and routine share based compensation expense for non-project-
related employees, recruitment expenditures, professional service costs, advertising costs, costs related to facilities and
information systems, depreciation and amortisation. As a percentage of revenue, other operating expenses decreased to
16.6% of revenue, compared to 17.3% of revenue for the year ended 31 December 2022 (excluding exceptional items).
The decrease in costs for the year ended 31 December 2023 primarily reflects decreases in general overhead, personnel
costs, share compensation expense, amortisation of intangible assets and marketing costs offset by movements in
professional fees, foreign exchange, depreciation, and facilities costs. Further the Group recorded a gain of $6.2 million
related to the Oncacare acquisition during the year ended 31 December 2023.
Exceptional items - Restructuring, transaction and integration-related expenses associated with the Merger
Transaction and integration related ($'000)
% of revenue
Restructuring ($'000)
% of revenue
31 December
2023
31 December
2022
Change
44,176
39,695
0.5 %
0.5 %
4,481
11.3 %
45,390
31,143
14,247
0.6%
0.4%
45.7 %
During the year ended 31 December 2023, the Group incurred $89.6 million for restructuring, transaction and integration-
related expenses. The charge includes transaction and integration costs of $44.2 million associated with professional fees,
retention agreements and ongoing integration activities.
The Group has also undertaken a restructuring programme aimed at realigning its workforce as well as reviewing its global
office footprint and optimising its locations to best fit the requirements of the Company. This programme has resulted in a
charge of $45.4 million in the year ended 31 December 2023 ( 31 December 2022: $31.1 million).
We expect to incur some additional expenses associated with the Merger; however, the timing and the amount of these
expenses depends on various factors including the execution of integration activities.
11
Directors’ Report (continued)
Operating profit
31 December
2023
31 December
2022
Change
Operating profit excluding exceptional items ($'000)
1,053,457
877,629
175,828
% of revenue excluding exceptional items
13.0%
11.3%
20.0%
Operating profit including exceptional items ($'000)
963,891
806,791
157,100
% of revenue including exceptional items
11.9%
10.4%
19.5%
Operating profit increased by $175.8 million, or 20.0%, to $1,053.5 million ($963.9 million including exceptional items) for
the year ended 31 December 2023 from $877.6 million for the year ended 31 December 2022 ($806.8 million including
exceptional items) . As a percentage of revenue, operating profit increased to 13.0% (11.9% including exceptional items) of
revenues for the year ended 31 December 2023 compared to 11.3% of revenues for the year ended 31 December 2022
(10.4% including exceptional items).
Financing income and expense
Financing income
31 December
2023
31 December
2022
$’000
5,014
$’000
2,345
Change
$’000
2,669
Financing expense excluding exceptional items
(340,871)
(234,201)
106,670
%
113.8%
45.5%
Financing expense for the period increased to $340.9 million for the year ended 31 December 2023 from $234.2 million for
the year ended 31 December 2022 due to impact of rising interest rates incurred on the Group's debt facilities,
notwithstanding significant repayments of the Group's loan facilities (see note 23 - Bank credit lines and loan facilities).
Financing income for the year increased to $5.0 million for the year ended 31 December 2023 from $2.3 million for the year
ended 31 December 2022.
Income tax expense
Income tax expense excluding exceptional items ($'000)
Income tax expense including exceptional items ($'000)
Effective income tax rate (%)
31 December
2023
31 December
2022
32,830
18,627
79,679
65,514
3.0%
11.5%
Change
(46,849)
(46,887)
(58.8%)
(71.6%)
Income tax expense for the period decreased to $18.6 million (including exceptional items) for the year ended 31 December
2023 from $65.5 million for the year ended 31 December 2022. The Group’s effective tax rate for the year ended
31 December 2023 was 3.0% (4.6% excluding the effect of exceptional items) compared with 11.5% (12.4% excluding the
effect of exceptional items) for the year ended 31 December 2022; primarily due to the release of significant unrecognised
tax benefits acquired in connection with the merger which was partially offset by a deferred tax provision on unrepatriated
earnings. With the exception of the foregoing, the Group's effective tax rate remains principally a function of the distribution
of pre-tax profits amongst the territories in which it operates.
Risks and uncertainties
Under Irish Company Law (Section 327 the Companies Act), the Directors are required to give a description of the principal
risks and uncertainties which it faced at 31 December 2023. Details of the principal risks and uncertainties facing the Group
are set out in Appendix A of this annual report and form an integral part of the Directors’ Report.
12
Directors’ Report (continued)
Financial risk management
Group financial risk management is governed by policies and guidelines which are reviewed and approved annually by the
Board of Directors. These policies and guidelines primarily cover foreign exchange risk, credit risk, liquidity risk and interest
rate risk. The principal objective of these policies and guidelines is to ensure the minimisation of financial risk at reasonable
cost. The Group’s financial instruments comprise cash and cash equivalents, current asset investments, lease obligations
and negotiated debt facilities. The main purpose of these financial instruments is to fund the working capital requirements of
the Group, the cost of new acquisitions and ensure continued growth. The Group also occasionally uses derivative financial
instruments to reduce exposure to fluctuations in foreign exchange rates. The principal financial risk facing the Group is
foreign exchange risk and interest rate risk. Other financial risks include credit risk and liquidity risk. Further details are set
out in note 26 to the Consolidated Financial Statements and note 10 to the Company Financial Statements. The Group does
not undertake any trading activity in financial instruments nor does it enter into any leveraged derivative transactions. The
Group treasury function centrally manages the Group’s funding and liquidity requirements.
Financing
On 1 July 2021, the Company completed the acquisition of PRA Health Sciences, Inc. ("PRA") by means of a merger
whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of
the PRA Health Sciences ("the Merger"). In conjunction with the completion of the Merger, on 1 July 2021, ICON entered
into a credit agreement providing for a senior secured term loan facility of $5,515 million and a senior secured revolving loan
facility in an initial aggregate principal amount of $300 million (the "Senior Secured Credit Facilities"). The Senior Secured
Credit Facility and Senior Secured Notes were issued at a discount of $27.6 million. On 2 May 2023, the Company agreed
with its lenders to increase the aggregate principal amount of the senior secured revolving loan facility from $300 million to
$500 million.
Principal repayments, comprising mandatory and voluntary repayments, during the year ended 31 December 2023 and
31 December 2022 were as follows:
Principal repayments
31 December 2023
31 December 2022
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
$’000
250,000
150,000
300,000
250,000
950,000
$’000
300,000
100,000
200,000
200,000
800,000
During the year ended 31 December 2023, the Company drew down $370.0 million (31 December 2022: $75.0 million) of
the senior secured revolving loan facility and repaid $315.0 million (31 December 2022: $75.0 million ). As at 31 December
2023, $55 million (31 December 2022: $nil) was drawn under the senior secured revolving loan facility in addition to $3.7
million (31 December 2022: $4.5 million) in letters of credit given to landlords to guarantee lease arrangements.
In addition to the Senior Secured Credit Facilities, on 1 July 2021, a subsidiary of the Company issued $500 million in
aggregate principal amount of 2.875% senior secured notes due 2026 in a private offering (the “Offering”). The Senior
Secured Notes will mature on 15 July 2026.
The Company has contractual liabilities for lease arrangements of $176.9 million which will be predominantly settled over
the next five year period through cash payments.
Subsequent events
Details of subsequent events are set out in note 31 to the Consolidated Financial Statements.
13 Directors’ Report (continued)
Directors
The following table sets forth information concerning the composition of the Company’s Board committees as of
31 December 2023:
Name
Ciaran Murray
Dr. Steve Cutler (1)(5)
Rónán Murphy (2)(3)(5)
Dr. John Climax
Joan Garahy (2)(4)
Eugene McCague (3)(4)
Julie O'Neill (3)(4)
Dr. Linda Grais (2)
Position
Chair and Director
Chief Executive Officer and Director
Lead Independent Director
Director
Director
Director
Director
Director
(1) Executive Officer of the Company.
(2) Member of Compensation and Organisation Committee.
(3) Member of Audit Committee.
(4) Member of Nominating, Sustainability and Governance Committee.
(5) Member of Execution Committee.
Details required by Companies Act, section 329, of Directors’ interests in the Group’s shares are set out in note 10 to the
Consolidated Financial Statements.
Directors’ remuneration
Details of the Directors’ remuneration and interests are set out in note 6 and note 10 to the Consolidated Financial
Statements.
Directors’ power to purchase and allot company shares
Subject to the provisions of the Companies Act, the Company may purchase any of its own shares. Every contract for the
purchase of shares, or under which the Company may become entitled or obliged to purchase shares in the Company shall
be authorised by a special resolution of the Company. The Company may cancel any shares so purchased or may hold
them as treasury shares or re-issue them.
A resolution was passed at the Company’s Annual General Meeting (“AGM”) on 22 July 2016, which authorised the
Directors to purchase (buyback) up to 10% of the outstanding shares in the Company. This resolution has been renewed
annually thereafter. On 18 February 2022, the Company commenced a share buyback program which was fully complete
at 31 March 2022. Under this buyback program, 420,530 ordinary shares were redeemed by the Company for total
consideration of $100.0 million.
All ordinary shares that were redeemed under the buyback program were cancelled in accordance with the Constitution of
the Company and the nominal value of these shares transferred to other undenominated capital as required under Irish
Company law.
Rights and Obligations attaching to the Company’s shares
The authorised share capital of the Company is €6,000,000 divided into 100,000,000 ordinary shares of €0.06 at
31 December 2023. Holders of ordinary shares will be entitled to receive such dividends as may be recommended by the
Board of Directors of the Company and approved by the shareholders and/or such interim dividends as the Board of
Directors of the Company may decide. On liquidation or a winding up of the Company, all assets available for distribution will
be paid out to the holders of the Company's ordinary shares. Holders of ordinary shares have no conversion or redemption
rights. On a show of hands, every holder of an ordinary share present in person or proxy at a general meeting of
shareholders shall have one vote with no individual having more than one vote.
14 Directors’ Report (continued)
Change of control
A certain number of the Group’s customer contracts allow the customer to terminate the contract in the event of a change in
control of the Company.
The Senior Secured Credit Facilities, details of which are set out in note 23 to the Consolidated Financial Statements,
provides that, upon the occurrence of a change of control, the obligations thereunder may be accelerated.
Furthermore, certain Group companies have entered capital grant agreements with the Irish government agency, Enterprise
Ireland, whereby the Group covenants that the controlling interest in the Company will not change without Enterprise
Ireland’s prior written consent, which will not be unreasonably withheld.
Additionally, the Company's share option and restricted share unit plans contain change in control provisions which provide
for the acceleration of the vesting and exercisability of outstanding options and awards of restricted share units in the event
that a change in control occurs with respect to the Company.
Corporate Governance
The Company is listed on the NASDAQ Global Select Market. The Company complies with the corporate governance listing
requirements under the NASDAQ marketplace rules.
NASDAQ may provide exemptions from certain NASDAQ corporate governance standards to a foreign private issuer if,
among other reasons those standards are contrary to a law, rule or regulation of a public authority exercising jurisdiction
over such issuer or contrary to generally accepted business practices in the issuer’s home country of domicile, provided,
that, the foreign private issuer properly notifies NASDAQ and makes the required disclosure except to the extent that such
exemptions would be contrary to United States federal securities laws.
The exemptions that the Company relies on, and the practices the Company adheres to, are as follows:
•
•
•
The Company is exempt from provisions set forth in NASDAQ Rule 5620(c), which requires each issuer (other than
limited partnerships) to provide for a quorum in its by-laws for any meeting of the holders of common stock, which
shall in no case be less than 33.33% of the outstanding shares of the issuer’s common voting stock. The
Company’s Constitution requires that only 3 members be present, in person or by proxy, at a shareholder meeting
to constitute a quorum. This quorum requirement is in accordance with Irish law and generally accepted business
practices in Ireland.
The Company is exempt from provisions set forth in NASDAQ Rule 5635(c) which requires (other than for certain
specified exceptions) shareholder approval prior to the establishment or material amendment of a stock option or
purchase plan or other equity compensation arrangement made or materially amended, pursuant to which stock
may be acquired by officers, Directors, employees or consultants. Irish law does not require shareholder approval
with respect to equity compensation arrangements. Accordingly, the 2019 Consultants and Directors Restricted
Share Unit Plan, the 2013 Employees Restricted Share Unit Plan and the amendments to the Employee Share
Option Plan 2008 and Consultants Share Option Plan 2008 were adopted by the Board of Directors without
shareholder approval.
The Company is exempt from provisions set forth in NASDAQ Rule 5605(b)(2), which requires independent
Directors to hold regularly scheduled meetings at which only independent Directors are present. Irish law does not
require independent Directors to hold regularly scheduled meetings at which only independent Directors are
present. The Company holds regularly scheduled meetings which all of the Directors may attend and the Lead
Independent Director may call meetings of the independent Directors and non-employee Directors of the Board, as
appropriate, in accordance with the Lead Independent Director Charter.
The Company's practices with regard to these requirements are not prohibited by Irish law.
15
Directors’ Report (continued)
Audit Committee
The Audit Committee meets a minimum of four times a year. It reviews the quarterly and annual financial statements, the
effectiveness of the system of internal control and recommends the appointment and removal of the external auditors. It
monitors the adequacy of internal accounting practices and addresses all issues raised and recommendations made by the
external auditors. The Audit Committee pre-approves all audit and non-audit services provided to the Company by its
external auditors on a quarterly basis. The Audit Committee, on a case by case basis, may approve additional services not
covered by the quarterly pre-approval, as the need for such services arises. The Audit Committee reviews all services which
are provided by the external auditor to review the independence and objectivity of the external auditor, taking into
consideration relevant professional and regulatory requirements. The Chief Financial Officer, the Head of Internal Audit, the
Chief Administrative Officer and General Counsel and the external auditors normally attend all meetings of the Audit
Committee and have direct access to the Committee Chairperson at all times. The Audit Committee Charter was updated in
February 2024 to include specific responsibilities in respect to the oversight and monitoring of the external reporting on
environmental, social and governance (ESG) matters included in the financial statements and data quality related to such
reporting in coordination with the Nominating, Sustainability and Governance Committee. The Audit Committee is currently
comprised of three independent Directors: Rónán Murphy (Chairperson), Eugene McCague and Julie O'Neill.
Significant shareholdings
The Company has been notified of the following shareholdings in excess of 3% of the issued share capital of the Company
as at 31 December 2023:
Name
WCM Investment Management
Massachusetts Financial Services Company
Wellington Management Company, LLP
Lazard Asset Management, L.L.C.
Boston Partners
Fidelity Management & Research Company LLC
Ninety One UK Limited
Capital Research Global Investors
All Directors and Officers as a group (1)
%
8.3
6.7
4.2
3.4
3.2
3.2
3.1
3.1
1.2
Number of Shares
6,869,881
5,532,676
3,427,415
2,761,425
2,671,730
2,645,041
2,593,526
2,553,673
987,551
(1)
Includes 319,729 ordinary shares issuable upon the exercise of stock options granted by the Company, 31,856 RSUs
awarded by the Company to Directors, officers and other key employees and 86,936 PSUs awarded by the Company to
Directors, officers and other key employees. Of the PSUs, performance conditions determine how many of them will
vest and, if performance targets are exceeded, additional PSUs will be issued and vest in accordance with the terms of
the relevant PSU award, the figure included is the maximum amount of PSUs that may be issued.
Further detailed breakdown of the Directors' interest is included in Note 10 Payroll and related benefits.
Subsidiary undertakings
The information required by the Companies Act in relation to subsidiary undertakings is presented in note 32 Subsidiary
undertakings to the Consolidated Financial Statements.
Political donations
The Group made no disclosable political donations in the period.
16 Directors’ Report (continued)
Going concern
The time period that the Directors have considered in evaluating the appropriateness of the going concern basis in
preparing the 2023 Consolidated Financial Statements is a period of at least twelve months from the date of approval of
these financial statements (the "period of assessment").
The Group has considerable financial resources and a large number of customers across different geographic areas.
Having assessed the relevant business risks (see Appendix A) the Directors believe that the Group is well placed to manage
these risks successfully and they have a reasonable expectation that ICON plc, and the Group as a whole, has adequate
financial and other resources to continue in operational existence for the period of assessment with no material
uncertainties. For this reason, the Group continues to adopt the going concern basis in preparing the consolidated financial
statements.
Accounting records
The Directors are responsible for ensuring that adequate accounting records as outlined in Section 281-285 of the
Companies Act, are kept by the Company. The Directors are also responsible for the preparation of the Annual Report. The
Directors have appointed professionally qualified accounting personnel with appropriate expertise and have provided
adequate resources to the finance function in order to ensure that those requirements are met. The accounting records of
the Company are maintained at the Group’s principal executive offices at its registered office at South County Business
Park, Leopardstown, Dublin 18.
Statement of relevant audit information
The Directors believe that they have taken all steps necessary to make themselves aware of any relevant audit information
and have established that the Company's statutory auditors are aware of that information. In so far as they are aware, there
is no relevant audit information of which the Company's statutory auditors are unaware.
Disclosure of non-financial information
The European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups)
Regulations 2017 require disclosure of certain non-financial information by certain large undertakings and groups.
We have sought to address the requirements of the legislation in the sections following.
Business Model
Our mission is to improve the lives of patients by accelerating the development of our customers’ drugs and devices through
innovative solutions. We are passionate about providing innovative solutions for customers, we are better together working
as one team, we value diversity and care about the success of our people, and we care about doing the right thing. We are
advancing clinical research while offering customers broader and deeper experience, scale, and focus, complemented by
continuity of delivery and speed to market. Consistent with our values, we seek to not only operate in compliance with
applicable laws but also to positively influence our global workforce, the communities that we operate in, the environment
and society as a whole. Doing so makes us a stronger, more resilient organisation by every measure.
Our business model is described in the "Principal activities, business review and future developments" section of the
Directors’ Report.
Our core values underpin our mission and drive a culture and mind-set of ownership at ICON. "Own it at ICON", as set out
below, is a statement of values that has remained at the very heart of ICON’s culture, encouraging our people to seize the
opportunity and bring flexibility, innovation, and determination to every situation. We believe our culture of ownership
personifies who we are as a company — it also helps us apply our expertise, collaborate to get things done, and succeed at
our mission.
17 Directors’ Report (continued)
Our values underpin how we work together to deliver on our mission to improve the lives of patients by accelerating the
development of our customers’ drugs and devices through innovative solutions. These values and our Code of Ethical
Conduct, which underpins these values, form the core of what we do, and how we do it. It applies to all of our officers,
directors, employees, consultants and agents globally. All employees and temporary workers are mandated to complete
annual global ethics training.
At ICON, we care about conducting business sustainably. We care about our people, patients, and the communities in which
we live. We care about doing the right thing and we are committed to working to the highest ethical standards and
demonstrating our commitment to honesty, transparency, and quality. As a testament to our commitment, we launched our
“ICON Cares” program at the start of 2023 which incorporates all our Environment, Social and Governance (ESG), Diversity,
Inclusion and Belonging (DIB), and CSR initiatives into one program. ICON’s Environment, Social, and Governance
Committee ('ESG Committee') brings together all these initiatives and efforts under one umbrella to ensure consistency,
enhance monitoring, reveal areas for development and facilitate reporting to the Board. The ESG Committee is chaired by
the Chief Administrative Officer and General Counsel (CAO), who is responsible for reporting to the ICON executive
leadership team, the Nominating, Sustainability and Governance Committee and the Board on ESG matters. The CAO
reports on ESG matters to the Nominating, Sustainability and Governance Committee quarterly and reports to the Board at
least annually whilst also providing periodic ESG updates to the executive leadership team.
The ESG Committee is focused on developing our strategy and initiatives relating to the environment, social matters, health
and safety, community engagement, corporate governance, sustainability, and other public policy matters relevant to the
Company. The ESG Committee is a cross-functional management committee of the Company including representation from
facilities, health and safety, corporate communications, finance, legal, investor relations, procurement, commercial,
marketing, and human resources departments. The Committee meets regularly to assist and support executive
management and the Nominating, Sustainability and Governance Committee of the Company in:
•
•
•
determining and setting the strategy relating to ESG matters;
developing, implementing and monitoring initiatives and policies based on that strategy; and
communicating these strategies, initiatives, and their results.
We are committed to building and developing our ESG strategies and reporting. In 2020 we launched our ESG page on the
ICON website and have an internal ICON Cares ESG page on our MyICON intranet portal to engage with our employees
and provide information and updates relating to ESG matters and our commitment to sustainability. In 2021, as a testament
to our commitment to managing ICON responsibly and sustainably, we became a participant in the United Nations Global
Compact (UNGC), a set of Ten Principles covering the areas of human rights, labor, environment, and anti-corruption. In our
18 Directors’ Report (continued)
2022 ESG report, released in 2023, we reported under the Global Reporting Initiative (GRI, 2021) standards, the Task Force
on Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) index. Our
report summarises our current policies, priorities, commitments, achievements, and progress in respect to ESG matters.
ICON received a gold medal from EcoVadis for our 2023 submission in recognition of our environment, social and
governance efforts throughout ICON. The ESG page on our website is available at https://www.iconplc.com/about/esg/.
The global landscape in respect to regulatory and legislative requirements relating to ESG reporting and disclosure
requirements is rapidly evolving, and we are monitoring potential requirements so that we are positioned to adhere to any
additional requirements in due course. This includes mandatory reporting under the Corporate Sustainability Reporting
Disclosure (CSRD) from the EU and the SEC Climate Risk Disclosure Rule which is pending finalisation.
Building a sustainable future – our commitment to the United Nations Sustainable Development Goals
As a global company, we maintain an ethical and sustainable presence in hundreds of locations worldwide. At its core,
ICON’s mission is to improve health and lives. We are also committed to contributing to the 2030 United Nations
Sustainable Development Goals (SDGs) and are proud that our work contributes to their advancement.
Our research, our work with customers and patients and our on-the-ground efforts to meet the diverse needs across our
communities align with the SDGs. We focus these efforts on a subset of themes where we have identified the greatest
opportunity to effect change:
•
•
•
•
•
•
•
SDG 3 – Good health and well-being
SDG 5 – Gender equality
SDG 9 – Industry, innovation and infrastructure
SDG 10 – Reduced inequalities
SDG 12 – Responsible consumption and production
SDG 13 – Climate action
SDG 17 – Partnerships for the goals
Further details on the ways ICON contributes to these SDGs and their targets are set out in our ESG Report.
Environmental Matters: Conducting business sustainably
ICON is committed to delivering excellence in care to our communities. To improve our overall sustainability, this
commitment means tracking and improving our environmental performance across all business activities. We achieve this
by pursuing sustainability strategies that recognise the impact of our operations as a CRO on the environment, addressing
greenhouse gas (GHG) emissions, energy use, waste generation and procurement-related activities. Our employees,
directors, officers, contractors, and temporary workers are expected to support our sustainability objectives.
Our Global Environmental Management Policy and Environmental Management Plan is part of our ICON Cares program for
managing environmental sustainability initiatives. The implementation of the plan is led by our facilities team, reporting to
our Chief Administrative Officer and General Counsel (CAO). The CAO is responsible for reporting on the ICON Cares
program and environmental initiatives and progress to the ICON executive leadership team and Nominating, Sustainability
and Governance Committee and the Board.
ICON set environmental goals around the use of renewable energy and carbon emissions in 2019 and we are working
towards achieving these goals which are as follows:
100% renewable electricity by 2025
•
•
•
20% reduction in kilowatt hours (kWh) of electricity by 2030
Net zero carbon emissions on Scope 1 & 2 by 2030
In April 2023, following Board approval, ICON made a commitment to the Science Based Targets initiative (SBTi), when we
submitted our near-term commitment letter to the SBTi. In February 2024, the Board approved furthering our SBTi
commitment to include a long-term company-wide emissions reduction target in line with science-based net-zero.
Accordingly, we have submitted our commitment letter to SBTi to set net-zero targets, including a long-term science-based
target and are preparing to submit both our near-term and long-term science-based targets for validation.
We have programs in place to manage and minimise climate impacts of business activities. To continue to improve
processes and reduce our environmental impact, we track, calculate, and report our Scope 1, Scope 2 and Scope 3
business travel GHG footprint. We apply the GHG Protocol Corporate Standard, which is the global corporate accounting
and reporting standard for calculating carbon emissions. Carbon Trust provides annual verification of our Scope 1 and 2
19 Directors’ Report (continued)
GHG emissions data. In 2023, we worked with Carbon Trust to conduct a full Scope 3 footprint, which we are analysing with
a view to annual public reporting in due course.
Aligned with our goal to be net-zero on Scopes 1 and 2 by 2030, ICON’s combined Scope 1 and 2 GHG emissions have
decreased since 2018. We recognize that although the combined Scopes 1 and 2 emissions have fallen year-on-year,
ICON’s Scope 1 emissions have increased slightly each year. To reach our net-zero goal, our decarbonization strategy is
currently focused on reducing Scope 2 emissions, the largest contributor to our Scope 1 and 2 footprint. Following on from
our Scope 2 emissions reduction efforts, we plan to launch efforts that target our Scope 1 emissions in the coming years.
In 2020, following pandemic-related closures and a reduction in business travel, our Scope 3 GHG emissions declined
significantly. Since 2021, as more normal operations resumed, we have seen an overall increase in our total GHG emissions
driven by an increase in business travel (Scope 3).
Although Scope 1 and 3 emissions have increased, we remain below our 2018 pre-COVID overall emissions, and are
committed to continue our work towards reducing emissions. Additionally, our emissions intensity has decreased
substantially as our business has grown. Since 2018, our emissions intensity per million in revenue and our emissions
intensity per FTE employee has decreased.
Moving forward, ICON expects to see further emission reductions relative to revenue and the number of employees due to a
reduction in offices, strategic energy efficiency projects and a flexible work policy that allows eligible employees to work from
home 40% of the time.
ICON participates in CDP (formerly the Carbon Disclosure Project) on an annual basis. CDP is a globally recognised
organisation that allows companies to measure and manage their environmental impacts. We received a B score from CDP
for 2023 on our 2022 Climate Change response which was an improvement on the C score that we received from CDP in
2022 on our 2021 Climate Change response. The improved score is a reflection of our efforts and the progress that we are
making in respect to environmental sustainability. Our CDP responses are available at https://www.cdp.net/en/.
We are focused on reducing energy use and increasing renewable energy use across our global operations as specific
environmental goals. Waste reduction is embedded into our environmental policies and practices and is one of the
objectives of ICON’s Environmental Management Policy.
ICON leases most of our offices and facilities, and therefore we work closely with our landlords and leasing agents to
implement measures to ensure we operate in an environmentally sustainable manner. Throughout 2023, we continued real
estate harmonisation efforts which resulted in downsizing or closing 19 locations to align with new working styles and
business needs, this also helps to reduce our environmental footprint. Experts from our real estate team factor
environmental considerations into decisions around new office locations or building improvements. We’ve also implemented
a series of measures globally to reduce the local footprint of our offices while promoting comfort and efficiency. These
include:
•
•
•
•
•
•
•
Reducing paper consumption by promoting paperless office processes and defaulting double-sided output.
Selecting building materials and vendors for their low environmental impact.
Building recycling areas into business centers and kitchens/canteens.
Planting green spaces to improve internal air quality.
Installing energy-efficient LED lighting.
Purchasing recycled office supplies.
Using motion detectors.
We require our suppliers to abide by our Global Supplier Code of Conduct which includes a commitment to comply with
applicable environmental laws and regulations, our expectations around waste management and sustainable use of
resources.
We care about making a positive impact on the communities in which we work and live and we have aligned our community
efforts to a broader vision for social impact, including by aligning priorities with our organisational goals of diversity,
inclusion, and belonging.
For further details on risks relating to environmental, social and governance matters refer to Appendix A: Risk Factors.
20 Directors’ Report (continued)
Social and Employee matters
Community Engagement
Our community engagement activities are focused on two core areas:
•
•
Supporting education and building closer ties between industry and academia; and
Improving the welfare of people in the communities in which we live.
Supporting education and building closer ties between industry and academia
A core area of community support includes building ties between industry and academia to inspire the next generation of
leaders in business and science. Our existing partnerships continue with the following organisations:
•
•
•
The ICON-McKeon Research Fellowship in Motor Neuron Disease ('MND') in honor of Mr. Declan McKeon, former
Board member, acting Chairman, Lead Independent Director and Chair of the ICON Audit committee. The ICON-
McKeon Research Fellow in MND carries out research in the areas of machine-learning and artificial intelligence to
derive insights from multimodal clinical, imaging neuro-electric signaling, in the context of the neurodegenerative
disease of ALS.
Partnership with Trinity Centre for People with Intellectual Disabilities ('TCPID') - TCPID situated within the School
of Education, Trinity College Dublin, aims to promote the inclusion of people with intellectual disabilities in
education and society. The Centre provides people who have intellectual disabilities with the opportunity to
participate in a higher education program designed to enhance their capacity to fully participate in society as
independent adults. The 2-year education program includes work placements and internships to enable students to
experience and participate in the work environment. In 2023, we were delighted to host a student visit from TCPID
students to our global headquarters in Dublin, where they enjoyed learning about the different phases of a clinical
trial and also experienced a working laboratory during a tour of the facility.
Partnership with Junior Achievement to inspire schoolchildren. Junior Achievement encourages young people to
remain in education and teaches them the skills they need to succeed in a changing world. ICON volunteers take
time out of their working day to deliver Junior Achievement programs, teaching primary and secondary-level
students valuable business, STEM (Science, Technology, Engineering & Mathematics) and entrepreneurship skills
that will serve them throughout their professional lives.
Aligned with our ambitions to build closer ties between industry and academia, create a more diverse graduate pool of
talented and ambitious STEM professionals who can help to ensure the future success of the life sciences industry, and
provide increased opportunities for underrepresented groups to study STEM courses, our STEM scholarship program
continued in 2023. Through the program, ICON is partnering with three universities in Ireland – Dublin City University (DCU),
Trinity College Dublin (TCD) and the University of Limerick (UL) – as well as with the Thurgood Marshall College Fund
(TMCF) in the US, to fund 33 scholarships for students of STEM courses. TMCF is a not-for-profit organisation that supports
nearly 300,000 students attending its 47 member-schools that include publicly-supported Historically Black Colleges and
Universities (HBCUs).
Improving the welfare of people in the communities in which we live
Through volunteering, donations and other charitable initiatives, our employees across the world are making a positive
difference to their communities. We support causes that are important to our employees and have several programs that
support the welfare of people in our local communities. In November 2023, 360 ICON colleagues from across the globe
united in person and virtually to take part in Run in the Dark for the fourth conservative year. Team ICON raised $10,000 to
support Mark Pollock's Collaborative Cures foundation whose mission is to bring people together to cure paralysis in our
lifetime. A team of 125 ICON cyclists from 24 countries also participated in our annual ICON cycle challenge, which covered
350km from Zurich to Munich, across 3 days and which raised funds for Mission Rabies, a global charity that aims to control
the spread of rabies through vaccination of dogs in endemic areas.
Since 2012, ICON’s annual employee-nominated charity donation program has supported over 100 charities worldwide,
donating $10,000 to each organisation. The selected organisations focus on a range of critical issues, such as building a
more inclusive society, improving child welfare and supporting patients who are battling chronic diseases. The chosen
charities align with ICON’s corporate mission, our ICON Cares program diversity and inclusion goals and support our efforts
to advance the United Nations Sustainable Development Goals (SDGs). In addition, ICON donated to UNICEF in support of
humanitarian efforts following the devastating earthquakes in Syria and Turkey.
21 Directors’ Report (continued)
Talent and People
Our people are core to our ability to deliver our services and drive better patient outcomes. Through diversity, inclusion and
belonging, industry-leading talent management practices, a sincere attention to our employees’ needs, well-being and health
and safety, we continue to power the potential of together.
At the core of our strategy is our people
People have long been central to our mission to improve the lives of patients by accelerating the development of our
customers’ drugs and devices through innovative solutions. We encourage our people to bring flexibility, innovation, and
determination to every situation. By doing so, our people can build exciting and rewarding careers, and deliver results to
bring life-changing medicines to market and to maintain our success as an industry leader.
Learning and development of our staff is a key focus for us
Our leadership and talent programs contribute to the enhanced retention of our employees, better project deliverables for
our customers and the enhanced financial performance of the business.
We aim to be an industry leader where talented people come to do important work and where our employees can shape the
future of healthcare, grow their careers, and reach their full potential. We have long held a deep commitment to cultivating
strong people practices. This includes competitive total rewards packages along with a focus on continuous learning. We
nurture a culture of development and aim to boost engagement by supporting our people’s growth, both personally and
professionally. We are dedicated to finding opportunities for our employees to grow and develop.
Our success depends on the knowledge, capabilities, and quality of our people. To improve their skills, we are committed to
providing continuous learning. This commitment is underpinned by clearly defined competencies, which offer employees a
clear path along which to develop skills and advance their careers.
To support employees at every stage of their career journeys, training and development programs are aimed at advancing
scientific, technical, and business knowledge as well as behavioural competencies. Programs include Corporate and
Functional Onboarding for all ICON employees tailored CRA academies; Data Management and Biostats & Programming
Academies; a Commercial Skills Academy; a range of project management curricula, therapeutic-focused programs, and
People Leader development programs.
Our People Leader development program focuses on providing our People Leaders with the relevant skills to effectively
manage themselves, their team and their business, including leveraging psychometrics to raise awareness of their
behavioural preferences and the preference of others. ICON also invests in Harvard Manage Mentor, an online learning
platform providing People Leaders with access to learning available at any time with topics ranging from change
management, diversity & inclusion, retaining employees and developing employees.
We provide our people with a personalised and flexible learning experience, delivered through a combination of in-person
and technology-driven programs that suit their learning styles and can flex to suit their schedules. Through our industry
leading Career Hub, ICON employees are encouraged to broaden their scientific, technical, leadership, and business
knowledge. By tapping into development programs and partnerships with leading academic institutions, team members can
use the hub to develop competencies that advance their careers. We also collaborate with UCD Smurfit School Executive
Development to deliver customised leadership development programs for global employees.
As an organisation we are keen to hear directly from our employees
To attract and retain the best talent, we must listen and respond to employees’ needs. This begins with a focus on diversity,
inclusion and belonging, and extends to every aspect of our work, from recruitment and onboarding, to training,
engagement, enablement, and reward. We pursue best-in-class approaches to building employee engagement and these
include, among others:
•
•
•
•
Comprehensive global employee surveys, which measure how people feel about their work and whether they feel
they have the tools to do their jobs well. Feedback from these studies informs detailed action plans at the group,
function, and team level.
Pulse check surveys, which are smaller-scale studies designed to measure employee sentiment on specific topics
and initiatives.
Fostering an environment of diversity, inclusion and belonging where everyone is valued.
Stay interviews to help managers understand why staff stay and to uncover what might put them at risk of
departing.
22 Directors’ Report (continued)
•
Skip-level meetings to develop trust and rapport between senior leaders and employees.
Our listening strategy supports our efforts to reduce employee turnover, which we monitor closely through analytics.
Qualitative information is collected through formal exit interviews and, where we believe they’ll make an impact, we
intervene via retention plans and related efforts.
Employee well-being
ICON’s commitment to improving health and enriching lives extends beyond the work we do with our customers. Employees
worldwide have access to tools and resources designed to support all facets of their well-being, from physical to financial to
psychological and beyond.
Our global Employee Assistance Program (EAP) ensures that all employees, and their families, have access to a range of
different, confidential resources and experts to help them better manage their working life and personal life. Employees can
also access a wide range of tools, information and support services online in local languages.
Health and safety
At ICON, the health and safety of our employees, customers and clinical trial patients are our most important priorities. We
take guidance from global and regional health authorities and governments to protect the safety and welfare of employees,
as well as abide by government directives. Our global health and safety management system ensures we deliver on all local
and national requirements. Our priority objectives are the safety of our staff, clinical trial patients, protecting the
environment, maintaining business continuity, and ensuring all sensitive health and safety data is protected.
We are committed to providing a safe working environment for our people. We achieve this goal by working in ways that
protect the safety, health, and welfare of all our employees, clinical trial patients, and visitors. Risk assessment is the basis
of the safety management system, and we work to identify, mitigate, and monitor existing and emerging health or
environment risks that may be associated with our business activities.
Fostering diversity, inclusion and belonging
We are committed to being a workplace where all employees are included and feel a sense of belonging. As a global,
values-driven organisation, we acknowledge and celebrate our differences in gender, ethnicity, culture and abilities.
Respecting diverse viewpoints and experiences is foundational to our interactions with each other and with our patients,
customers and suppliers. Moreover, we strive to build teams that reflect the various geographies and communities in which
we live and work and the patients we serve.
We recognise the critical importance of diversity in clinical trials ensuring all types of patients who will eventually receive
therapies are represented on clinical trials, as well as offering clinical trials as a care option for those who may not otherwise
have access to medical treatment. In furtherance of our aim to increase diversity within clinical trials, we appointed a Global
Head of Diversity in Clinical Trials to lead a team of cross functional experts who can advise customers how to build
diversity at every stage of the clinical trial.
Diversity, inclusion, and belonging (DIB) are fundamental to our culture and values. Diversity makes us more innovative and
more creative. ICON’s approach to DIB is a key focus area. To reflect this, inclusion is one of our core values and our DIB
strategy revolves around four key ambitions: our people, our patients, our customers, and our communities.
23 Directors’ Report (continued)
For each of these ambitions, ICON’s DIB Operating Committee brings together individuals from across the company to
create and execute work streams that are committed to advancing our DIB strategy. A central team manages the
overarching efforts, ensuring alignment and collaboration across each of the ambitions. Each ambition has a sponsor from
ICON’s executive leadership team who advocates for and supports the agenda, in addition to providing leadership.
The growth of community groups enabled ICON to retire the role of the DIB advocates who were recruited from across the
organisation to support leadership and the DIB Operating Committee with DIB strategy and activities. Now, all community
group members and allies act as advocates across the company. Their aim: to align activities, promote events and share
information back to their service lines. It is our aspiration that all our employees will act as DIB advocates.
We believe in a workplace culture that embraces diverse perspectives and empowers our team members to grow — at
work, at home and in their communities. The key areas of focus for our diversity, inclusion, and belonging agenda include
talent management, country-level inclusion policies, rewards, training, mentoring and communications.
24 Directors’ Report (continued)
The DIB community groups we have at ICON are:
DAWN: The Disability Awareness Network is a community group focused on developing
and fostering a mind-set towards creating an inclusive workplace and working
environment where everyone
treated equally with respect and dignity,
irrespective of any visible or hidden disabilities.
is
EmbRACE: EmbRACE is a community group supporting all race and ethnic backgrounds in
creating an inclusive workplace culture. Our ambition is to build a culture that is
inclusive, collaborative and accountable, supporting all our people and removing
barriers that prevent them from doing their best work and being their true selves at
ICON.
NOW@ICON: The Networking Organization for Women at ICON is committed to inspiring and
connecting current and potential leaders through an inclusive environment of
targeted initiatives and supportive mentorship.
Pride@ICON: The Pride group supports LGBTQ+ colleagues and allies, ensuring that no matter
where employees are in the world, our offices are a safe space where they are
welcomed, respected, and valued.
SPACE: SPACE is a Community Group that Supports Parents And Carers Everywhere. We
aim to create awareness and education, with a view to building an effective SPACE
community that provides individual, group and regional support connections for
parents and carers.
In 2023 each community group launched a mentoring program to support networking and career development at ICON.
This was a huge success with over 300 mentor and mentee matches across the five community groups with mentors and
mentees receiving training and toolkits to make the most of their mentoring relationship.
As a testament to our commitment to diversity, ICON are aiming for gender parity at the VP level and above by 2025. As at
31 January 2024, women represent 46% of the positions at the VP level and above. Our strong focus on talent
management, succession planning and talent development ensures we work towards building strong talent pipelines for VP
level roles with equal number of female and male candidates shortlisted for all our senior roles.
Establishing a truly inclusive workplace requires offering fair pay. Using best-in-class methodology, we regularly review
salary ranges to establish fair pay among employees regardless of gender, race or ethnicity. We also consider legitimate
business factors that explain differences, such as performance, tenure and experience. ICON has made and will continue to
make significant investments in organisational design structures, tools and education that uphold and support our pay
principles.
We are committed to ensuring fair employment practices. For every jurisdiction in which we operate, we act in compliance
with relevant laws relating to labour rights and labour relations as well as market competitive benefits. We believe in fair and
equal treatment for all our people, without regard to gender, race, ethnicity, sexual orientation, marital status, physical or
mental disability, age, pregnancy, veteran status, nationality, religion, or any other legally protected status. We do not
tolerate our employees being subjected to physical, sexual, racial, psychological, verbal, or any other form of harassment.
We encourage our employees to report any issues of harassment or discrimination. We prohibit retaliation against any
employee who rejects, protests, or complains about unlawful discrimination or harassment.
For further details on risks relating to employee matters refer to Appendix A: Risk Factors.
25 Directors’ Report (continued)
Human rights
ICON is committed to human rights and in 2021, ICON became a participant in the UN Global Compact (UNGC), signalling
our commitment to uphold the UNGC’s 10 Principles, including those related to human rights across our global operations.
Our business model and our policies, including our Global Code of Ethical Conduct and Global Supplier Code of Conduct,
are intended to fully comply with applicable human rights legislation in the countries where we operate. Our zero-tolerance
policy on forced labour, slavery, and human trafficking is defined clearly in these policies, which are available to employees,
suppliers, customers, and the public.
We are opposed to forced labour, slavery, and human trafficking. We will not knowingly support or conduct business with
any organisation involved in such activities. We do not employ anyone below the minimum employment age in the
jurisdictions in which we operate.
Our Global Supplier Code of Conduct incorporates the Pharmaceutical Supply Chain Initiative (PSCI) principles for
responsible supply chain management, including for labour. Before doing business with ICON, suppliers must certify that
they will comply with the ICON Global Supplier Code of Conduct or their own materially equivalent internal code, which
includes human rights protections. We perform pre-engagement due diligence on our suppliers, including in relation to
labour issues, which we support through periodic re-screening. We hold our suppliers accountable for meeting their
contractual obligations. Contract non-compliance can result in termination of the business relationship with the supplier and
exclusion from future business.
For further details on risks relating to environmental, social and governance matters refer to Appendix A: Risk Factors.
Ethics and Compliance
ICON’s commitment to ethics and integrity is embedded in our company values. We act with integrity and integrate ethical
principles into our business practices and culture. ICON’s Global Code of Ethical Conduct (the Code) establishes our core
principles and standards for honest, fair, and ethical behaviour. This Code addresses the core values expected of our
people in our internal interactions with each other as well as in external dealings with patients, customers, healthcare
professionals, regulators, investors, vendors and other third parties.
Our Ethics and Compliance program is designed to protect the interests of the company and its shareholders by preventing,
detecting, investigating and responding to potential misconduct and violations.
The Ethics & Compliance team (E&C) provides day-to-day independent oversight for the program. The team works
collaboratively with risk and compliance functions and leadership across the business to align on and optimise its reach and
impact. The Head of E&C provides day-to-day independent oversight for the program. The team is independent of the
business and reports to the Deputy General Counsel, who reports to the Chief Administrative Officer and General Counsel
(CAO). The CAO reports on the program to ICON’s executive leadership team, the Nominating, Sustainability and
Governance Committee and the Board. The program supports all functional areas globally and is dedicated to the
implementation of standardised global policies, procedures, training, guidance, communications, monitoring, investigations,
issue management, assessing compliance-related risk and mitigations, and reporting to ensure the overall compliance
program is effectively functioning. Where appropriate, the program also implements regional and/or country specific policies,
procedure, training and guidance.
ICON has incorporated a third-party system, Ethics Line, for employees and third parties to confidentially report ethics and
compliance questions, as well as concerns, and to track reports through follow-up and resolution. An independent company
administers this hotline, which is available all hours of every day and can accommodate calls in over 75 languages. These
tools also provide visibility into our risks while highlighting opportunities to address them. ICON’s Ethics and Compliance
program will continue to grow and evolve in response to changes in our business and in the global business climate.
All personnel are required to receive ethics and compliance training during initial onboarding and through annual refresher
sessions. Training modules explain the many channels available for reporting suspected unethical or illegal practices. The
training supports our values and our ways of working and incorporates the key principles of our policies and codes and
includes interactive scenarios where applicable.
At ICON, we promote a Speak Up culture that encourages compliance, openness, and accountability without retaliation. The
Speak Up Policy aims to support our culture and values and seeks to encourage the prompt reporting or surfacing of
concerns or violations about values, ethics or other standards without fear of retaliation. Reported ethics concerns and other
ethics and compliance-related data are reported via the CAO to the Board as appropriate.
For further details on risks relating to ethics and compliance refer to Appendix A: Risk Factors.
26 Directors’ Report (continued)
Anti-bribery and Corruption
ICON is guided by the foundational principle that we do not tolerate bribery or any other form of corruption or fraud. Our anti-
bribery and anti-corruption (ABAC) program is a core element of our Ethics and Compliance program. ICON and all ICON
directors, employees, consultants, agents and all third parties acting on ICON's behalf must act in compliance with
international laws and regulations relating to bribery, corruption, and illicit payments, including the US Foreign Corrupt
Practices Act and the UK Bribery Act 2010.
ICON maintains the ISO 37001:2016 certification for our Anti-Bribery Management System, which establishes the
framework for the controls that prevent, detect and mitigate the risk of bribery. Our program is designed to ensure our
compliance with anti-corruption laws, including due diligence, training, policies, procedures, and internal controls.
Bribery and corruption remain a business risk as we conduct our business across the globe and enter partnerships and
collaborations. There is no certainty that all employees and third-party business partners (including our vendors, suppliers,
agents, contractors, and other partners) will comply with anti-bribery laws. When working with third parties, we are
committed to working with only those who embrace high standards of ethical behaviour consistent with our own. Bribery and
corruption risks are a focus of our third-party diligence and management process. We hold our suppliers accountable for
meeting their contractual obligations with ICON, including commitments that are made with regard to our Global Supplier
Code of Conduct and regulatory compliance. Contract non-compliance can result in termination of the business relationship
with the supplier and exclusion from future business with ICON.
ICON's internal audit teams conduct ABAC program audits. Internal Audit focuses on testing for compliance and design
effectiveness of the overall ABAC program. Internal Audit incorporates an assessment of ABAC measures in all audits, as
appropriate. In this approach, bribery and corruption risks are incorporated into the risk assessment and scoping process of
each audit.
For further details on risks relating to Anti-bribery and Corruption refer to Appendix A.
Privacy and Information Security
Data privacy and information security are fundamental to our business and key to retaining customers, building investors’
trust, protecting patients, and complying with global and regional regulations. We recognise and respect that our customers,
employees, patients, and all those who do business with us expect that we will protect their personal information in
accordance with our legal obligations and policy commitments.
Our Global Data Protection Policy regulates the processing of personal data in accordance with the applicable data
protection laws of the countries where we operate, including Europe’s General Data Protection Regulation (GDPR)
framework. This policy governs ICON’s and its employees’ obligations concerning the processing of personal data, including
core privacy issues such as how we address data subject rights, data protection impact assessments and our obligations to
maintain records of processing activities (ROPAs).
ICON has a separate Personal Data Incident and Breach Response Policy and Process that governs the management of
personal data incidents and breaches within ICON. The policy requires incidents to be reported to ICON’s Global Data
Protection Officer (DPO) and Privacy Team, who manage them in collaboration with relevant internal stakeholders (e.g., IT
Security, Quality & Compliance), to ensure we comply with our legal and contractual obligations, including our reporting
obligations. In 2023, in combination with our existing ISO 27001 certification, ICON’s data protection policies and
procedures were certified to ISO 27701. Our privacy program is overseen by the CAO.
Our people and partners play a critical role in safeguarding data. ICON has training in place for all employees and
contingent workers on information security and privacy practices so that they understand their responsibilities with respect to
data security and privacy. ICON has also established a robust Privacy and Security Champion (PSC) network. The PSC
network acts as an extension of the Privacy and Information Security teams. In line with the PSC charter, champions provide
a key touch point in relevant business units, bolster awareness of ICON’s respective privacy and security programs and
provide direct support in response to priorities dictated by ICON’s Privacy and Security Council (chaired by ICON’s Global
Data Protection Officer and Head of Information Security).
For further details on risks relating to information security and privacy refer to Appendix A.
27 Directors’ Report (continued)
Sustainable procurement
ICON maintains policies and processes to support responsible, sustainable, and ethical business practices. Our goal is to
source from suppliers whose values align with our own, who share our commitment to diversity and inclusion, and who are
socially and environmentally responsible and conscious.
We manage our suppliers through our Global Procurement department. The onboarding of all new suppliers is completed
through a robust centrally managed due diligence process. Environmental sustainability, bribery, and corruption risks are a
focus of our third-party assessment and management process.
ICON performs pre-engagement due diligence on our suppliers. This includes screening of sanctions lists, debarment, and
adverse media. Suppliers are continuously monitored against sanctions and debarment lists and are periodically re-
screened. Suppliers deemed higher risk are subject to enhanced due diligence and controls, which may include periodic
training, auditing, and assessments.
We require our suppliers to abide by our Global Supplier Code of Conduct which incorporates the Pharmaceutical Supply
Chain Initiative (PSCI) principles for Responsible Supply Chain Management and sets out our standards and expectations
regarding:
•
•
•
•
Ethics and compliance
Labor and human rights
Health and safety
Environmental stewardship
Our Global Supplier Code of Conduct also outlines channels to report concerns or grievances related to our suppliers, such
as our Ethics Line. We operate a strict anti-retaliation policy and expect suppliers to do the same. We hold our suppliers
accountable for meeting their contractual obligations, including commitments relating to the Global Supplier Code of
Conduct and regulatory compliance. Contract non-compliance can result in termination of the business relationship and
exclusion from future business with our company.
To further support the development of our sustainable procurement program, ICON has engaged with EcoVadis, CDP and
Supplier IO to help assess our key suppliers and gather data around sustainability maturity, GHG emissions and diversity
status and classifications. This data allows us to factor sustainability related factors into our supplier selection activities and
embed sustainability into our procurement practices.
For further details on risks relating to sustainable procurement refer to Appendix A: Risk Factors.
Directors’ compliance statement
The Directors, in accordance with Section 225(2) of the Companies Act, acknowledge that they are responsible for securing
the Company’s compliance with its relevant obligations as defined within the Companies Act, (hereinafter called the relevant
obligations).
The Directors confirm that:
•
•
•
a compliance policy statement has been drawn up setting out the Company’s policies with regard to such
compliance;
appropriate arrangements and structures that, in their opinion, are designed to secure material compliance with the
Company’s relevant obligations, have been put in place; and
a review has been conducted, during the financial year, of the arrangements and structures that have been put in
place to secure the Company’s compliance with the relevant obligations.
Auditor
In accordance with Section 383(2) of the Companies Act, KPMG, Chartered Accountants, will continue in office.
While there has been no change yet in our auditor, in 2023, the Audit Committee of the Company engaged in a competitive
audit tender process for the position of statutory auditor. Based on the results of this process, the Audit Committee is
recommending that Ernst & Young be appointed as statutory auditors and independent registered public accounting firm to
the Company in respect of the financial year ending 31 December 2025. Ernst & Young's appointment will be subject to the
passing of an ordinary resolution confirming the appointment at the Company's 2025 Annual General Meeting.
28 Directors’ Report (continued)
KPMG, our current auditor, who will audit the financial statements for the year ending 31 December 2024, is expected to
resign shortly after completion of the audit of the Company's financial statements for the year ending 31 December 2024.
During the two years ended 31 December 2023 and 31 December 2022 and any subsequent interim period there were no
disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in
connection with their opinion to the subject matter of the disagreement.
On behalf of the Board
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
23 April 2024
29 Statement of Directors’ Responsibilities in respect of the Directors’ report and the
financial statements
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law
and regulations.
Company law requires the directors to prepare Group and Company financial statements for each financial year. Under that
law, the directors are required to prepare the Group financial statements in accordance with IFRS as adopted by the
European Union. The directors have elected to prepare the Company financial statements in accordance with FRS 101
Reduced Disclosure Framework and applicable law.
Under company law the directors must 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 and of the
Group’s profit or loss for that year.
In preparing the Group and Company financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
•
•
state whether applicable Accounting Standards have been followed, subject to any material departures disclosed
and explained in the financial statements;
assess the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group or Company or to cease
operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time
the assets, liabilities, financial position of the Group and Company and the profit and loss of the Group and which enable
them to ensure that the financial statements comply with the provision of the Companies Act 2014. The directors are also
responsible for taking all reasonable steps to ensure such records are kept by its 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 a 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Group’s and Company’s website www.iconplc.com. Legislation in the Republic of Ireland concerning the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
30 Independent Auditor’s Report to the members of ICON plc
Report on the audit of the financial statements
Opinion
We have audited the financial statements of ICON plc (‘the Company’) and its consolidated undertakings (together, “the
Group”) for the year ended 31 December 2023, set out on pages 38 to 148, which comprise the Consolidated Statement of
Profit and Loss, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, Company Statement of Financial
Position, Company Statement of Changes in Equity, and related notes, including the material accounting policies set out in
note 1 of the consolidated financial statements.
The financial reporting framework that has been applied in the preparation of the Group financial statements is Irish Law and
International Financial Reporting Standards (IFRS) as adopted by the European Union and, as regards the Company
financial statements, Irish Law and FRS 101 Reduced Disclosure Framework issued in the United Kingdom by the Financial
Reporting Council.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the assets, liabilities and financial position of the Group and the
Company as at 31 December 2023 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European
Union; and
the Company financial statements have been properly prepared in accordance with FRS 101 Reduced Disclosure
Framework issued by the UK’s Financial Reporting Council; and
the Group and Company financial statements have been properly prepared in accordance with the requirements of
the Companies Act 2014.
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 further described in the Auditor's responsibilities for the audit of the financial
statements section of our report. We have fulfilled our ethical responsibilities under, and we remained independent of the
Company in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including
the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to listed entities.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the entity’s ability to
continue to adopt the going concern basis of accounting included:
•
•
•
•
considered liquidity and available financial resources to maintain operations;
recalculated the financial and liquidity metrics noted in the assessment with reference to the primary financial
statements;
evaluated ICON’s probable financial obligations, being expected debt payments and commitments over the next
twelve months; and
considered ongoing legal matters
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’s or the Company’s ability to continue as a going
concern for a period of at least twelve months from the date when the financial statements are authorised for issue. Our
responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
31
Independent Auditor’s Report to the members of ICON plc (continued)
Detecting irregularities including fraud
We identified the areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements and risks of material misstatement due to fraud, using our understanding of the entity's industry, regulatory
environment and other external factors and inquiry with the directors. In addition, our risk assessment procedures included:
•
•
•
•
•
•
Inquiring with the directors as to the Group’s policies and procedures regarding compliance with laws and
regulations, identifying, evaluating and accounting for litigation and claims, as well as whether they have
knowledge of non-compliance or instances of litigation or claims.
Inquiring of directors as to the Group’s policies and procedures to prevent and detect fraud, as well as whether
they have knowledge of any actual, suspected or alleged fraud.
Inquiring of directors and the audit committee, regarding their assessment of the risk that the financial statements
may be materially misstated due to irregularities, including fraud.
Inspecting the Group’s legal correspondence.
Reading Board and audit committee meeting minutes.
Performing planning analytical procedures to identify any usual or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including companies and
financial reporting legislation. We assessed the extent of compliance with these laws and regulations as part of our
procedures on the related financial statement items, including assessing the financial statement disclosures and agreeing
them to supporting documentation when necessary.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have
a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or
litigation. We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery,
employment law, environmental law, regulatory capital and liquidity.
Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and regulations
to inquiry of the directors and inspection of regulatory and legal correspondence, if any. These limited procedures did not
identify actual or suspected non-compliance.
We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to
commit fraud. As required by auditing standards, we performed procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition. We identified a fraud risk in relation to the Group and Component
clinical trial service revenue, being the contract realizable value.
Further detail in respect of the clinical trial service revenue is set out in the key audit matter disclosures of this report.
In response to the fraud risks, we also performed procedures including:
•
•
•
Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting
documentation.
Assessing significant accounting estimates for bias.
Assessing the disclosures in the financial statements.
As the Group is regulated, our assessment of risks involved obtaining an understanding of the legal and regulatory
framework that the Group operates and gaining an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from
the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by
auditing standards would identify it.
32 Independent Auditor’s Report to the members of ICON plc (continued)
Detecting irregularities including fraud (continued)
In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing
non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by us, 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.
In arriving at our audit opinion above, the key audit matters were as follows (unchanged from 2022):
Group Key Audit Matters
Revenue recognition for certain clinical trial service contracts included in the total of $982 million (2022: $944 million)
Refer to note 1 on page 56 (significant accounting policies) note 3 on page 61 (financial disclosures)
33 Independent Auditor’s Report to the members of ICON plc (continued)
The key audit matter
How the matter was addressed in our audit
As discussed in Note 3 to the
consolidated financial statements,
the Company recognized revenue
of US$8,120 million for the year
ended 31 December 2023, a
portion of which relates to clinical
trial service revenue. As discussed
in Note 1 to the consolidated
financial statements, clinical trial
service revenue is recognized over
time, using an input measure,
being total project costs (inclusive
of third-party costs, principally
pass-through/ reimbursable
expenses) incurred at each
reporting period as a percentage of
forecasted total project costs, to
measure progress towards
satisfying the Company’s
performance obligation. The
transaction price is based on the
contract or latest change order
value, adjusted to reflect the
estimated realizable contract
value.
We identified the evaluation of
revenue recognition for a subset of
clinical trial service revenue as a
key audit matter. Complex and
subjective auditor judgment was
required to evaluate the
Company’s estimate of total
forecast project costs and the
estimated realizable contract
values.
For the reasons outlined above the
engagement team determine this
matter to be a key audit matter.
Our audit procedures included:
• We evaluated the design and tested the operating effectiveness of certain
internal controls related to the revenue process, including controls over total
forecast project costs and estimated realizable contract values.
• We tested the total forecast project costs and the realizable contract values for a
selection of clinical trial service contracts, by evaluating:
•
•
•
•
•
•
direct costs incurred, both during the year and cumulative over the life of
the contracts. We tested the accuracy and completeness of the direct
costs by comparing the amounts to source data
third-party costs incurred, both during the year and cumulative over the life
of the contracts. We tested the accuracy and completeness of the third-
party costs incurred by comparing the costs to invoices received
findings from interviews with operational personnel of the Company to
assess progress to date, the estimate of remaining costs to be incurred
and factors impacting the amount of time and costs to complete the
selected contracts, including an understanding of the nature and
complexity of the work to be performed
correspondence of amendments to the scope or contract value, if any,
between the Company and the customer for the selected contracts as part
of our evaluation of contract progress
quarterly movements in forecast project costs and project margins and
investigating the reasons for those movements, and
the reasonableness of the Company’s adjustments from total contract
value to arrive at realizable contract value. We confirmed total contract
value with customers and compared the assumptions used to derive the
adjustments from total contract value to realizable contract value to
underlying records.
• We also evaluated the Company’s methods, assumptions and data used to
accurately estimate total forecast project costs and realizable contract values,
by comparing historical estimates developed at contract inception to actual
results for a selection of clinical trial service contracts.
We found that the estimates and judgements used in determining the progress
towards completion and realisable contract value related to revenue recognition for
clinical trial services contracts were appropriate.
34 Independent Auditor’s Report to the members of ICON plc (continued)
Company key audit matters
Investment in subsidiary undertakings $7,149 million (2022: $7,086 million)
Refer to note 1 on page 54 (significant accounting policies) and note 2 on page 139 (financial disclosures)
The key audit matter
How the matter was addressed in our audit
Our audit procedures included:
• We compared the carrying value of investments in the Company’s Balance
Sheet to the net assets of the subsidiary financial statements.
• We compared the carrying value of subsidiaries to the market capitalisation
of the Company at December 31, 2023.
Based on evidence obtained, we found management’s assessment of the key
assumptions used in assessing the carrying value of investments in subsidiary
undertakings to be appropriate.
The carrying amount of the Company’s
investments in subsidiary undertakings
represents 97.2% (2022: 97.8%) of the
Company’s total assets.
The investment in subsidiary
undertakings is carried in the Balance
Sheet of the Company at cost less
impairment. At December 31, 2023, the
investment carrying value was $7,149
million.
We do not consider there to be a
significant risk of error related to the
carrying value of these investments, or
to be subject to a significant level of
judgements or estimation due to the
Group’s market capitalisation at year
end. However, due to their materiality in
the context of the Company financial
statements, they are considered an
area of audit focus and of significance
to the audit of the Company financial
statements
For the reasons outlined above the
engagement team determine this matter
to be a key audit matter.
Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at US$30.0 million (2022: US$30.0 million), determined
with reference to a benchmark of expected Group profit before tax (this estimated amount was based on earnings guidance
available at the planning stage of the audit adjusted for exceptional items) (of which it represents 4.2% (2022: 4.8%). Group
profit before tax is the most relevant metric to the users of the financial statements in assessing the financial performance of
the Group. The stability of the business environment was the key qualitative factor in determining the percentage to be
applied to the benchmark.
With respect to the Company, we based our calculation of materiality on total assets due to its nature as a holding company.
As the calculated materiality was higher than Group materiality, we restricted our materiality to US$30.0 million (2022:
US$30.0 million).
Performance materiality for the Group financial statements and Company financial statements as a whole was set at
US$22.5 million (2022: US$22.5 million) and US$22.5 million (2022: US$22.5 million) respectively, determined with
reference to benchmarks of expected Group profit before tax for the Group and total assets for the Company (of which it
represents 3.96% (2022: 3.57%) and 0.13% (2022: 0.31%) respectively). We applied this percentage in our determination
of performance materiality based on the level of identified control deficiencies during the prior period.
We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$1.5 million (2022:
US$1.5 million), in addition to other identified misstatements that warranted reporting on qualitative grounds. Our audit was
undertaken to the materiality and performance materiality level specified above and we applied materiality to assist us
determine what risks were significant risks and the procedures to be performed.
35 Independent Auditor’s Report to the members of ICON plc (continued)
Our application of materiality and an overview of the scope of our audit (continued)
The structure of the Group’s finance function is such that the majority of transactions and balances are accounted for by the
central Group finance team. We performed comprehensive audit procedures, including those in relation to the significant risk
set out above, on those transactions accounted for at Group level. Our audit covered 91% of total Group revenue and 98%
of total Group assets, including 100% of the Company’s revenue and total assets.
We identified 4 (2022: 4) components in the scope of our audit, we subjected 1 (2022:1) to a full scope audit for group
purposes.
Other information
The directors are responsible for the other information presented in the Annual Report together with the financial
statements. The other information comprises the information included in the directors’ report and appendix A. The financial
statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified material misstatements in the other information.
Based solely on our work on the other information undertaken during the course of the audit we report that in those parts of
the Directors specified for our consideration:
•
•
•
we have not identified material misstatements in the directors’ report or appendix A;
in our opinion, the information given in the directors’ report and appendix A is consistent with the financial
statements;
in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.
Our opinions on other matters prescribed by the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purpose of our audit.
In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and
properly audited and the Company’s financial statements are in agreement with the accounting records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion:
•
•
the disclosures of directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not
made.
the Company has not provided the information required by section 5(2) to (7) of the European Union (Disclosure of
Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the year
ended 31 December 2023 as required by the European Union (Disclosure of Non-Financial and Diversity
Information by certain large undertakings and groups) (amendment) Regulations 2018.
We have nothing to report in this regard.
Respective responsibilities and restrictions on use
Responsibilities of directors for the financial statements
As explained more fully in their statement set out on page 30, the directors are responsible for: the preparation of the
financial statements including being satisfied that they give a true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error; 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 they either intend to liquidate the Group or
the Company or to cease operations, or have no realistic alternative but to do so.
36
Independent Auditor’s Report to the members of ICON plc (continued)
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 fuller description of our responsibilities is provided on IAASA’s website at
https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements/
The purpose of our audit work and to whom we owe our responsibilities
Our 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 our report, or for the opinions we have formed.
John Corrigan
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
Ireland
24 April 2024
37
Consolidated Statement of Profit and Loss
for the year ended 31 December 2023
31 December 2023
31 December 2022
Pre-
exceptional
Exceptional
(Note 9)
Note
$’000
$’000
Total
$’000
Pre-
exceptional
Exceptional
(Note 9)
$’000
$’000
Total
$’000
Revenue
3
8,120,176
—
8,120,176
7,733,386
—
7,733,386
Direct costs
(5,719,025)
—
(5,719,025)
(5,521,522)
—
(5,521,522)
Other operating expenses
(1,347,694)
(89,566)
(1,437,260)
(1,334,235)
(70,838)
(1,405,073)
Operating profit
1,053,457
(89,566)
963,891
877,629
(70,838)
806,791
Share of equity method
investment losses
Financing income
Financing expense
Profit before taxation
Income tax expense
Profit for the financial
year
Earnings per share
Basic
Diluted
On behalf of the Board
19
4
5
6
7
8
8
(383)
5,014
(340,871)
—
—
—
(383)
5,014
(3,136)
2,345
(340,871)
(234,201)
—
—
—
(3,136)
2,345
(234,201)
717,217
(89,566)
627,651
642,637
(70,838)
571,799
(32,830)
14,203
(18,627)
(79,679)
14,165
(65,514)
684,387
(75,363)
609,024
562,958
(56,673)
506,285
7.42
7.36
6.21
6.13
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
38
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2023
31 December
2023
31 December
2022
Note
$’000
$’000
Profit for the financial year
609,024
506,285
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit liability
Items that are or may be reclassified subsequently to profit or loss, net of tax:
Currency translation differences
Tax benefit on defined benefit pension
Gain/(loss) on cash flow hedge
525
525
13,265
13,265
25
26,221
(88,444)
25
—
1,567
(754)
(3,728)
27,788
(92,926)
Other comprehensive income/(loss) for the year, net of tax
28,313
(79,661)
Total comprehensive income for the financial year
637,337
426,624
On behalf of the Board
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
39
Consolidated Statement of Financial Position
as at 31 December 2023
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Other non-current assets
Financial assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade receivables
Unbilled revenue (contract assets)
Other current assets
Current taxes receivable
Current asset investments
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Share capital
Share premium
Other undenominated capital
Share-based payment reserve
Other reserves
Foreign currency reserve
Merger reserve
Retained earnings
Total equity
LIABILITIES
Non-current liabilities
Non-current bank credit lines and loan facilities
Non-current lease liabilities
Non-current other liabilities
Non-current provisions
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Accounts payable
Unearned revenue (contract liabilities)
Accrued and other liabilities
Provisions
Current tax payable
Bank credit lines and loan facilities
Total current liabilities
Total liabilities
Total equity and liabilities
On behalf of the Board
Steve Cutler
Chief Executive Officer
Rónán Murphy
Director
Note
31 December
2023
$’000
31 December
2022
$’000
13
27
14
14
18
19
7
16
17
17
18
19
20
24
25
25
25
25
25
25
25
23
27
21
9
7
17
21
9
23
161,970
137,264
9,074,884
4,055,079
78,470
46,804
105,229
13,659,700
8,442
1,790,322
951,936
189,460
91,254
1,954
378,102
3,411,470
17,071,170
6,699
523,646
1,162
354,183
10,183
(148,844)
5,656,195
2,919,591
9,322,815
3,665,439
126,321
43,950
2,048
898,335
4,736,093
131,584
1,654,507
910,448
4,951
200,622
110,150
3,012,262
7,748,355
17,071,170
178,227
151,199
9,024,479
4,450,752
76,861
32,631
98,117
14,012,266
7,063
1,731,388
957,655
187,617
70,170
1,713
288,768
3,244,374
17,256,640
6,649
472,723
1,162
381,098
7,601
(175,065)
5,656,195
2,219,619
8,569,982
4,599,037
131,644
37,752
510
987,927
5,756,870
81,194
1,507,449
999,512
5,512
280,971
55,150
2,929,788
8,686,658
17,256,640
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42
Consolidated Statement of Cash Flows
for the year ended 31 December 2023
Profit for the financial year
Adjustments to reconcile net income to net cash generated from operating
activities
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment of long lived assets
Amortisation of intangible assets
Loss on equity method investments
Share-based payment
Acquisition related gain
Financing income
Financing expense
Defined benefit costs
Income tax expense
Unrealised foreign exchange
Other non cash items
Operating cash inflow before changes in working capital
Accounts receivable
Unbilled revenue
Unearned revenue
Other net assets
Cash provided by operations
Income taxes paid
Employer contribution defined benefit pension scheme
Interest received
Interest paid
Net cash inflow from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of subsidiary undertakings
Sale/maturity of current asset investments
Purchase of current asset investments
Proceeds from sale of financial assets
Purchase of financial assets
Net cash used in investing activities
Financing activities
Drawdown of bank credit lines and loan facilities
Repayment of bank credit lines and loan facilities
Repayments of obligations under lease liabilities
Tax benefit from the exercise of share options
Proceeds from exercise of share options, RSUs and PSUs
Share issuance costs
Repurchase of ordinary shares
Share repurchase costs
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Effect of exchange rate changes
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Note 31 December
2023
$’000
609,024
31 December
2022
$’000
506,285
13
27
9
14
19
12
15
4
5
7
4
14
15
19
19
19
23
23
48,158
41,982
8,686
537,792
383
51,380
(6,160)
(5,014)
340,871
319
18,627
19,706
24,332
1,690,086
(83,296)
4,716
134,566
(58,086)
1,687,986
(163,778)
(741)
5,014
(317,975)
1,210,506
(29,326)
(111,366)
(71,766)
2,616
(2,857)
—
(13,954)
(226,653)
370,000
(1,265,000)
(53,802)
4,323
50,973
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—
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90,331
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288,768
378,102
48,692
45,215
28,767
518,656
3,136
55,790
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234,201
744
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11,324
1,502,970
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(332,592)
200,944
(13,501)
937,126
(116,322)
(508)
2,345
(206,448)
616,193
(52,205)
(89,955)
—
481
(482)
1,906
(5,612)
(145,867)
75,000
(875,000)
(54,617)
1,739
35,844
(17)
(99,983)
(17)
(917,051)
(446,725)
(16,720)
752,213
288,768
43
Notes to Consolidated Financial Statements
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies
Statement of accounting policies
The Group Financial Statements have been prepared in accordance with International Financial Reporting Standards
("IFRS") issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union ("EU") that are
effective for financial year ending 31 December 2023, and with those parts of the Companies Act applicable to companies
reporting under IFRS. IFRS adopted by the EU differs in certain respects from IFRS issued by the IASB. Reference to IFRS
hereafter refers to IFRS adopted by the EU.
The Company Financial Statements are prepared under the historical cost convention, in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’) and the Companies Act 2014. The Company meets
the definition of a qualifying entity under Financial Reporting Standard (FRS) 100 issued by the Financial Reporting Council
(FRC). Accordingly, in the year ended 31 December 2023, the Company transitioned from reporting under International
Financial Reporting Standards adopted by the European Union (IFRS) to FRS 101 Reduced Disclosure Framework as
issued by the FRC. The transition was not considered to have had a material effect on the financial statements.
In preparing the Company Financial Statements, the Company applies the recognition, measurement and disclosure
requirements of IFRS as adopted by the EU, 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. The
Company has taken advantage of the following disclosure exemptions under FRS 101:
•
•
•
•
•
•
A cash flow statement and related notes;
Comparative period reconciliation for share capital;
Disclosures in respect of transactions with wholly owned subsidiaries;
Disclosures in respect of capital management;
The effects of new but not yet effective IFRS; 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.
In accordance with Section 304(2) 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 Companies Registration Office. The
Company’s loss for the financial year determined in accordance with IFRS is $9.0 million (2022: $2.6 million).
Basis of preparation
The Group and Company Financial Statements are presented in United States dollars ("U.S. dollars") and all values are
rounded to the nearest thousand ($‘000), except where otherwise indicated. They are prepared on the historical cost basis,
except for the measurement at fair value on date of grant of share based payments, pension plan assets, derivative financial
instruments and certain financial asset investments. Other than the amended standards adopted by the Group, accounting
policies are applied consistently with the prior year. Certain comparative financial information has been reclassified to reflect
current period classifications.
The principal accounting policies adopted in the Company Financial Statements are the same as those set out for the Group
financial statements except as noted below. The accounting policies for the Group and Company Financial Statements
have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.
44
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
New standards and interpretations
The following standards and interpretations became effective for the Group during the financial year but do not have a
material effect on the results or financial position of the Group:
•
•
•
•
•
IFRS 17 Insurance Contracts
Amendments to IAS 1 and IFRS Practice Statement 2, Disclosure of Accounting Policies
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates
Amendments to IAS 12 Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
Amendments to IAS 12 Income Taxes - International Tax Reform — Pillar Two Model Rules
The following standards and interpretations are not yet effective for the Group and are not expected to have a material effect
on the results or financial position of the Group:
•
•
•
•
Amendments to IAS 1- Classification of Liabilities as Current or Non-current and Non-current Liabilities with
Covenants (Effective date: 1 January 2024)
Amendments to IAS 7 and IFRS 7 - Supplier Finance arrangements (Effective date: 1 January 2024)
Amendments to IFRS 16 - Leases - Lease liability in a sale and leaseback (Effective date: 1 January 2024)
Amendments to IFRS 21 - Lack of Exchangeability (Effective date: 1 January 2025)
Critical accounting judgements and key sources of estimation uncertainty
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reported period.
We base our estimates and judgments on historical experience and on the other factors that we believe are reasonable
under current circumstances. Actual results may differ from these estimates if these assumptions prove to be incorrect or if
conditions develop other than as assumed for the purposes of such estimates. The following is a discussion of the
accounting policies used by us, which we believe are critical in that they require estimates and judgements by management.
The application of these critical accounting policies and estimates is discussed with the Audit Committee of the Board of
Directors.
Revenue recognition
Significant management judgments and estimates must be made and used in connection with the recognition of revenue in
any accounting period. Material differences in the amount of revenue in any given period may result if these judgments or
estimates prove to be incorrect or if management’s estimates change on the basis of development of the business or market
conditions. To date there have been no material differences arising from these judgments and estimates. We earn revenues
by providing a number of different services to our clients. These services, which are integral elements of the clinical
development process, include clinical trials management, contract staffing, consulting and laboratory services. The criteria
for revenue recognition is based on five steps: (1) identify the contract(s) with a customer; (2) identify the performance
obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance
obligations in the contract; and (5) recognise revenue when (or as) the entity satisfies the performance obligation.
Clinical trial services are a single performance obligation satisfied over time i.e. the full-service obligation in respect of a
clinical trial (including those services performed by investigators and other parties) is considered a single performance
obligation. Promises offered to the customer are not distinct within the context of the contract. We have concluded that
ICON is the contract principal in respect of both direct services and in the use of third parties (principally investigator
services) that support the clinical research project. The transaction price is determined by reference to the contract or
change order value (total service revenue and pass-through/ reimbursable expenses) adjusted to reflect a realisable
contract value. An assessment of the realisable contract value is judgmental in nature. The realisable value assessment is
updated at each reporting period, having regard to (i) contract terms and (ii) customer experience.
Revenue is recognised on a percentage completion basis as the single performance obligation is satisfied. The progress
towards completion for clinical service contracts is measured therefore based on an input measure being total project costs
(inclusive of third party costs) at each reporting period. Measurement of the progress towards completion involves judgment
and estimation.
45
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Revenue recognition (continued)
Assessment of completion requires an evaluation of labour and related time cost incurred at the reporting date and third
party costs incurred at the reporting date. The assessment of third party costs incurred (principally investigator costs)
requires a review of activity performed and recorded by the third party services providers. The timing of payments to third
parties in respect of cost incurred reflect invoicing by third parties. The timing difference between the activity performed and
receipt of invoices from third parties may result in significant accrued amounts at reporting periods.
The assessment of progress towards completion also requires an up to date evaluation of the forecast costs to complete in
respect of these projects. Given the long-term nature of the clinical trials, and the complex nature of those trials, the forecast
costs to complete (being internal direct costs and costs that will be incurred by third parties (principally investigators)) is
judgmental. Forecast time (and related costs) is determined by reference to (i) contract terms and (ii) past experience.
Forecast third party costs to complete are determined by project by reference to (i) contract terms and (ii) past experience.
The Company provides data services to customers based on agreed-upon specifications, including the timing of delivery,
which is typically either weekly, monthly, or quarterly. If a customer requests more than one type of data report or series of
data reports within a contract, each distinct type of data report is a separate performance obligation. The contracts provide
for the Company to be compensated for the value of each deliverable. The transaction price is determined using list prices,
discount agreements, if any, and negotiations with the customers, and generally includes any out-of-pocket expenses.
The Company enters into contracts with some of its larger data suppliers that involve non-monetary terms. The Company
issues purchase credits to be used toward the data supplier's purchase of the Company's services based on the fair value of
the data obtained. In exchange, the Company receives monetary discounts on the data received from the data suppliers.
The fair value of the revenue earned from the customer purchases is recognised as services are delivered as described
above. At the end of the contract year, any unused customer purchase credits may be forfeited or carried over to the next
contract year based on the terms of the data supplier contract. The calculation of the fair value of certain non-monetary
terms involves management judgement and estimation.
Intangible assets acquired in a business combination
Significant management judgments and estimates must be made and used in connection with the recognition of intangible
assets associated with a business combination. The cost of a business combination is measured as the aggregate of the fair
values at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued in exchange for
control. The assets, liabilities and contingent liabilities of businesses acquired are generally measured at their fair values at
the date of acquisition. When the initial accounting for a business combination is determined provisionally, any subsequent
adjustments to the provisional values allocated to the identifiable assets, liabilities and contingent liabilities are made within
twelve months of the acquisition date and presented as adjustments to goodwill in the reporting period in which the
adjustments are determined.
Measurement of intangible assets involves the use of estimates for determining the fair value at the acquisition date. The
determination of the fair values of assets and liabilities, as well as of the useful lives of the assets is based on
management’s judgment. The valuation of intangible assets required management to develop discounted cash flow models
which required the use of reasonable and supportable inputs such as customer attrition data, discount rates developed from
various weighted average cost of capital assumptions, growth rates, margin forecasting and assessment of useful lives (see
note 14 - Goodwill and intangible assets). Management utilised external valuation experts, where necessary, to ensure the
valuation process was sufficiently detailed and robust to develop reliable valuations.
Taxation
Given the global nature of our business and the multiple taxing jurisdictions in which the Group operates, the determination
of the Group’s provision for income taxes requires significant judgments and estimates, the ultimate tax outcome of which
may not be certain. Although we believe our estimates are reasonable, the final outcome of these matters may be different
than those reflected in our historical income tax provisions and accruals.
Taxable profit differs from net profit as reported in the Consolidated Statement of Profit and Loss because it excludes items
of income or expense that are taxable or deductible in other years and further excludes items that are not taxable or
deductible. The Group’s liability for income tax is calculated using rates that have been enacted or substantively enacted at
the reporting date. Income tax is recognised in the Consolidated Statement of Profit and Loss except to the extent that it
relates to items recognised directly in equity.
46 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Taxation (continued)
Deferred income tax is provided, using the liability method, on all differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes except those arising from non-
deductible goodwill or on initial recognition of an asset or liability which affects neither accounting nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
expected to be realised or the liability to be settled.
Recognition of deferred tax assets is based on management’s belief that it is more likely than not that the income tax benefit
associated with certain temporary differences, income tax operating loss, capital loss carryforwards, and income tax credits,
would be realised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of the deferred income
tax asset to be utilised. The Group accounts for the impact of GILTI (“global intangible low-taxed income”) in the period it
arises and therefore have not provided for deferred taxes in respect of this item. The Group recognises the effect of income
tax positions only if those positions will more likely than not be sustained. If the estimate of future taxable income or tax
strategies changes at any time in the future, the Group would record an adjustment to the deferred tax asset. Recording
such an adjustment could have a material effect on the Group's financial condition or results of operations.
Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in
relation to the Group’s Financial Statements.
Basis of consolidation
The Group’s Financial Statements consolidate the financial statements of ICON plc and its subsidiaries. Subsidiaries are
consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. Financial
statements of subsidiaries are prepared for the same reporting year as the Company and where necessary, adjustments are
made to the results of subsidiaries to bring their accounting policies into line with those used by the Group. The Group will
continue to prepare the individual statutory financial statements of subsidiary companies under GAAP applicable in their
country of incorporation but adjustments have been made to the results and financial position of such companies to bring
their accounting policies into line with those of the Group.
All intercompany balances and transactions, including unrealised profits arising from inter-group transactions, have been
eliminated in full. Unrealised losses are eliminated in the same manner as unrealised gains except to the extent that there is
evidence of impairment.
Foreign currency translation
The presentation and functional currency of the Company is US dollars ($). The presentation currency of the Group is US
dollars ($). The determination of the USD as the functional currency of the Company reflects consideration of the primary
and secondary indicators as set out in IAS 21. The directors considered in particular the currency in which funds from
financing activities are generated (debt and equity) and the currency in which receipts from operating activities are usually
retained. This assessment is consistent with the assessment that the functional currencies of the main subsidiary trading
entities are USD. The Company Financial Statements are presented in US dollars. Results and cash flows of non-dollar
denominated undertakings are translated into dollars at the actual exchange rates at the transaction dates or average
exchange rates for the year where this is a reasonable approximation.
The related statements of financial position are translated at the rates of exchange ruling at the reporting date. Goodwill and
fair value adjustments arising on acquisition of a foreign operation are regarded as assets and liabilities of the foreign
operation, are expressed in the functional currency of the foreign operation and are recorded at the exchange rate at the
date of the transaction, and subsequently retranslated at the applicable closing rates. Adjustments arising on translation of
the results of non-dollar undertakings at average rates, and on the restatement of the opening net assets at closing rates,
are recorded in the translation reserve within equity.
47 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Foreign currency translation (continued)
Transactions in currencies different to the functional currencies of operations are recorded at the rate of exchange ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the
functional currency at the rate of exchange at the reporting date. All translation differences, with the exception of translation
differences on long-term intercompany balances in the Consolidated Financial Statements where repayment is not foreseen,
are recorded in the Consolidated Statement of Profit and Loss. Translation differences on long-term intercompany balances,
in the Consolidated Financial Statements, where repayment is not foreseen are recorded within other comprehensive
income in the Statement of Comprehensive Income.
On disposal of a foreign operation, accumulated currency translation differences, together with any exchange differences on
foreign currency borrowings that provide a hedge of the net investment are recognised in the Consolidated Statement of
Profit and Loss as part of the overall gain or loss on disposal.
The principal exchange rates used for the translation of results, cash flows and statements of financial position into US
dollars were as follows:
Euro 1:$
Pound Sterling 1:$
Property, plant and equipment
Average
Year end
31 December
2023
31 December
2022
31 December
2023
31 December
2022
1.0795
1.2382
1.0512
1.2347
1.1039
1.2731
1.0705
1.2083
Items of property, plant and equipment are stated at cost less accumulated depreciation and any provisions for impairment
losses. Depreciation is calculated to write off the original cost of property, plant and equipment less its estimated residual
value over its expected useful life on a straight line basis. Residual values and useful lives of property, plant and equipment
are reviewed and adjusted if appropriate at each reporting date. At present it is estimated that all items of property, plant and
equipment have no residual value. The estimated useful lives applied in determining the charge to depreciation are as
follows:
Buildings
Computer equipment
Office furniture and fixtures
Laboratory equipment
Motor vehicles
Years
40
2-8
8
5
5
Leasehold improvements are amortised using the straight-line method over the estimated useful life of the asset or the lease
term, whichever is shorter.
On disposal of property, plant and equipment the cost and related accumulated depreciation and impairments are removed
from the financial statements and the net amount, less any proceeds, is taken to the Consolidated Statement of Profit and
Loss.
The carrying amounts of the Group’s property, plant and equipment are reviewed at each reporting date to determine
whether there is any indicator of impairment. Where such an indicator exists an impairment review is carried out. An
impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the Consolidated Statement of Profit and Loss.
Subsequent costs 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 replaced item
can be measured reliably. All other repair and maintenance costs are charged to the Consolidated Statement of Profit and
Loss during the financial period in which they are incurred.
48 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Right-of-use assets and lease liabilities
ICON determines if an arrangement is a lease at inception and recognises the rights and obligations on the Consolidated
Statements of Financial Position as right-of-use (ROU) assets with corresponding lease liabilities.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, plus lease payments made at
or before the commencement day and any initial direct costs, less any lease incentives received. They are subsequently
measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the lease
term.
The right-of-use assets are presented as a separate line in the Consolidated Statement of Financial Position. The Group
applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as
described in the ‘Property, Plant and Equipment’ policy.
Lease liabilities are recognised based on the present value of future minimum lease payments over the lease term at
commencement date or date of transition with the interest element of the finance lease charged to financing expense. As
most of ICON's leases do not provide an implicit rate, the discount rate used is based on the Group's incremental borrowing
rate derived from the rate of traded corporate bonds available at the commencement date adjusted for country risk, liquidity
and lease term.
Current lease liabilities are included in accrued and other liabilities in the Consolidated Statement of Financial Position and
non-current lease liabilities are presented as a separate line. The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying
amount to reflect the lease payments made.
Lease terms may also include options to extend or terminate. Such options are actively reviewed and adjustments to the
ROU asset and lease liability are made when it is reasonably certain the option will be exercised.
The Group accounts for lease and non-lease components separately with the exception of motor vehicle leases for which
lease and non-lease components are accounted as a single lease component. Lease components are reflected in the
Consolidated Statements of Financial Position and non-lease components expensed directly to the Consolidated
Statements of Profit and Loss.
The Group has elected to account for short-term leases using the practical expedient. Instead of recognising a right-of-use
asset and lease liability, the payments in relation to these are recognised as an expense in the Consolidated Statement of
Profit and Loss on a straight-line basis over the lease term.
In some cases, ICON enters into sublease agreements and becomes both a lessee and a lessor for the same underlying
asset. When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate
contracts. Subleases are accounted for in the same way as other leases. The sub-lease is classified as a finance or
operating lease by reference to the right-of-use asset arising from the head lease.
Business combinations
Business combinations are accounted for using the acquisition method when control is transferred to the Group. The
consideration transferred is measured at fair value, as are the identifiable assets acquired and liabilities assumed. Where a
business combination agreement provides for an adjustment to the cost of the acquisition which is contingent upon future
events, the amount of the estimated adjustment is recognised on the acquisition date at the acquisition date fair value of this
contingent consideration. The accounting treatment of any changes to this estimate in subsequent periods will depend on
the classification of the contingent consideration. If the contingent consideration is classified as equity it shall not be re-
measured and the settlement shall be accounted for within equity. If the contingent consideration is classified as a liability
any adjustments to the assessment of contingent consideration determined as at acquisition date will be accounted for
through the Consolidated Statement of Profit and Loss, as the liability is measured at fair value at each reporting date.
The assets, liabilities and contingent liabilities of businesses acquired are measured at their fair values at the date of
acquisition. In the case of a business combination which is completed in stages, the fair values of the identifiable assets,
liabilities and contingent liabilities are re-determined at the date of each transaction until control is obtained. When the initial
accounting for a business combination is determined provisionally, any subsequent adjustments to the provisional values
allocated to the identifiable assets, liabilities and contingent liabilities are made within twelve months of the acquisition date
and presented as adjustments to the original acquisition accounting. Acquisition costs are expensed as incurred.
49 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Goodwill
The Group measures goodwill at the acquisition date as the fair value of the consideration transferred plus the recognised
amount of any non controlling interests in the acquiree, if the business combination is achieved in stages, the fair value of
the pre-existing equity interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable
assets acquired and liabilities assumed. Goodwill on the acquisition of subsidiaries is included in ‘intangible assets –
goodwill and other’.
At the acquisition date, any goodwill acquired is allocated to the cash-generating units expected to benefit from the
combination's synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit to
which the goodwill relates. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the
basis of the relative values of the operation disposed of and the proportion of the cash-generating unit retained.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for
impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
impaired. Impairment losses in respect of goodwill are not reversed.
Intangible assets
Other intangible assets are stated at cost less accumulated amortisation and impairment losses. Useful lives of intangibles
are reviewed and adjusted if appropriate at each reporting date. Amortisation is charged to the Consolidated Statement of
Profit and Loss on a straight-line basis over the estimated useful lives of intangible assets, currently estimated as follows:
Computer software
Customer relationships
Order backlog
Tradenames
Technology asset
Non-compete arrangements
Patient database
Years
2-8
16-23
3
3
5
5
7
The Group assesses at the end of each reporting period whether there is objective evidence that an intangible asset is
impaired. An intangible asset is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that occur after the initial recognition of the intangible asset (a 'loss event') and
that loss event (or events) has an impact on the estimated future cash flows of the intangible asset that can be reliably
estimated.
Impairment losses in respect of intangible assets are reversed if there has been a change in the estimates used to
determine recoverable amount. Impairment losses are reversed only to the extent that the carrying amount of the intangible
asset does not exceed the carrying value that would have been determined, net of amortisation, if no impairment loss had
been recognised.
Inventories
Inventories, which comprise laboratory inventories, are stated at the lower of cost and net realisable value. Cost is based on
the first-in, first-out principle and includes all expenditure incurred in acquiring the inventories and bringing them to their
present location and condition. Cost in the case of raw materials comprises the purchase price and attributable costs, less
trade discounts. Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses.
Accounts payable
Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting
period. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
rate method.
50
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Government grants
Government grants received that compensate the Group for the cost of an asset are recognised in the Consolidated
Statement of Financial Position initially as deferred income when there is reasonable assurance that it will be received and
that the Group will comply with the conditions attaching to it. Such grants are recognised in the Consolidated Statement of
Profit and Loss over the useful economic life of the asset which is consistent with the depreciation policy of the relevant
asset.
Grants that compensate the Group for expenses incurred are recognised in the Consolidated Statement of Profit and Loss
in the same periods in which the expenditure to which they relate is charged.
Under grant agreements, amounts received may become repayable in full or in part should certain circumstances specified
within the grant agreements occur, including downsizing by the Group, disposing of the related assets, ceasing to carry on
its business or the appointment of a receiver over any of its assets. The Group has not recognised any such loss
contingency having assessed as remote the likelihood of these events arising.
Provisions
A provision is recognised in the Consolidated Statement of Financial Position when the Group has a present or legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to
settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects the time value of money and, where appropriate, the risks specific
to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance
cost.
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the
restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.
Financial Instruments
Financial assets and financial liabilities are recognised on the Consolidated Balance Sheet when the Group becomes party
to the contractual provisions of the instrument.
Financial assets are recognised and derecognised on a trade date basis, being the date the Group commits to purchase or
sell the asset under a contract.
Financial assets and liabilities are offset and presented on a net basis in the Consolidated Balance Sheet, only if the Group
holds an enforceable legal right of set off for such amounts and there is an intention to settle on a net basis or to realise an
asset and settle the liability simultaneously. In all other instances they are presented gross in the Consolidated Balance
Sheet.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. The classification
depends on the entity's business model for managing financial assets and the contractual terms of the cash flows. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its financial
instruments:
•
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign
exchange gains and losses.
51 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Financial Instruments (continued)
•
•
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment losses. When the financial asset
is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss
and recognised in other gains/(losses). Interest income from these financial assets is included in finance income
using the effective interest rate method.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a
debt investment that is subsequently measured at FVPL is recognised in profit or loss.
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit
risk.
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
(a)
Cash and cash equivalents
Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less and
are stated at fair value on initial recognition followed by amortised cost, which approximates fair value.
(b)
Trade receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business. Trade
receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant
financing components. The amount of consideration that is unconditional approximates to fair value. The Group holds the
trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at
amortised cost using the effective interest method.
Where the Group enters into arrangements to sell certain trade receivables, such arrangements are accounted for in
accordance with IFRS 9, Financial Instruments (“IFRS 9”). The underlying trade receivables are derecognised to the extent
that substantially all of the risks and rewards of ownership of the trade receivables are transferred, under the terms of the
arrangements. Cash proceeds received from such sales are included in operating cash flows.
(c)
Interest bearing loans and borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Subsequent to initial recognition, current and non-current interest bearing loans and borrowings are
measured at amortised cost with any difference between cost and redemption value being recognised in the Consolidated
Statement of Profit and Loss over the period of the borrowings on an effective interest rate basis. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred until draw down will occur. Where there is no evidence
that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised
over the period of the facility to which it relates.
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.
Borrowings are removed from the Consolidated Statement of Financial Position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss as other income or finance costs.
(d)
Equity instruments
The Group entered into subscription agreements with a number of funds. The Group subsequently measures all equity
investments, including fund subscriptions, at FVPL. Changes in the fair value of equity investments and fund subscriptions
measured at FVPL are recognised in the Consolidated Statement of Profit and Loss. Dividends or interest from such
investments continue to be recognised in the Consolidated Statement of Profit and Loss when the Group’s right to receive
payments is established.
52 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Financial instruments (continued)
(e)
Current financial assets
The Group classifies short term investments as current financial assets. Short-term investments comprise highly liquid
investments with maturities of greater than three months. Current financial assets are subsequently measured at fair value
through OCI.
(f)
Impairment of financial assets
The Group's financial assets measured at amortised cost, the most significant of which are trade receivables and unbilled
receivables, are subject to IFRS 9's expected credit loss model.
For trade receivables and unbilled revenue, the Group applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. See notes 17 and 26 for further details.
The expected credit losses on these financial assets are estimated based on the Group’s historical credit loss experience,
adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current, as
well as the forecast direction of conditions, at the reporting date.
The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and
there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group’s
recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or
loss.
(g)
Derivative financial instruments and hedging
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value
depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Group designates certain derivatives as either:
•
•
•
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges)
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable
forecast transactions (cash flow hedges), or
hedges of a net investment in a foreign operation (net investment hedges).
At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and
hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the
cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge
transactions.
The fair value of derivative financial instruments designated in hedge relationships are disclosed in note 26 – Financial
instruments. Movements in the hedging reserve are shown in shareholders' equity. The full fair value of a hedging derivative
is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months. It is
classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss, within other gains/(losses).
53 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Financial Instruments (continued)
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until
the forecast transaction occurs.
Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately
in profit or loss.
During the year ended 31 December 2022, the Group entered into two interest rate cap agreements ("2022 Caps") and an
interest rate swap agreement ("2022 Swap") to limit its exposure to changes in the variable interest rate on its Senior
Secured Credit Facilities. The interest rate caps and swap are accounted for as cash flow hedges and were considered
effective hedges on application of the provisions of IFRS 9. The effective portion of the hedges is recorded as a movement
within Other Reserves for the years ended 31 December 2023 and 31 December 2022.
Fair value hierarchy
The Group reports using the fair value hierarchy in relation to its assets and liabilities which are measured at fair value
expect for those which are exempt as defined under IFRS 13, Fair Value Measurement. The fair value hierarchy categorises
the inputs to valuation techniques to measure fair value into three levels:
•
•
•
Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical
or similar instruments in markets that are not active and model-based valuation techniques for which all significant
assumptions are observable in the market or can be corroborated by observable market data for substantially the
full term of the assets or liabilities.
Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that
market participants would use in pricing the asset or liability.
Investments in subsidiaries - Company
Investments in subsidiary undertakings are stated at cost less any accumulated impairment and are reviewed for impairment
if there are indicators that the carrying value may not be recoverable.
Intercompany loans receivable and payable are initially recognised at fair value. These are subsequently measured at
amortised cost, less any loss allowance, calculated on an expected credit loss basis.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Where ordinary shares are re-purchased by the Company they are cancelled and the nominal value of the shares is
transferred to other undenominated capital within equity.
Equity Method Investments
The Company’s investments that are not consolidated are accounted for under the equity method if the Company exercises
significant influence that is considered to be greater than minor. The Company records its pro rata share of the earnings/
losses of these investments in Share of equity method investments in the Consolidated Statements of Profit and Loss. The
Company reviews these for impairment whenever events or changes in circumstances indicate that the carrying amounts
may not be recoverable.
54 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Employee benefits
(a) Pension and other post-employment benefits
Certain companies within the Group operate defined contribution pension plans. A defined contribution plan is a pension
plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive
obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to
employee service in the current and prior periods. Contributions to defined contribution pension plans are expensed as
incurred.
The Group operates defined benefit pension plans for certain of its United Kingdom and Swiss employees through
subsidiary companies. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined
benefit plans define the amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation. Obligations for contributions to defined benefit pension plans
are recognised as an expense in the Consolidated Statement of Profit and Loss as service is received from the relevant
employees.
The Group’s net obligation in respect of the defined benefit pension plans is calculated separately by estimating the amount
of future benefit that employees have earned in return for their service in the current and prior periods. This benefit is
discounted to determine its present value, and the fair value of plan assets deducted. The discount rate used in respect of
the UK scheme is determined by the UK corporate bond yields at the reporting date. The discount rate used in respect of
the Swiss schemes is determined by the Swiss corporate bond yields at the reporting date. The calculation is performed by
a qualified actuary using the projected unit credit method. The net finance income/cost are recorded in operating costs in the
Consolidated Statement of Profit and Loss. When benefits of a plan are improved, the portion of the increased benefit
relating to the past service by employees is recognised as an expense in the Consolidated Statement of Profit and Loss on
a straight line basis over the average period until the benefits become vested. To the extent that the benefits vest
immediately, the expense is recognised immediately in the Consolidated Statement of Profit and Loss.
(b) Share-based payments
Share-based payments comprise options to acquire ordinary shares in the Company, Restricted Share Units ('RSUs') and
and Performance Share Units ('PSUs') in the form of ordinary share entitlements after a certain period of time. These are
awarded to certain key employees and Directors of the Group based on service conditions such as term of employment and
individual performance. The fair value of options, RSUs and PSUs granted is recognised as an employee expense with a
corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the
Directors and other employees become unconditionally entitled to the options, RSUs or PSUs. The fair value of options
granted is measured using a model taking into account the terms and conditions upon which the options were granted. The
fair value of RSUs and PSUs is equal to the market price of a share at date of grant. The total amount to be expensed is
determined by reference to the fair value of the options, RSUs or PSUs granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options, RSUs or PSUs that vest.
Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from
original estimates.
Share-based payment expense is recognised over the requisite service period for awards of equity instruments to
employees based on the grant date fair value of those awards expected to ultimately vest.
Replacement awards
In connection with the completion of the Merger, the Company issued replacement awards to the holders of PRA equity
awards on 1 July 2021. An exchange of share-based compensation awards in a business combination is treated as a
modification under IFRS 2. The replacement awards and the original acquiree awards are measured at fair value at the
acquisition date and calculated using the fair-value-based measurement principles in IFRS 2. Amounts attributable to pre-
combination vesting are accounted for as part of the consideration transferred for the acquiree. Amounts attributable to post-
combination vesting are accounted for separate from the business combination and are recognised as compensation cost in
the post-combination period.
(c) Share-based payments – Company
The Company operates a number of share-based payment plans the details of which are presented in note 12 Share-based
Payments to the Consolidated Financial Statements. The share-based payment expense associated with the share-based
payment plans is recognised by the entity which receives services in exchange for the share-based compensation.
55 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Employee benefits (continued)
The Statement of Profit and Loss of the Company is charged with the expense related to the services received by the
Company. The remaining portions of the share-based payments represent a contribution to Company’s subsidiaries and are
added to the carrying amount of those investments. Under an agreement, with certain subsidiaries, on the date of exercise
the Company is paid an amount equal to the fair value of the ordinary shares issued that is in excess of the award exercise
price with such amount reducing the Company’s investment in its subsidiaries. The net effect of the grant date fair value of
the Company’s share-based compensation to employees of the Company’s subsidiaries and recharges received from those
subsidiaries is presented as a movement in financial fixed assets (see note 2 Investment in subsidiaries, to the Company
only financial statements).
Revenue Recognition
The Company primarily earns revenues by providing a number of different services to its customers. These services, which
are integral elements of the clinical development process, include clinical trials management, consulting, contract staffing,
data services and laboratory services. These services, which are described below, can be purchased collectively or
individually as part of a clinical trial contract. There is not significant variability in how economic factors affect these services.
Contracts range in duration from a number of months to several years.
Revenue Recognition - Clinical trial service revenue
Under IFRS 15 Revenue from Contracts with Customers ('IFRS 15'), a clinical trial service is a single performance obligation
satisfied over time i.e. the full service obligation in respect of a clinical trial (including those services performed by
investigators and other parties) is considered a single performance obligation. Promises offered to the customer are not
distinct within the context of the contract. ICON is the contract principal in respect of both direct services and in the use of
third parties (principally investigator services) that support the clinical research project. The transaction price is determined
by reference to the contract or change order value (total service revenue and pass-through/reimbursable expenses)
adjusted downwards to reflect a realisable contract value. Revenue is recognised as the single performance obligation is
satisfied. The progress towards completion for clinical service contracts is measured based on an input measure being
project costs incurred as a proportion of total project costs (inclusive of third-party costs) at each reporting period.
Revenue Recognition - Contracting services revenue
The Company has availed of the practical expedient which results in recognition of revenue on a right to invoice basis.
Application of the practical expedient reflects the right to consideration from the customer in an amount that corresponds
directly with the value to the customer of the performance completion to date. This reflects hours performed by contract
staff.
Revenue Recognition - Consulting services revenue
Consulting services contracts represent a single performance obligation satisfied over time. The transaction price is
determined by reference to contract or change order value. Revenue is recognised as the performance obligation is
satisfied. The progress towards completion for consulting contracts is measured based on total project inputs (time) at each
reporting period as a percentage of forecasted total project inputs.
Revenue Recognition - Laboratory services revenue
Revenue is recognised when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the
products or services are transferred to the customer. Revenue for laboratory services is measured as the amount of
consideration we expect to receive in exchange for transferring products or services. Where contracts with customers
contain multiple performance obligations, the transaction price is allocated to each performance obligation based on the
estimated relative selling price of the promised good or service. Service revenue is recognised over time as the services are
delivered to the customer based on the extent of progress towards completion of the performance obligation. The
determination of the methodology to measure progress requires judgement and is based on the nature of services provided.
This requires an assessment of the transfer of value to the customer. The right to invoice measure of progress is generally
related to rate per unit contracts, as the extent of progress towards completion is measured based on discrete service or
time-based increments, such as samples tested or labour hours incurred. Revenue is recorded in the amount invoiced since
those amounts corresponds to the value of the Company's performance and the transfer of value to the customer.
56
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Revenue Recognition (continued)
Revenue Recognition - Data services revenue
The Company provides data reports and analytics to customers based on agreed-upon specifications, including the timing of
delivery, which is typically either weekly, monthly, or quarterly. If a customer requests more than one type of data report or
series of data reports within a contract, each distinct type of data report is a separate performance obligation. The contracts
provide for the Company to be compensated for the value of each deliverable. The transaction price is determined using list
prices, discount agreements, if any, and negotiations with the customers, and generally includes any out-of-pocket
expenses. Typically, the Company bills in advance of services being provided with the amount being recorded as unearned
revenue.
When multiple performance obligations exist, the transaction price is allocated to performance obligations on a relative
standalone selling price basis. In cases where the Company contracts to provide a series of data reports, or in some cases
data, the Company recognises revenue over time using the “units delivered” output method as the data or reports are
delivered. Expense reimbursements are recorded to revenue as the expenses are incurred as they relate directly to the
services performed.
Certain arrangements include upfront customisation or consultative services for customers. These arrangements often
include payments based on the achievement of certain contractual milestones. Under these arrangements, the Company
contracts with a customer to carry out a specific study, ultimately resulting in delivery of a custom report or data product.
These arrangements are a single performance obligation given the integrated nature of the service being provided. The
Company typically recognises revenue under these contracts over time, using an output-based measure, generally time
elapsed, to measure progress and transfer of control of the performance obligation to the customer. Expense
reimbursements are recorded to revenue as the expenses are incurred as they relate directly to the service performed.
The Company enters into contracts with some of its larger data suppliers that involve non-monetary terms. The Company
issues purchase credits to be used toward the data supplier's purchase of the Company's services based on the fair value of
the data obtained. In exchange, the Company receives monetary discounts on the data received from the data suppliers.
The fair value of the revenue earned from the customer purchases is recognised as services are delivered as described
above. At the end of the contract year, any unused customer purchase credits may be forfeited or carried over to the next
contract year based on the terms of the data supplier contract.
Commissions
Incremental costs of obtaining a contract are recognised as an asset on the Consolidated Statement of Financial Position in
respect of those contracts that exceed one year. Where commission costs relate to contracts that are less than one year, the
practical expedient is applied as the amortisation period of the asset which would arise on deferral would be one year or
less.
Reimbursable expenses
Reimbursable expenses comprise investigator payments and certain other costs which are reimbursed by clients under
terms specific to each contract to the investigators. The Company includes reimbursed expenses in revenue and direct
costs as the Company is primarily responsible for fulfilling the promise to provide the specified service, including integration
of the related services into a combined output to the customer.
Direct costs
Direct costs consist of compensation, associated employee benefits and share-based payments for project-related
employees and other direct project-related costs.
Reimbursable expenses are presented within direct costs. This presentation is to align the presentation of costs with our
assessment that our clinical trial service is a single performance obligation satisfied over time. Reimbursable expenses are
recorded once the activity which forms the basis for the cost has occurred. Payments are made based on predetermined
contractual arrangements. Timing of payments may differ from the timing of the expense.
Other operating expenses
Other operating expenses consist of compensation, associated employee benefits and share-based payments for non-
project-related employees and other indirect costs associated with the business. Other operating expenses also include
depreciation expense and the amortisation of intangible assets.
57 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Exceptional items
The Company has used the term “exceptional” to describe certain items which, in management’s view, warrant separate
disclosure by virtue of their size or incidence, or due to the fact that certain gains or losses are determined to be non-
recurring in nature. Exceptional items may include restructuring, transaction and integration-related expenses, significant
impairments, and material changes in estimates. Also see the replacement awards accounting policy described above.
Transaction and integration-related expenses
Transaction and integration-related expenses are the incremental costs directly attributable to completion and integration
activities associated with the Group’s recent acquisitions. The costs consist of investment banking fees, advisory costs,
professional fees, retention agreements with employees, accelerated share-based compensation charges and ongoing
integration activities. The Group accounts for these transaction and integration-related costs as expenses in the period in
which the costs are incurred and the services are received.
Restructuring
Restructuring charges reflect certain one-time and associated unavoidable costs arising from reorganisation programmes
announced by Group management. These programmes generally result in asset impairments and workforce reductions in
order to optimise the Group’s structure and facilitate improved long-term performance. Impairment charges are taken when
the value-in-use of the asset is less than the asset’s carrying value. Workforce related charges are taken when an approved
reorganisation programme is communicated to the relevant employee groups.
Research and development credits
Research and development credits are available to the Group under the tax laws in certain jurisdictions, based on qualifying
research and development spend as defined under those tax laws. Research and development credits may be recognised
as a reduction of income tax expense. However, certain tax jurisdictions provide refundable credits that are not wholly
dependent on the Group's ongoing income tax status or income tax position. In these circumstances the benefit of these
credits is not recorded as a reduction to income tax expense, but rather as a reduction of operating expenditure.
Financing income
Interest income is recognised in the Consolidated Statement of Profit and Loss as it accrues using the effective interest rate
method and includes interest receivable on investments.
Financing expense
Financing expense comprises interest payable on borrowings calculated using the effective interest rate method, finance
charges on leases, foreign exchange gains and losses on bank loans and gains and losses on hedging instruments that are
recognised in the Consolidated Statement of Profit and Loss.
Financing expense also includes fees paid on the establishment of loan facilities which are recognised as transaction costs
of the loan to the extent that it is probable that some or all of the facility will be drawn down. These fees are deferred and
recognised in the Statement of Financial Position and are then amortised to the Consolidated Statement of Profit and Loss
over the term the facility is available to the Group.
Income tax
Income tax expense in the Consolidated Statement of Profit and Loss represents the sum of income tax currently payable
and deferred income tax.
Income tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
Consolidated Statement of Profit and Loss because it excludes items of income or expense that are taxable or deductible in
other years and further excludes items that are not taxable or deductible. The Group’s liability for income tax is calculated
using rates that have been enacted or substantively enacted at the reporting date. Income tax is recognised in the
Consolidated Statement of Profit and Loss except to the extent that it relates to items recognised directly in equity.
Deferred income tax is provided, using the liability method, on all differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes except those arising from non-
deductible goodwill or on initial recognition of an asset or liability which affects neither accounting nor taxable profit.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is expected to be realised or the liability to be settled.
58
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
1. Basis of preparation and statement of accounting policies (continued)
Income tax (continued)
Deferred tax assets are recognised for all deductible differences, carry forward of unused tax credits and unused tax losses,
to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and
the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax
assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit
would be available to allow all or part of the deferred income tax asset to be utilised.
The Group has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is
an income tax in scope of IAS 12. The Group has applied a temporary mandatory relief from deferred tax accounting for the
impacts of the top-up tax and accounts for it as current tax when it is incurred.
Earnings per ordinary share
Basic earnings per share is computed by dividing the profit for the financial year attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the financial period.
Diluted net income per ordinary share is computed by adjusting the weighted average number of ordinary shares
outstanding during the period for all potentially dilutive ordinary shares outstanding during the period and adjusting net
income for any changes in income or loss that would result from the conversion of such potential ordinary shares. There is
no difference in net income used for basic and diluted net income per ordinary share.
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The
Group determines and presents operating segments based on the information that internally is provided to the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO) who together are considered the Group’s chief operating decision
makers, the ‘CODM’. An operating segment’s operating results are reviewed regularly by the CODM to make decisions
about resources to be allocated to the segment and assess its performance, and for which discrete financial information is
available.
Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property,
plant and equipment and right-of-use assets.
Debt issuance costs
Debt issuance costs relating to the Group’s long-term debt are recorded as a direct reduction of long-term debt; these costs
are deferred and amortised to interest expense using the effective interest method, over the respective terms of the related
debt. Debt issuance costs relating to the Group’s revolving credit facilities are recorded as an asset; these costs are
deferred and amortised to interest expense using the straight-line method. Early repayment of debt facilities can result in
modification of the debt and the acceleration of the amortisation of debt issuance costs.
59 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
2. Segmental information
The Company has the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis
and has the operational flexibility to provide development services on a stand-alone basis or as part of an integrated "full-
service" solution. The Company has expanded through internal growth, together with a number of strategic acquisitions to
enhance its expertise and capabilities in certain areas of the clinical development process.
The Company determines and presents operating segments based on the information that is internally provided to the chief
operating decision maker, together the ('CODM') in accordance with IFRS 8 Operating Segments. The Company determined
that the CODM was comprised of the Chief Executive Officer and the Chief Financial Officer.
The Company operates as one reportable segment, which is the provision of outsourced development services on a global
basis to the pharmaceutical, biotechnology and medical devices industries.
The Group’s listing for its shares is the NASDAQ market in the United States. Consequently, information reviewed by the
chief operating decision makers is prepared in accordance with US generally accepted accounting principles (“US GAAP”)
however, the information presented below is prepared in accordance with IFRS reporting standards. Reconciliations of the
Group’s profit for the financial year and shareholders’ equity from US GAAP to IFRS are set out on pages 145 to 148 of this
report.
Revenues are allocated to individual entities based on where the work is performed in accordance with the Company's
global transfer pricing model. Revenues and income from operations in Ireland are a function of our global contracting
model and the Group’s transfer pricing model.
ICON Ireland acts as the Group entrepreneur under the Company’s global transfer pricing model given its role in the
development and management of the Group, its ownership of key intellectual property and customer relationships, its key
role in the mitigation of risks faced by the Group and its responsibility for maintaining the Company’s global network. ICON
Ireland enters into the majority of the Company’s customer contracts.
ICON Ireland remunerates other operating entities in the Group on the basis of an arm’s length return for the services they
perform in each of their local territories. The arm’s length return for each ICON entity is established to ensure that each of
ICON Ireland and the ICON entities that are involved in the conduct of services for customers, earn an appropriate return
having regard to the assets owned, risks borne, and functions performed by each entity from these intercompany
transactions. The arm’s length return is reviewed annually to ensure that it is market appropriate. The integration of entities
acquired through the Merger into this global network and global transfer pricing model has been completed.
The geographic split of revenue disclosed for each region outside Ireland is the arm’s length revenue attributable to these
entities. The residual revenues of the Group, once each ICON entity has been paid its respective intercompany service fee,
generally fall to be retained by ICON Ireland. As such, revenues and income from operations in Ireland are a function of this
global transfer pricing model and comprise revenues of the Group after deducting the arm’s length revenues attributable to
the activities performed outside Ireland.
There have been no changes to the overall basis of segmentation or the measurement basis for the segment results since
the prior year.
Geographical segment information
Revenue
Ireland
Rest of Europe
United States
Rest of World
Total
31 December
2023
31 December
2022
$’000
$’000
2,377,104
1,984,567
1,574,783
1,618,350
3,283,790
3,566,610
884,499
563,859
8,120,176
7,733,386
60
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
2. Segmental information (continued)
Property, plant and equipment and right-of-use assets
Ireland
Europe
United States
Rest of World
Total
3. Revenue
Revenue disaggregated by customer profile is as follows:
Top client
Clients 2-5
Clients 6-10
Clients 11-25
Other
Total revenue
31 December
2023
31 December
2022
$’000
$’000
50,851
91,080
51,654
98,641
110,575
132,615
46,728
46,516
299,234
329,426
31 December
2023
31 December
2022
$’000
$’000
721,309
682,840
1,453,508
1,504,530
1,188,943
1,111,486
1,743,539
1,584,100
3,012,877
2,850,430
8,120,176
7,733,386
Our customers have similar profiles and economic characteristics, and therefore have similar degrees of risk and growth
opportunities.
4. Financing income
Interest receivable
Total finance income
All of the above relate to items not at fair value through profit and loss.
5. Financing expense
Interest payable on borrowings
Interest on lease liabilities
Facility fees (including amortisation)
Other financing costs*
Total finance expense
31 December
2023
31 December
2022
$’000
5,014
5,014
$’000
2,345
2,345
31 December
2023
31 December
2022
$’000
311,019
4,172
16,402
9,278
$’000
209,189
4,470
17,749
2,793
340,871
234,201
*includes costs associated with the senior secured revolving loan facility.
The Company incurred interest costs from various financing arrangements during the years ended 31 December 2023 and
31 December 2022 as set out in the table above. These costs have been charged in the financing expense line of the
Consolidated Statement of Profit and Loss. All of the above relate to items not at fair value through profit and loss.
61
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
6. Profit before taxation
Profit before taxation is stated after charging the following:
Auditor's remuneration
Audit fees (1)
Other assurance fees: audit related fees (2)
Other Non-audit fees: Tax compliance and the
preparation of tax returns and refund claims
31 December 2023
31 December 2022
Statutory
auditor
Affiliated
firms
Total Statutory
auditor
Affiliated
firms
$’000
$’000
$’000
$’000
$’000
3,405
59
3,464
317
495
137
436
454
931
4,361
178
214
59
116
106
Total
$’000
4,420
294
320
Total audit, audit related and tax compliance fees
4,217
632
4,849
4,753
281
5,034
Other tax planning and consulting services (3)
Tax advice relating to integration of ICON and PRA (4)
Total non-audit service fee / tax advisory fees
249
897
1,146
—
—
—
249
897
749
3,720
1,146
4,469
430
—
430
1,179
3,720
4,899
Total fees
5,363
(1) Audit fees include annual audit and quarterly review fees for ICON Plc.
(2) Audit related fees principally consist of fees for assurance and related services, such as financial due diligence services, fees for the
5,995
9,222
9,933
632
711
audit of employee benefit plans, fees for pension reviews and audit fees of the Company's subsidiaries.
(3) Other tax planning and consulting services represents services across a number of areas including in relation to the Group's financing
facilities and other ad hoc tax advisory and planning.
(4) Tax advice relating to the integration of ICON and PRA are fees directly related to the Merger and subsequent integration of PRA and
are not expected to recur in future periods. These fees directly related to tax advice on the steps required to integrate and eliminate
legal entities of PRA and ICON following the merger. The fees also included detailed transfer pricing advice on business model
integration.
Depreciation and amortisation
Depreciation of property, plant and equipment (note 13)
Depreciation of right-of-use assets (note 27)
Amortisation of intangible assets (note 14)
Total depreciation and amortisation
Directors’ remuneration
Emoluments
Benefits under long-term incentive schemes
Gain on exercise of share options
Pension contributions (defined contribution)
31 December
2023
31 December
2022
$’000
48,158
41,982
537,792
627,932
$’000
48,692
45,215
518,656
612,563
31 December
2023
31 December
2022
$’000
3,532
5,304
13,009
125
$’000
3,730
7,130
3,771
125
Directors' remuneration disclosures as required by Section 305 of the Companies Act are set out above. Retirement benefits
accrue to one Director (2022: one Director) under a defined contribution scheme. Further details regarding Directors’
shareholdings, share options and compensation are shown in note 10 – Payroll and related benefits. Included in the benefits
under long-term incentive scheme are amounts relating to share entitlements, the calculation of which was based on the
share-based payment charge calculated under IFRS 2 Share-Based Payments.
62
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
7. Income tax expense
The components of the current and deferred tax expense for the years ended 31 December 2023 and 2022 were as follows:
Current tax expense
Current year
-
Ireland
- Other
Deferred tax credit
31 December
2023
31 December
2022
$’000
$’000
80,427
16,112
96,539
55,073
132,612
187,685
Origination and reversal of temporary differences
(67,209)
(119,671)
Over provided in prior years
Current tax
Deferred tax
Over provided in prior years
Total income tax expense in profit and loss
Tax recognised directly in equity
Deferred tax recognised directly in equity
Current tax recognised directly in equity
Total tax recognised in equity
Income tax recognised in other comprehensive income
Fair value of cash flow hedge
Tax on currency impact on long-term funding
Tax impact of pension contributions
Total income tax recognised in other comprehensive income
4,936
(15,639)
(10,703)
18,627
(13,045)
(4,323)
(17,368)
301
(3,903)
—
(3,602)
(3,602)
1,102
(2,500)
65,514
25,780
(1,739)
24,041
—
7,211
754
7,965
The total tax expense of $18.6 million and $65.5 million for the years ended 31 December 2023 and 31 December 2022
respectively, reflects tax at standard rates on taxable profits in the jurisdictions in which the Group operates, foreign
withholding tax and the availability of tax losses.
The deferred tax credit of $67.2 million for the year ended 31 December 2023 and the deferred tax credit of $119.7 million
for the year ended 31 December 2022, relates to deferred tax arising in respect of net operating losses and temporary
differences in property, plant and equipment, the timing of certain goodwill amortisation on US acquisitions and the timing of
tax deductions available relating to the Group’s share-based compensation schemes.
63
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
7. Income tax expense (continued)
A reconciliation of the expected tax expense, computed by applying the standard Irish tax rate to income before tax to the
actual tax expense, is as follows:
Profit before tax
Irish standard tax rate
31 December
2023
31 December
2022
$’000
$’000
627,651
571,799
12.5 %
12.5 %
Taxes at Irish standard tax rate
78,456
71,475
Over provision in respect to prior years
Foreign and other income taxed at higher rates
Rate differential from amortisation of intangible assets
Effect of change in tax rates
(Decrease)/ increase in unrecognised tax benefits
Losses for which no benefit has been recognised
Research and development tax incentives
Impact of stock compensation
Investor tax expense on foreign subsidiaries earnings
Share of loss of associate already tax effected
Other
Tax expense on profit for the year
The net deferred tax asset at 31 December 2023 and 31 December 2022 was as follows:
Deferred taxation assets
Net operating losses carried forward
Accrued and other liabilities
Property, plant and equipment
Deferred revenue
Share-based payment
Other
Total deferred taxation assets
Less: offset against deferred tax liabilities
Deferred tax asset disclosed on Consolidated Statement of Financial Position
(10,703)
46,481
(71,223)
3,154
(54,347)
(1,068)
(3,868)
(5,035)
39,165
—
(2,385)
18,627
(2,500)
52,463
(59,330)
(300)
8,392
(777)
(2,608)
520
—
392
(2,213)
65,514
31 December
2023
31 December
2022
$’000
$’000
81,362
84,748
9,082
23,748
49,180
15,783
45,498
66,753
6,010
66,566
43,048
17,748
263,903
245,623
(158,674)
(147,506)
105,229
98,117
64
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
7. Income tax expense (continued)
Deferred taxation liabilities
Property, plant and equipment
Goodwill and related assets
Other intangible assets
Investments in foreign subsidiaries
Other
Total deferred taxation liabilities
Less: offset against deferred tax assets
Deferred tax liability disclosed on Consolidated Statement of Financial Position
Net deferred taxation liability
31 December
2023
31 December
2022
$’000
$’000
7,547
39,014
10,927
37,150
950,055
1,078,302
52,408
7,985
1,587
7,467
1,057,009
1,135,433
(158,674)
(147,506)
898,335
987,927
(793,106)
(889,810)
The movement in temporary differences during the year ended 31 December 2023 was as follows:
Deferred taxation assets
Net operating loss carry forwards
Accrued and other liabilities
Property, plant and equipment
Share-based payment
Deferred revenue
Other
Total deferred taxation assets
Deferred taxation liabilities
Property, plant and equipment
Goodwill and related assets
Investments in Foreign subsidiaries
Other
Other intangible assets
Total deferred taxation liabilities
Net deferred taxation liability
1 January
2023
Recognised
in Income
Recognised
in Other
Comprehen
sive Income
Recognised
in Equity
31
December
2023
$’000
$’000
$’000
$’000
$’000
45,498
35,864
66,753
17,995
6,010
3,072
43,048
(6,563)
66,566
(42,818)
—
—
—
—
—
17,748
245,623
(1,958)
5,592
(357)
(357)
—
—
—
13,045
—
—
81,362
84,748
9,082
49,530
23,748
15,433
13,045
263,903
10,927
37,150
(3,380)
1,864
1,587
50,821
7,467
1,686
1,078,302
(128,247)
1,135,433
(77,256)
—
—
—
—
—
—
—
—
—
(1,168) *
7,547
39,014
52,408
7,985
—
950,055
(1,168)
1,057,009
(889,810)
82,848
(357)
14,213
(793,106)
* These adjustments relate to foreign currency translation on the deferred tax liabilities.
65
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
7. Income tax expense (continued)
The movement in temporary differences during the year ended 31 December 2022 was as follows:
Deferred taxation assets
Net operating loss carry forwards
Accrued and other liabilities
Property, plant and equipment
Share-based payment
Deferred Revenue
Other
1 January
2022
Recognised
in Income
Recognised
in Equity
31 December
2022
$’000
$’000
$’000
$’000
43,451
71,934
5,619
2,047
(5,181)
391
—
—
—
81,903
(13,075)
(25,780)
62,871
3,695
4,330
13,418
—
—
45,498
66,753
6,010
43,048
66,566
17,748
Total deferred taxation assets
270,108
1,295
(25,780)
245,623
Deferred taxation liabilities
Property, plant and equipment
Goodwill on acquisition
Investments in Foreign subsidiaries
Other
Other intangible assets
Total deferred taxation liabilities
Net deferred taxation liability
19,606
33,354
10
1,751
(8,679)
3,796
1,577
1,627
—
—
—
4,089 *
10,927
37,150
1,587
7,467
1,193,897
(115,595)
—
1,078,302
1,248,618
(117,274)
4,089
1,135,433
(978,510)
118,569
(29,869)
(889,810)
* These adjustments relate to foreign currency translation on the deferred tax liabilities.
Unrecognised deferred tax assets
Deferred tax assets relating to the following net operating losses have not been recognised to the extent that it is considered
unlikely that a benefit will be received in the future.
At 31 December 2023, non-US subsidiaries had operating loss carry-forwards for income tax purposes that may be carried
forward indefinitely, available to offset against future taxable income, if any, of approximately $42.9 million (31 December
2022: $37.9 million). At 31 December 2023, non–US subsidiaries also had additional operating loss carry forwards of $12.9
million which are due to expire between 2024 and 2030 and operating loss carry forwards of $0.03 million which are due to
expire between 2031 and 2040.
In total, the Company has unrecognised deferred tax assets of $42.9 million at 31 December 2023 and $43.4 million at
31 December 2022. The Company has not recognised these remaining deferred tax assets because it believes that it is
more likely than not that the losses and other deferred tax assets will not be utilised given their history of operating losses.
Unrecognised deferred tax liabilities
The Company has recognised a deferred tax liability of $52.4 million (2022: $1.6 million) for investments in foreign
subsidiaries where the Company does not consider the earnings to be indefinitely reinvested. Given changes in various tax
laws during 2023, the group has taken the decision to repatriate certain excess earnings which will not be permanently
reinvested and consequently have provided for the relevant tax in the current year. For the deferred tax liability not
recognised in respect of temporary differences related to investments in foreign subsidiaries which are considered to be
indefinitely reinvested, it is not practicable to calculate the exact unrecognised deferred tax liability, however, it is not
expected to be material as Ireland allows a tax credit in respect of distributions from foreign subsidiaries at the statutory tax
rate in the jurisdiction of the subsidiary so that no material tax liability would be expected to arise in Ireland in the event
these earnings were ever remitted. In addition, withholding taxes applicable to remittances from foreign subsidiaries would
not be expected to be material given Ireland’s tax treaty network and the EU parent subsidiary directive.
The Group operates in a number of jurisdictions which have enacted new legislation to implement the global minimum top-
up tax. The Group expects to potentially be subject to the top-up tax in relation to certain jurisdictions where the statutory
rate is below 15%. Additionally, the application of local tax laws in certain jurisdictions, particularly with regard to certain
incentives, has typically resulted in effective tax rates of below 15%. This is expected to create future top-up tax liabilities in
these jurisdictions. However, since the newly enacted tax legislation in Ireland is only effective from 1 January 2024, there is
no current tax impact for the year ended 31 December 2023.
66
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
7. Income tax expense (continued)
The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and
accounts for it as a current tax when it is incurred.
The application of the Pillar Two global minimum tax rules would have been reasonably estimated to increase the Group’s
annual effective tax rate by around 1 to 2 percentage points.
8. Earnings per share
The following table sets forth the computation for basic and diluted net earnings per share for the years ended 31 December
2023 and 31 December 2022:
31 December 2023
31 December 2022
Pre-
exceptional
Exceptional
(Note 9)
Total
Pre-
exceptional
Exceptional
(Note 9)
Total
Numerator ($'000)
Profit attributable to equity holders
684,387
(75,363)
609,024
562,958
(56,673)
506,285
Denominator (Number of shares)
Basic weighted average ordinary
shares outstanding
Effect of dilutive potential ordinary
shares
Diluted weighted average ordinary
shares outstanding
82,101,813 82,101,813 82,101,813 81,532,320 81,532,320 81,532,320
637,626
637,626
637,626 1,004,506 1,004,506 1,004,506
82,739,439 82,739,439 82,739,439 82,536,826 82,536,826 82,536,826
Earnings per Share ($ per share)
Basic earnings per ordinary share
Diluted earnings per ordinary share
8.34
8.27
(0.92)
(0.91)
7.42
7.36
6.90
6.81
(0.70)
(0.69)
6.21
6.13
The Company had 165,129 anti-dilutive shares in issue at 31 December 2023 (31 December 2022: 46,973) comprised of
165,129 options (31 December 2022: 23,486) and nil RSUs (31 December 2022: 23,487).
67
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
9. Exceptional items
Exceptional items are comprised of transaction and integration related, restructuring and financing expenses.
Transaction and integration related
Restructuring charges
Other operating expenses
Income tax expense
Exceptional items (net)
31 December
2023
31 December
2022
$'000
44,176
45,390
89,566
$'000
39,695
31,143
70,838
(14,203)
(14,165)
75,363
56,673
Transaction and integration related
In the years ended 31 December 2023 and 31 December 2022, the Company incurred $44.2 million and $39.7 million,
respectively, of merger-related expenses which were accounted for separately from the business combination and expensed
as incurred within the “Other operating expenses” line item of the Consolidated Statement of Profit and Loss. These costs
relate to professional fees, retention agreements and ongoing integration activities.
Restructuring charges
A restructuring charge of $45.4 million was recognised during the year ended 31 December 2023 (2022: $31.1 million)
under a restructuring plan adopted following a review of operations and are included within the “Other operating expenses”
line item of the Consolidated Statement of Profit and Loss. The restructuring program aims at realigning the Company's
workforce as well as reviewing its global footprint and optimising its locations to best fit the requirements of the Company.
The restructuring program resulted in a charge of $34.1 million (2022: $2.7 million) relating to workforce reductions, an
impairment of ROU assets of $8.7 million (2022: $24.5 million), a fixed asset impairment of $nil (2022: $4.0 million) and
other costs associated with the office consolidation program of $2.6 million (2022: $nil).
At 31 December 2023 and 31 December 2022 a total liability of $7.0 million and $6.0 million, respectively, was included in
the Consolidated Statement of Financial Position relating to restructuring activities. At 31 December 2023, the total liability
included $3.0 million from facilities related liabilities, of which $1.0 million is recorded in provisions and $2.0 million is
included within non-current provisions.The remaining provision of $4.0 million relates to workforce reduction and is included
within provisions.
Opening liability
Additional charges in the year
Utilisation
Ending liability
31 December
2023
31 December
2022
$'000
6,022
36,704
(35,727)
6,999
$'000
10,311
4,364
(8,653)
6,022
68
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits
Payroll costs
The aggregate payroll costs of employees of the Group for the year ended 31 December 2023 and 31 December 2022 were
as follows:
Wages and salaries
Social welfare costs
Pension costs for defined contribution pension schemes
Pension costs for defined benefit pension schemes
Termination benefits
Share-based payment
Total charge to income
Re-measurement of post-employment benefit obligations
Total payroll and related benefit costs
Average employee numbers
31 December
2023
31 December
2022
Note
$’000
$’000
3,052,039
2,952,242
533,629
115,266
319
34,080
51,380
579,714
116,179
744
2,714
55,790
11
11
9
12
3,786,713
3,707,383
11
(525)
(13,265)
3,786,188
3,694,118
The average number of employees, including executive Directors, employed by the Group during the year ended
31 December 2023 and 31 December 2022 was as follows:
Marketing
Administration
Clinical research
Laboratory
Total
Directors’ remuneration
Remuneration policy
31 December
2023
31 December
2022
556
3,580
33,458
2,809
40,403
530
3,560
32,421
2,653
39,164
The Compensation and Organisation Committee seeks to achieve the following goals with the Company’s executive
compensation programmes: to attract, motivate and retain key executives and to reward executives for value creation. The
Committee seeks to foster a performance-oriented environment by ensuring that a significant portion of each executive’s
cash and equity compensation is based on the achievement of performance targets that are important to the Company, its
shareholders and other stakeholders.
The Company’s executive compensation program has three main elements: base salary, a bonus plan and equity incentives
in the form of share related awards granted under the Company’s equity incentive plans. All elements of key executives’
compensation are determined by the Compensation and Organisation Committee based on the achievement of the Group’s
and individual performance objectives. Base salary, bonus awards and Directors’ fees were determined by the
Compensation and Organisation Committee in U.S. dollars, Euro or British pound sterling.
Non-Executive Directors’ remuneration
Non-Executive Directors are remunerated by way of Directors’ fees and are also eligible for participation in the share equity
incentive schemes. During 2023, each Non-Executive Director (excluding the Board Chair) was paid an annual retainer of
$90,000 and additional fees for Board Committee service.
69
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
Mr. Ciaran Murray’s Executive Chair term expired on 12 May 2018 and he transitioned to the role of Non-Executive Chair.
The current arrangement with the Chair provides for payment of €330,000 (translated at average rate for the year:
$356,235) annually.
Mr. Rónán Murphy was appointed as Lead Independent Director with effect from 1 January 2019 and receives an additional
fee of $40,000 for this role.
Non-Executive Directors are not eligible for performance related bonuses and no pension contributions are made on their
behalf. The Compensation and Organisation Committee sets non-Executive remuneration.
Executive Directors’ and Key Executive Officers’ remuneration
Total cash compensation is divided into a base salary portion and a bonus incentive portion. The Committee targets total
cash compensation with regard to healthcare/ biopharmaceutical companies of similar market capitalisation and peer CRO
companies, adjusted upward or downward based on individual performance and experience and level of responsibility. The
Compensation and Organisation Committee believes that the higher the executive’s level of responsibility within the
Company, the greater the percentage of the executive’s compensation that should be tied to the Company’s performance.
Target bonus incentive for executive officers range between 75% and 125% of salary with actual pay outs for 2023 ranging
from 64% to 100%, of salary, based on Group and individual performance.
A total bonus of $1.6 million was awarded to the following individuals; Dr. Steve Cutler, Chief Executive Officer ($1.2 million)
and Mr. Brendan Brennan, Chief Financial Officer ($0.4 million) to reflect their contribution to the performance of the
Company during 2023. These amounts were approved by the Compensation and Organisation Committee and will be paid
during the year ended 31 December 2024.
The Company’s executives are eligible to receive equity incentives, including stock options, Restricted Share Units and
Performance Share Units, granted under the Company’s equity incentive plans. If executives receive equity incentive grants,
they are normally approved annually at the first scheduled meeting of the Committee in the fiscal year. The grant date and
value is determined by the Committee and the number of units granted is determined based on the closing price of the
Company's shares on the day of grant. Newly hired executives may receive sign-on grants. In addition, the Committee may,
at its discretion, issue additional equity incentive awards to executives if the Committee determines such awards are
necessary to ensure appropriate incentives are in place. The equity awards granted to each participant are determined by
the Committee at the start of each year based on peer group data, advice from independent compensation consultants, and
Committee judgment.
During 2023, Performance Share Units (“PSUs”) which were awarded subject to vesting in 2020 vested for Dr. Steve Cutler
Chief Executive Officer in the amount of 22,404 from a potential grant of 22,404. The percentage granted reflects service
and the Company's achievements of diluted non GAAP specified EPS targets over the three year period from 2020 - 2022.
During 2023, Performance Share Units (“PSUs”) which were awarded subject to vesting in 2020 vested for Mr. Brendan
Brennan Chief Financial Officer in the amount of 4,850 from a potential grant of 4,850. The percentage granted reflects
service and the Company's achievements of diluted non GAAP specified EPS targets over the three year period from 2020 -
2022.
All executive officers are eligible to participate in pension plans. The Company’s contributions are generally a fixed
percentage of their annual compensation, supplementing contributions by the executive. The Company has the discretion to
make additional contributions if deemed appropriate by the Committee. The Company’s contributions are determined at the
peer group median of comparable Irish companies and peer CRO companies. Contributions to this plan are recorded as an
expense in the Consolidated Statement of Profit and Loss.
70 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
The Directors, Executive Officers and Company Secretary have the following interests, all of which are beneficial, other than
as stated, in the shares and share options of the Company or other Group companies at the following dates:
Name
Ciaran Murray
Name of company and
description of shares
ICON plc
Interest at
Interest at
31 December 2023
31 December 2022
Number of
shares
Options
Number of
shares
Options
Ordinary Shares €0.06
19,343
—
1,680
58,646
Dr. Steve Cutler
ICON plc
Ordinary Shares €0.06
37,098
222,001
42,377
208,885
Brendan Brennan
ICON plc
Ordinary Shares €0.06
22,105
32,952
23,547
53,105
Rónán Murphy
ICON plc
Ordinary Shares €0.06
2,121
8,084
1,680
9,622
Dr. John Climax
ICON plc
Ordinary Shares €0.06
449,775
23,255
509,297
33,255
Joan Garahy
ICON plc
Ordinary Shares €0.06
2,121
5,005
1,680
5,005
Eugene McCague
ICON plc
Ordinary Shares €0.06
2,121
5,005
1,680
5,005
Julie O'Neill
ICON plc
Ordinary Shares €0.06
1,931
—
1,490
Dr. Linda Grais
ICON plc
Ordinary Shares €0.06
4,435
—
3,994
—
—
Diarmaid Cunningham
ICON plc
Ordinary Shares €0.06
7,980
23,427
7,456
27,893
71
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
Further details regarding the above share options are as follows:
Name
Dr. Steve Cutler
Brendan Brennan
Rónán Murphy
Dr. John Climax
Joan Garahy
Eugene McCague
Diarmaid Cunningham
Options
Exercise
price
15,284
$83.47
29,613
$115.11
32,272
$140.38
42,386
$159.33
37,461
$174.96
35,869
$231.68
29,116
$233.88
1,760
9,176
$140.38
$159.33
8,842
$174.96
7,401
$231.68
5,773
$233.88
3,079
5,005
10,557
7,693
5,005
5,005
$90.03
$125.74
$65.60
$90.03
$125.74
$125.74
5,005
$125.74
1,103
$140.38
5,737
$159.33
5,528
$174.96
6,194
$231.68
4,865
$233.88
Grant date
3 March 2017
3 March 2018
3 March 2019
3 March 2020
3 March 2021
3 March 2022
3 March 2023
3 March 2019
3 March 2020
3 March 2021
3 March 2022
3 March 2023
19 May 2017
18 May 2018
20 May 2016
19 May 2017
18 May 2018
18 May 2018
18 May 2018
3 March 2019
3 March 2020
3 March 2021
3 March 2022
3 March 2023
Expiry date
3 March 2025
3 March 2026
3 March 2027
3 March 2028
3 March 2029
3 March 2030
3 March 2031
3 March 2027
3 March 2028
3 March 2029
3 March 2030
3 March 2031
19 May 2025
18 May 2026
20 May 2024
19 May 2025
18 May 2026
18 May 2026
18 May 2026
3 March 2027
3 March 2028
3 March 2029
3 March 2030
3 March 2031
72
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
The Directors, Executive Officer and Company Secretary held the following Restricted Share Units (“RSUs”) and
Performance Share Units (“PSUs”) awards as at 31 December 2023:
Name
Ciaran Murray
Dr. Steve Cutler
Brendan Brennan
Rónán Murphy
Dr. John Climax
Joan Garahy
Eugene McCague
Julie O'Neill
Dr. Linda Grais
Diarmaid Cunningham
RSUs
1,389
2,959
3,018
3,050
3,019
3,050
3,050
698
622
604
624
604
606
926
926
926
926
926
926
437
521
521
509
509
510
Award date
Vesting Date
PSUs(1)
Award Date
Vesting date
22 May 2023
22 May 2024
3 March 2021
3 March 2024
10,354
3 March 2021
3 March 2024
3 March 2022
3 March 2024
10,565
3 March 2022
3 March 2025
3 March 2023
3 March 2024
10,675
3 March 2023
3 March 2026
3 March 2022
3 March 2025
3 March 2023
3 March 2025
3 March 2023
3 March 2026
3 March 2021
3 March 2024
3 March 2022
3 March 2024
3 March 2023
3 March 2024
2,444
2,179
2,116
3 March 2021
3 March 2024
3 March 2022
3 March 2025
3 March 2023
3 March 2026
3 March 2022
3 March 2025
3 March 2023
3 March 2025
3 March 2023
3 March 2026
22 May 2023
22 May 2024
22 May 2023
22 May 2024
22 May 2023
22 May 2024
22 May 2023
22 May 2024
22 May 2023
22 May 2024
22 May 2023
22 May 2024
3 March 2021
3 March 2024
3 March 2022
3 March 2024
3 March 2022
3 March 2025
1,528
1,824
1,783
3 March 2021
3 March 2024
3 March 2022
3 March 2025
3 March 2023
3 March 2026
3 March 2023
3 March 2024
3 March 2023
3 March 2025
3 March 2023
3 March 2026
(1) Of the issued PSUs, performance conditions will determine how many vest. If performance targets are exceeded,
additional PSUs will be issued and will vest in accordance with the terms of the relevant PSU award. The PSUs vest
based on service and specified EPS targets over the periods 2021 – 2023, 2022 – 2024 and 2023 - 2025. Depending
on the actual amount of EPS from 2021 to 2025, up to a maximum of 38,333 additional PSUs may also be granted to
Dr. Steve Cutler and Mr. Brendan Brennan.
Details of transactions entered into by the Directors, Executive Officers and Company Secretary in shares and share options
of the Company during the year ended 31 December 2023 were as follows:
Share options exercised and sold
Name
Dr. Steve Cutler
Brendan Brennan
Diarmaid Cunningham
Dr. John Climax
Rónán Murphy
Ciaran Murray
Number of Share
Options
16,000
25,926
9,331
10,000
1,538
41,646
Average
Exercise
price
$79.06
$110.61
$120.06
$68.39
$90.03
$71.95
Average
Sales
price
$265.46
$267.79
$255.21
$200.80
$275.28
$222.78
73
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
Share options exercised and held
Name
Ciaran Murray
Shares sold
Name
Dr. John Climax
RSUs and PSU's vested
Name
Dr. Steve Cutler
Brendan Brennan
Ciaran Murray
Rónán Murphy
Dr. John Climax
Joan Garahy
Eugene McCague
Julie O'Neill
Diarmaid Cunningham
Dr. Linda Grais
Shares (vested RSUs and PSU's) sold
Name
Dr. Steve Cutler
Brendan Brennan
Ciaran Murray
Rónán Murphy
Dr. John Climax
Joan Garahy
Eugene McCague
Julie O'Neill
Diarmaid Cunningham
Dr. Linda Grais
Number
of Shares
Average
Exercise
Price
17,000
$95.97
Number
of Shares
Average
Sales
Price
60,000
$274.67
Number
of Shares
31,581
6,864
1,388
925
925
925
925
925
4,424
925
Number
of Shares
36,860
8,306
725
484
447
484
484
484
3,900
484
Average
Vest
Price
$233.88
$233.88
$212.78
$212.78
$212.78
$212.78
$212.78
$212.78
$233.88
$212.78
Average
Sales
Price
$255.85
$252.15
$213.33
$213.36
$213.41
$213.38
$213.36
$213.38
$243.20
$213.38
The price the Company’s ordinary shares during the year ended 31 December 2023 moved in the range of $181.92 to
$288.50 (year ended 31 December 2022: in the range of $173.90 to $296.03). The closing share price at 31 December
2023 was $283.07 (at 31 December 2022: $194.25).
74
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
Summary compensation table - Year ended 31 December 2023
Name
Year
Salary
Company
pension
contribution
Performance
related
compensation
All other
compensation Subtotal
Share-
based
payments
***
Directors’
fees
Total
compensation
$’000
$’000
2023 —
—
$’000
—
$’000
$’000
$’000
$’000
—
—
300
356
$’000
656
2023 1,191
125
1,197
31 2,544
5,980
44
8,568
2023
587
73
381
31 1,072
1,103
—
2,175
—
—
—
—
—
—
—
—
—
—
—
—
—
—
200
159
—
—
—
—
—
—
200
90
—
—
—
—
200
200
200
200
123
123
115
103
359
290
323
323
315
303
2023 1,778
198
1,578
62 3,616
8,583
1,113
13,312
***Share-based payments is the IFRS 2 expense related to share options, RSUs and PSUs. The aggregate amount of the gains earned by
the Directors on the exercise of share options during the financial year is disclosed in Note 6 Profit before taxation under ‘Directors’
emoluments’.
Ciaran
Murray
Dr. Steve
Cutler
Brendan
Brennan
Rónán
Murphy
2023 —
2023 —
Dr. John
Climax
Joan Garahy 2023 —
Eugene
McCague
2023 —
Julie O'Neill
2023 —
2023 —
Dr. Linda
Grais
Total
75 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
10. Payroll and related benefits (continued)
Summary compensation table - Year ended 31 December 2022
Name
Year
Salary
Company
pension
contribution
Performance
related
compensation
All other
compensation
Subtotal
Directors’
fees
Total
compensation
Share-
based
payments
***
$’000
$’000
2022 —
—
$’000
—
$’000
$’000
$’000
$’000
—
—
267
363
$’000
630
2022 1,168
125
1,173
31 2,497
7,504
44
10,045
2022
556
70
342
30
998
1,385
—
2,383
Ciaran
Murray
Dr. Steve
Cutler
Brendan
Brennan
Rónán
Murphy
2022 —
Professor
Hugh Brady*
Dr. John
Climax
2022 —
2022 —
Joan Garahy 2022 —
Professor
William Hall*
Eugene
McCague
2022 —
2022 —
Julie O'Neill
2022 —
2022 —
2022 —
2022 —
Mary
Pendergast*
Colin
Shannon**
Dr. Linda
Grais
Total
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
200
150
—
—
67
54
—
—
202
90
—
—
200
123
—
—
69
58
—
—
200
125
—
—
200
110
—
—
69
54
—
—
—
85
—
—
133
98
350
121
292
323
127
325
310
123
85
231
2022 1,724
195
1,515
61 3,495 10,496
1,354
15,345
* Professor Hugh Brady, Professor William Hall and Ms. Mary Pendergast resigned from the Board of Directors on 26 July 2022.
** Mr. Colin Shannon resigned from the Board of Directors on 9 December 2022.
***Share-based payments is the IFRS 2 expense related to share options, RSUs and PSUs. The aggregate amount of the gains earned by
the Directors on the exercise of share options during the financial year is disclosed in Note 6 Profit before taxation under ‘Directors’
emoluments’.
76
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations
The Group operates a number of defined contribution schemes and defined benefit pension schemes. The Group accounts
for pensions in accordance with IAS 19R Employee Benefits (“IAS 19R”).
(i)
Defined Contribution Schemes
Certain employees of the Group are eligible to participate in a defined contribution or profit sharing plans (the "Plans").
Participants in the Plans may elect to defer a portion of their pre-tax earnings into a pension plan, which is run by an
independent party. The Group matches each participant's contributions up to certain levels of the participant's annual
compensation. Contributions to the plan are recorded as a remuneration expense in the Consolidated Statement of Profit
and Loss. Contributions to Non-US Plans for the year ended 31 December 2023 and year ended 31 December 2022 were
$74.9 million and $70.4 million respectively.
The Group's United States operations maintain retirement plans (the "U.S. Plans") that qualify as deferred salary
arrangements under Section 401(k) of the Internal Revenue Code. Participants in the U.S. Plans may elect to defer a
portion of their earnings, up to the Internal Revenue Service annual contribution limit. The Group matches participant's
contributions at varying amounts, subject to a maximum of 4.5% of the participant's annual compensation. Contributions to
the U.S. Plans are recorded, in the year contributed, as an expense in the Consolidated Statement of Profit and Loss.
Contributions for the year ended 31 December 2023 and year ended 31 December 2022 were $40.4 million and $45.8
million respectively.
(ii)
Defined Benefit Plans
ICON Development Solutions Limited Pension Plan
One of the Group’s subsidiaries, ICON Development Solutions Limited, which was acquired by the Group in 2003, operates
a defined benefit pension plan in the United Kingdom for certain employees, which is now closed to new members.
The plan is managed externally and the related pension costs and liabilities are assessed in accordance with the advice of a
professionally qualified actuary. Plan assets at 31 December 2023 and 31 December 2022 consist of units held in
independently administered funds.
Financial assumptions
The following assumptions were used in determining the fair value of the plan assets and the present value of the projected
benefit obligation at 31 December 2023:
Discount rate
Inflation rate
Future salary increases
31 December
2023
31 December
2022
4.8 %
3.0 %
3.0 %
4.9 %
3.1 %
3.6 %
A single discount rate is used which, when used to discount the projected benefit cashflows underlying a pension scheme
with a 19 year duration, gives the same result as a full AA corporate bond yield curve.
The following assumptions were used at the commencement of the year in determining the net periodic pension cost for the
year ended 31 December 2023:
Discount rate
Future salary increases
31 December
2023
31 December
2022
4.9 %
3.6 %
1.8 %
3.7 %
77 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
Mortality assumptions
Assumptions regarding mortality experience are set based on actuarial advice in accordance with published statistics and
experience. The mortality assumptions adopted at 31 December 2023 are 111%/105% of the standard tables S3PMA/
S3PFA_M, Year of Birth, no age rating for males and females, projected using CMI_2022 converging to 1.25% p.a.. These
imply the following life expectancies, for persons retiring at age 65 (2022: 62):
Male retiring in 2023/2022
Female retiring in 2023/2022
Male retiring in 2048/2042
Female retiring in 2048/2042
Consolidated Financial Statements
Funding status
Projected benefit obligation
Fair value of plan assets
Retirement benefit plan net asset
31 December
2023
31 December
2022
23.4 years
24.4 years
24.8 years
26.2 years
25.8 years
25.8 years
27.3 years
27.8 years
31 December
2023
31 December
2022
$’000
$’000
(20,999)
(19,558)
27,320
6,321
26,050
6,492
Movement in the net benefit asset recognised in other non-current assets was as follows:
Present Value
of Obligations
Fair Value of
Plan Assets
At 1 January 2023
Current service costs
Interest (expense)/income
Re-measurements
Return on plan assets
Gain or loss from change in demographic assumptions
Gain or loss from change in financial assumptions
Experience gain or loss
Exchange differences
Contributions:
- Employers
- Plan participants
Benefit payments
At 31 December 2023
$’000
(19,558)
(35)
(975)
(20,568)
—
470
(382)
239
327
(1,057)
—
(19)
318
299
(20,999)
$’000
26,050
—
1,301
27,351
Total
$’000
6,492
(35)
326
6,783
(1,133)
(1,133)
—
—
—
(1,133)
1,331
70
19
(318)
(229)
27,320
470
(382)
239
(806)
274
70
—
—
70
6,321
78
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
At 1 January 2022
Current service costs
Interest (expense)/income
Re-measurements
Return on plan assets
Gain or loss from change in demographic assumptions
Gain or loss from change in financial assumptions
Experience gain or loss
Exchange differences
Contributions:
- Employers
- Plan participants
Benefit payments
At 31 December 2022
Present Value
of Obligations
Fair Value of
Plan Assets
$’000
(41,813)
(117)
(672)
$’000
36,198
—
580
(42,602)
36,778
—
27
18,983
(393)
18,617
3,932
—
(19)
514
495
(19,558)
(6,626)
—
—
—
(6,626)
(3,677)
70
19
(514)
(425)
26,050
Total
$’000
(5,615)
(117)
(92)
(5,824)
(6,626)
27
18,983
(393)
11,991
255
70
—
—
70
6,492
Re-measurements are recognised in the Consolidated Statement of Comprehensive Income as follows:
Return on plan assets (excl. amounts included in interest income/expense)
Gain or loss from change in demographic assumptions
Gain or loss from change in financial assumptions
Experience gain or loss
Comprehensive income at end of year
31 December
2023
31 December
2022
$’000
(1,133)
470
(382)
239
(806)
$’000
(6,626)
27
18,983
(393)
11,991
Defined benefit pension expense recognised in the Consolidated Statement of Profit and Loss was as follows:
Current service cost recognised in profit or loss
Net interest (income)/expense recognised in profit or loss
Expenses
Net periodic pension (credit)/cost
Plan Assets Fair Value
The fair value of plan assets at 31 December 2023 is analysed as follows:
Unit funds
31 December
2023
31 December
2022
$’000
35
(326)
63
(228)
$’000
117
92
—
209
31 December
2023
31 December
2022
$’000
27,320
$’000
26,050
79
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
The plan’s assets do not include any of the Group’s own financial instruments, nor any property occupied by, or other assets
used by the Group.
At 31 December 2023 the long-term expected rate of return on cash is determined by reference to traditional corporate bond
rates at the latest reporting date. The long-term expected returns on traditional corporate and government bonds are
determined by reference to corporate bond yields and gilt yields respectively at the reporting date.
The underlying asset split of the funds at 31 December 2023 and 31 December 2022 was as follows:
Government Bonds
Diversified Bonds
31 December
2023
31 December
2022
78 %
22 %
88 %
12 %
The assets of the scheme are held on an investment platform with Mercer Limited which invests in a number of investment
funds with MGI and Mercer Sterling. The overall investment strategy is that approximately 78% of investments are in
government bonds and index linked gilts and 22% in diversified bonds. There is no self-investment in employer related
assets.
Sensitivity assumptions
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Discount Rate
Rate of Inflation
Rate of Salary Growth
Rate of Mortality
Change in Assumption
Increase of 0.5% p.a.
Increase of 0.25% p.a.
Increase of 0.25% p.a.
Increase in life expectancy of 1 year
Change in Liabilities
Decrease by 8.5%
Increase by 1.0%
Increase by 0.1%
Increase by 2.7%
The sensitivities shown above are approximate. Each sensitivity considers one change in isolation.
The plan typically exposes the Company to actuarial risks such as investment risk, interest rate risk, salary growth risk,
mortality risk and longevity risk. A decrease in bond yields, a rise in inflation or an increase in life expectancy would result in
an increase to plan liabilities. This would impact the Statement of Financial Position and may give rise to increased charges
in future Statements of Profit and Loss. This effect would be partially offset by an increase in the value of the plan’s bond
holdings, and in qualifying death in service insurance policies that cover mortality risk. Additionally, caps on inflationary
increases are in place to protect the plan against extreme inflation.
Cash flows and Maturity Profiles
The Group expects to contribute approximately $0.1 million of normal contribution to the defined benefit pension scheme for
the year ended 31 December 2024. The average duration of the defined benefit obligation at the period ending
31 December 2023 is 19 years.
80 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
Aptiv Solutions Pension Plan
On 7 May 2014, the Company acquired 100% of the common stock of Aptiv Solutions (“Aptiv”). The acquisition of Aptiv was
accounted for as a business combination in accordance with IFRS 3 Business Combinations. The Company has a defined
benefit plan covering its employees in Switzerland as mandated by the Swiss government. Benefits are based on the
employee’s years of service and compensation. The plan is managed externally and the related pension costs and liabilities
are assessed in accordance with the advice of a professionally qualified actuary. Plan assets at 31 December 2023 and
31 December 2022 consist of units held in independently administered funds.
Funding status
Projected benefit obligation
Fair value of plan assets
Retirement benefit plan net obligation
31 December
2023
31 December
2022
$’000
(6,441)
6,261
(180)
$’000
(5,806)
5,681
(125)
Movement in the net benefit obligation recognised in non-current other liabilities was as follows:
At 1 January 2023
Current service costs
Interest (expense)/income
Past service cost
Re-measurements
Gain or loss from change in financial assumptions
Gain or loss from change in experience
Exchange differences
Contributions:
- Employers
- Plan participants
Benefit payments
At 31 December 2023
Present Value of
Obligations
Fair Value of
Plan Assets
$’000
(5,806)
(109)
(136)
13
$’000
5,681
—
133
—
(6,038)
5,814
(506)
(5)
(511)
(578)
—
(93)
779
686
(6,441)
—
356
356
562
215
93
(779)
(471)
6,261
Total
$’000
(125)
(109)
(3)
13
(224)
(506)
351
(155)
(16)
215
—
—
215
(180)
81
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
At 1 January 2022
Current service costs
Interest (expense)/income
Past service cost
Re-measurements
Gain or loss from change in financial assumptions
Gain or loss from change in experience
Exchange differences
Contributions:
- Employers
- Plan participants
Benefit payments
At 31 December 2022
Present Value of
Obligations
$’000
Fair Value of
Plan Assets
$’000
(7,644)
(146)
(30)
23
6,965
—
29
—
(7,797)
6,994
1,479
48
1,527
148
—
(82)
398
316
(5,806)
—
(985)
(985)
(126)
114
82
(398)
(202)
5,681
Total
$’000
(679)
(146)
(1)
23
(803)
1,479
(937)
542
22
114
—
—
114
(125)
82
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
PRA Switzerland AG Pension Plan
On 1 July 2021, the Company completed the Acquisition of PRA. PRA Switzerland AG, a subsidiary of the Company has a
defined benefit plan covering its employees in Switzerland as mandated by the Swiss government. Benefits are based on
the employee's years of service and compensation. The plan is managed externally and the related pension costs and
liabilities are assessed in accordance with the advice of a professionally qualified actuary. Plan assets at 31 December 2023
and 31 December 2022 consist of units held in independently administered funds.
Movement in the net benefit obligation recognised in non-current other liabilities was as follows:
Funding status
Projected benefit obligation
Fair value of plan assets
Retirement benefit plan net obligation
At 1 January 2023
Current service cost
Interest (expense)/income
Past service cost
Re-measurements
Gain or loss from change in financial assumptions
Gain or loss from change in experience
Exchange differences
Contributions:
- Employers
- Plan participants
Benefit payments
Settlement
At 31 December 2023
31 December
2023
31 December
2022
$’000
(7,747)
5,529
(2,218)
$’000
(5,345)
4,059
(1,286)
Total
$’000
(1,286)
(417)
(31)
—
Present Value of
Obligations
Fair Value of
Plan Assets
$’000
(5,345)
(417)
(132)
—
$’000
4,059
—
101
—
(5,894)
4,160
(1,734)
(574)
(137)
(711)
(644)
—
(456)
(795)
753
(498)
(52)
—
(52)
467
456
456
795
(753)
954
(7,747)
5,529
(626)
(137)
(763)
(177)
456
—
—
—
456
(2,218)
83
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
11. Retirement benefit obligations (continued)
Present Value of
Obligations
Fair Value of
Plan Assets
$’000
(4,990)
(404)
(20)
$’000
3,017
—
12
Total
$’000
(1,973)
(404)
(8)
(5,414)
3,029
(2,385)
1,293
(667)
626
49
—
(325)
(1,125)
844
(606)
(5,345)
106
—
106
(7)
325
325
1,125
(844)
931
4,059
1,399
(667)
732
42
325
—
—
—
325
(1,286)
At 1 January 2022
Current service cost
Interest (expense)/income
Re-measurements
Gain or loss from change in financial assumptions
Gain or loss from change in experience
Exchange differences
Contributions:
- Employers
- Plan participants
Benefit payments
Settlement
At 31 December 2022
12. Share-based payments
Share Options
On 21 July 2008 the Company adopted the Employee Share Option Plan 2008 (the “2008 Employee Plan”) pursuant to
which the Compensation and Organisation Committee of the Company’s Board of Directors may grant options to any
employee, or any director holding a salaried office or employment with the Company or a Subsidiary for the purchase of
ordinary shares. On the same date, the Company also adopted the Consultants Share Option Plan 2008 (the “2008
Consultants Plan”), pursuant to which the Compensation and Organisation Committee of the Company’s Board of Directors
may grant options to any consultant, adviser or non-Executive Director retained by the Company or any Subsidiary for the
purchase of ordinary shares.
On 14 February 2017 both the 2008 Employee Plan and the 2008 Consultants Plan (together the “2008 Option Plans”) were
amended and restated in order to increase the number of options that can be issued under the 2008 Consultants Plan from
0.4 million to 1.0 million and to extend the date for options to be granted under the 2008 Option Plans.
An aggregate of 6.0 million ordinary shares have been reserved under the 2008 Employee Plan, as reduced by any shares
issued or to be issued pursuant to options granted under the 2008 Consultants Plan, under which a limit of 1.0 million
shares applies. Further, the maximum number of ordinary shares with respect to which options may be granted under the
2008 Employee Option Plan, during any calendar year to any employee shall be 0.4 million ordinary shares. There is no
individual limit under the 2008 Consultants Plan. No options may be granted under the 2008 Option Plans after 14 February
2027.
Each option granted under the 2008 Employees Plan or the 2008 Consultants Plan (together the “2008 Option plans”) will
be evidenced by a Stock Option Agreement between the optionee and the Company. The exercise price will be specified in
each Stock Option Agreement, however, option prices will not be less than 100% of the fair market value of an ordinary
share on the date the option is granted. Share option awards are granted with an exercise price equal to the market price of
the Company's shares at date of grant. Share options typically vest over a period of five years from date of grant and expire
eight years from date of grant.
84
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
12. Share-based payments (continued)
PRA Equity Incentive Plans
The following represents the legacy PRA equity incentive plans, which still have equity outstanding but have been
terminated as of 1 July 2021, as to grants of future awards.
Pursuant to the Merger Agreement, effective on 1 July 2021, each outstanding stock option and restricted stock unit under
the PRA Plans was assumed by the Company and converted into a stock option or Restricted Share Unit exercisable for or
payable in Ordinary Shares based on the ratio of the average trading price per Ordinary Share for the ten days prior to 1
July 2021, and the corresponding value of the Merger consideration for each PRA Share. Accordingly, the plans as detailed
below were assumed by the Company.
PRA Health Sciences, Inc. 2020 Stock Incentive Plan (the "2020 Plan”), 2018 Stock Incentive Plan (the "2018 Plan") and
2014 Omnibus Incentive Plan (the "2014 Plan") were amended and restated and assumed by the Company effective as of 1
July 2021.
The 2020 Stock Incentive Plan (“the 2020 Plan”), was approved by the PRA stockholders at their annual meeting on 18 May
2020. The 2020 Plan allowed for the issuance of stock options, stock appreciation rights, restricted shares and restricted
stock units, other stock-based awards, and performance compensation awards as permitted by applicable laws. The 2020
Plan authorised the issuance of 2,500,000 shares of common stock plus all shares that remained available under the prior
plan on 18 May 2020.
The 2018 Stock Incentive Plan (the “2018 Plan”), was approved by the PRA stockholders at their annual meeting on 31 May
2018. The 2018 Plan allowed for the issuance of stock options, stock appreciation rights, restricted shares and restricted
stock units, other stock-based awards, and performance compensation awards as permitted by applicable laws. The 2018
Plan authorised the issuance of 2,000,000 shares of common stock plus all shares that remained available under the 2014
Plan on 31 May 2018 (which included shares carried over from the 2013 Plan).
On 23 November 2014, the PRA Health Sciences, Inc. Board of Directors approved the formation of the 2014 Plan for Key
PRA Employees. The 2014 Plan allowed for the issuance of stock options, stock appreciation rights, restricted shares and
restricted stock units, other stock-based awards, and performance compensation awards as permitted by applicable laws.
Overall
Share option awards are granted with an exercise price equal to the market price of the Company’s ordinary shares at date
of grant. Share options typically vest over a period of five years from date of grant and expire eight to ten years from date of
grant. Share options granted to non-executive directors during 2018 vest over 12 months and expire eight years from the
date of grant. The maximum contractual term of options outstanding at 31 December 2023 is ten years.
Set out below is a summary of the total number of options outstanding and number of options available to grant under each
plan as at 31 December 2023:
2008 Stock Option Plans
Total
Outstanding
Available to Grant
31 December
2023
31 December
2022
31 December
2023
31 December
2022
902,806
1,378,119
2,787,687
2,854,964
902,806
1,378,119
2,787,687
2,854,964
85
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
12. Share-based payments (continued)
The total number of share options outstanding and exercisable at 31 December 2023 is as follows:
Number of
Options
Weighted Average
Exercise Price
Outstanding at 31 December 2021
1,695,460
$110.38
Granted
Exercised
Cancelled/expired
108,643
(348,286)
(77,698)
$229.94
$102.87
$143.08
Outstanding at 31 December 2022
1,378,119
$119.86
Granted
Exercised
Cancelled/expired
82,472
(535,705)
(22,080)
$232.48
$95.12
$196.20
Outstanding at 31 December 2023
902,806
$142.96
Exercisable at 31 December 2023
654,386
$119.67
The weighted average intrinsic value of the Company’s shares on date of exercise of share options during the year ended
31 December 2023 was $150.09 (31 December 2022: $120.36).
At 31 December 2023, the range of exercise prices and weighted average remaining contractual life of outstanding and
exercisable options was as follows:
Range Exercise
Price
$20.83 - 96.15
$103.81 - 121.68
$125.74 - 147.26
$159.33 - 233.88
$20.83 - 233.88
Options Outstanding
Number of
Shares
Weighted
Average
Remaining
Contractual Life
Weighted
Average Exercise
Price
Options Exercisable
Number of
Shares
Weighted
Average Exercise
Price
201,306
132,964
249,194
319,342
902,806
2.29
4.54
4.45
5.69
4.42
—
—
—
—
201,306
132,964
233,371
86,745
—
—
—
—
142.96
654,386
119.67
Share option fair values 2023
The weighted average grant date fair value of share options granted by the Company during the year ended 31 December
2023 was $85.12 based on the following grants:
Grant Date
3 March 23
22 May 23
Number of Shares Weighted Average
Exercise Price
76,066
6,406
82,472
$233.88
$215.91
$232.48
86
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
12. Share-based payments (continued)
Share option fair values 2022
The weighted average grant date fair value of share options granted by the Company during the year ended 31 December
2022 was $65.72 based on the following grants:
Grant Date
3 March 22
21 May 22
Number of Shares Weighted Average
Exercise Price
96,525
12,118
108,643
$231.68
$216.10
$229.94
Fair value of share options – Assumptions
The fair values of options granted during the year ended 31 December 2023 were calculated using the Black Scholes option
pricing-model (2022: binomial option pricing-model) utilising the following assumptions:
Weighted average grant date fair value
Expected volatility (1)
Expected dividend yield
Risk-free rate (2)
Expected life
Rate of forced early exercise
Minimum gain for voluntary early exercise
Rate of voluntary early exercise at minimum gain
31 December 2023 31 December 2022
Annual Awards
Annual Awards
$85.12
33.0 %
—
4.18 %
5.0 years
$65.72
28.0 %
—
1.1% - 2.8%
5.0 years
n/a
n/a
10% per annum
25% of exercise
price
n/a
75% per annum
(1) Expected volatility has been determined based upon the volatility of the Company’s share price over a period which is commensurate
with the expected term of the options granted.
(2) Risk-free rate is dependent on the grant date and term of the award.
Restricted Share Units and Performance Share Units
On 23 April 2013 the Company adopted the 2013 Employees Restricted Share Unit and Performance Share Unit Plan (the
“2013 RSU Plan”) pursuant to which the Compensation and Organisation Committee of the Company’s Board of Directors
may select any employee, or any Director holding a salaried office or employment with the Company, or a Subsidiary to
receive an award under the plan. On 11 May 2015 the 2013 RSU Plan was amended and restated in order to increase the
number of shares that can be issued under the RSU Plan by 2.5 million shares. Accordingly, an aggregate of 4.1 million
ordinary shares have been reserved for issuance under the 2013 RSU Plan. The shares are awarded at zero cost and vest
over a service period. Awards under the 2013 RSU Plan may be settled in cash or shares at the option of the Company. No
awards may be granted under the 2013 RSU Plan after 11 May 2025.
On 30 April 2019 the Company approved the 2019 Consultants and Directors Restricted Share Unit Plan (the “2019
Consultants RSU Plan”), which was effective as of 16 May 2019, pursuant to which the Compensation and Organisation
Committee of the Company’s Board of Directors may select any consultant, adviser or non-executive Director retained by
the Company, or a Subsidiary to receive an award under the plan. 250,000 ordinary shares have been reserved for issuance
under the 2019 Consultants RSU Plan. The awards are at par value and vest over a service period. Awards granted to non-
executive directors vest over twelve months. No awards may be granted under the 2019 Consultants RSU Plan after 16
May 2029.
87
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
12. Share-based payments (continued)
The Company has awarded RSUs and PSUs to certain key individuals of the Group. The fair value of RSUs is based on the
share price at the date of grant, with the expense spread over the vesting period. The following table summarises RSU and
PSU activity for the year ended 31 December 2023:
Outstanding at 31 December 2022
Granted
Shares vested
Forfeited
Outstanding at 31 December 2023
PSU
Outstanding
Number of
Shares
152,420 $
60,374 $
(47,026) $
(60,512) $
105,256 $
PSU
Weighted
Average
Grant Date
Fair Value
192.29
232.51
159.57
198.70
226.29
RSU
Outstanding
Number
of Shares
RSU
Weighted
Average
Grant Date Fair
Value
207.73
582,612 $
308,963 $
(188,800) $
(81,764) $
621,011 $
218.86
187.68
216.03
218.27
The PSUs vest based on service and specified EPS targets over the period 2021 – 2023, 2022 – 2024 and 2023 – 2025.
Depending on the actual amount of EPS from 2021 to 2025, up to an additional 49,340 PSUs may also be granted.
Share-based payment expense
Operating profit for the year ended 31 December 2023 is stated after charging $51.4 million in respect of share-based
payment expense. Share-based payment expense has been allocated as follows:
Direct costs
Other operating expenses
Total
31 December
2023
31 December
2022
$’000
25,672
25,708
51,380
$’000
17,331
38,459
55,790
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92
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
14. Goodwill and intangible assets (continued)
Impairment review of goodwill
Goodwill is subject to impairment testing on an annual basis, or more frequently if there are indicators of impairment. These
assets are allocated to groups of cash generating units (CGUs). The recoverable amount of each of the CGUs is determined
based on value-in-use calculations. Goodwill acquired through business combinations has been allocated to the Group’s
three CGUs. The CGUs identified represent the lowest level within the Group at which goodwill is monitored and are not
larger than the operating segment determined in accordance with IFRS 8 Operating Segments.
The Group has identified three CGUs in accordance with the provisions of IAS 36 Impairment of Assets.
A summary of the allocation of the carrying value of goodwill by CGU, is as follows:
Clinical Research
Strategic Solutions
Data Solutions
Total Goodwill
Impairment testing methodology and results
31 December
2023
31 December
2022
$’000
$’000
7,334,649
7,284,244
1,372,648
1,372,648
367,587
367,587
9,074,884
9,024,479
Cash flow forecasts employed for the value-in-use calculations are for a five year period approved by management and a
terminal value which is applied to the year five cash flows. The terminal value reflects the discounted value of the cash flows
beyond year five which is based on the weighted average long-term growth rates for each CGU.
Management’s estimates of future cash flows are based upon current budgets and strategic plans and are reflective of
anticipated growth rates within the CRO industry, expected growth in the Group’s market share and reflective of past
experience. Key assumptions applied in determining expected future cash flows for these plans include management’s
estimate of future profitability, replacement capital expenditure requirements, trade working capital investment needs and tax
considerations. The Group’s cash flow projections are adjusted each year for actual and expected changes in performance.
The following assumptions were applied in determining the ten year projected cash flows of the three CGUs at 31 December
2023:
Expected revenue growth rate
Expected growth rate for operating costs
Expected effective tax rate
Discount rate
Long term growth
31 December 2023
Clinical
Research
Strategic
Solutions
Data
Solutions
6.1 %
5.9 %
16.5 %
10.8 %
3.0 %
7.6 %
7.4 %
16.5 %
10.8 %
3.0 %
7.9 %
6.1 %
16.5 %
10.8 %
3.0 %
93 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
14. Goodwill and intangible assets (continued)
Expected revenue growth and the expected growth in operating costs are determined based upon the expected growth
rates used in preparing the Group’s budgets and strategic plans. In estimating budget revenue, consideration is given to
current levels of backlog (i.e. the value of new business awards not yet recognised in revenue) and the estimated timeframe
over which this is expected to be recognised within revenue, together with an estimate of revenue expected to be generated
from new awards not currently within backlog. In estimating revenue from new awards, consideration is given to current RFP
(request for proposals) volumes, expected growth rates in both the CRO industry and the Group’s market share, and of past
experience. In estimating budgeted operating costs, consideration is given to required staffing levels, project related costs,
facility and information technology costs and other costs. Staff costs and project related costs generally increase in line with
revenue and are therefore estimated based on revenue growth expectations, while facility and IT costs and other costs are
relatively fixed and are therefore projected based upon a lower growth rate. An expected long-term average tax rate of
16.5% (2022: 15.5%) has been applied in determining the projected after tax cash flows.
Expected annual working capital growth and expected capital expenditure growth are based upon the expected growth rates
used in preparing the Group’s budgets and strategic plans. Long term growth rates were based on global macroeconomic
data.
A pre-tax discount rate of 10.8% (2022: 11.5%) has been applied to the projected cash flows of the CGUs in determining its
value-in-use. This rate is reflective of both the time value of money and risks specific to the CGUs. The discount rate is
based upon the Group’s weighted average cost of capital which has been determined by applying the Group’s long-term
optimal capital structure to its costs of debt and cost of equity. The Group’s cost of debt has been calculated by applying an
appropriate margin over the risk-free interest rate. The Group’s cost of equity has been calculated using the capital asset
pricing model and includes an appropriate equity risk premium over the available risk-free interest rate. The Group’s
weighted average cost of capital is adjusted to reflected additional risk premiums associated with each CGU.
No impairment was recognised in 2023 or 2022 as a result of the impairment testing which identified headroom in the
recoverable amount of the related CGUs as compared to their carrying value.
Sensitivity Analysis
A sensitivity analysis to determine if reasonable changes in key assumptions could lead to an impairment was conducted at
31 December 2023. The table below identifies the amounts by which each of the specified assumptions may either decline
or increase to arrive at a zero excess of the present value of future cash flows over the carrying value of goodwill in the
CGU:
Expected revenue growth rate decreased by*
Discount rate increased by*
*All other inputs remained constant
31 December 2023
Clinical
Research
Strategic
Solutions
Data
Solutions
3.0 %
10.7 %
6.0 %
17.4 %
3.0 %
3.6 %
Management believes that the assumptions originally used in the value-in-use models are sufficiently prudent to ensure no
reasonable change, in normal circumstances, in any of the above key assumptions would cause the carrying value of any
CGU to exceed its recoverable amount.
94 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
15. Business combinations
(a) BioTel Research LLC Acquisition
On 2 October 2023, the Company acquired the entire outstanding equity interests of BioTel Research LLC (“BioTel”), a
leading provider of medical imaging and cardiac safety monitoring services, from BioTelemetry Inc. in exchange for initial
cash consideration of $68.1 million. Cash acquired amounted to $1.4 million. The purchase price allocation, as of the date of
acquisition, was based on a preliminary valuation and may be subject to revision. Preliminarily, the BioTel acquisition
resulted in the initial recognition of intangible assets of $36.5 million and goodwill of $23.4 million. Preliminary goodwill
arising in connection with the acquisition is primarily attributable to the assembled workforce of BioTel and the expected
synergies of the acquisition.
(b)
Oncacare Limited Acquisition
On 20 April 2023, the Company completed the purchase of the majority investor's 51% majority voting share capital of
Oncacare Limited ("Oncacare") for $5.1 million, such that Oncacare and its subsidiaries became wholly-owned subsidiaries
of the ICON Group. The Oncacare acquisition resulted in goodwill of $13.4 million and also gave rise to an acquisition-
related gain of $6.2 million.
(c)
PRA Health Sciences, Inc. Acquisition
On 1 July 2021 (the "Merger Date"), the Company completed the Acquisition of PRA by means of a merger whereby Indigo
Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA Health Sciences, Inc., the
parent of the PRA Health Sciences Group ("the Acquisition" and "the Merger"). The combined Group has retained the name
ICON and brought together approximately 38,000 (as at the Merger date) employees across the globe, creating one of the
world’s most advanced healthcare intelligence and clinical research organisation. The Merger was accounted for as a
business combination using the acquisition method of accounting in accordance with IFRS 3 'Business Combinations'.
The combined Company leverages its enhanced operations to transform clinical trials and accelerate biopharma customers’
commercial success through the development of much needed medicines and medical devices. The new ICON has a
renewed focus on leveraging data, applying technology and accessing diverse patient populations to speed up drug
development.
Upon completion of the Merger, pursuant to the terms of the Merger Agreement, PRA became a wholly owned subsidiary of
the ICON Group. Under the terms of the Merger, PRA shareholders received per share $80 in cash and 0.4125 shares of
ICON stock.
In the years ended 31 December 2023 and 31 December 2022, the Company incurred approximately $44.2 million and
$39.7 million, respectively, of Merger-related expenses which were accounted for separately from the business combination
and expensed as incurred within the Other Operating Expenses line item of the Consolidated Statement of Profit and Loss.
These costs consist primarily of investment banker fees, advisory costs, professional fees, retention agreements with
employees, accelerated share-based compensation charges, and ongoing integration activities.
In the years ended 31 December 2023 and 31 December 2022, the Company incurred approximately $16.4 million and
$17.7 million, respectively, of Merger-related financing fees which are included in the “Financing Expense” line item in the
Consolidated Statement of Profit and Loss.
The Merger Date fair value of the consideration transferred consisted of the following:
Fair value of cash consideration
Fair value of ordinary shares issued to acquiree stockholders
Fair value of replacement share-based awards issued to acquiree employees
Repayment of term loan obligations and accrued interest *
$'000
5,308,646
5,658,126
267,607
865,800
12,100,179
* This represents the portion of PRA debt paid by ICON. PRA also paid $401.6 million from available cash to settle debt
obligations that existed at the Merger Date.
The following table summarises the allocation of the consideration transferred based on the Merger Date fair values of
assets acquired and liabilities assumed, with the excess of the purchase price over the fair values of the identifiable net
assets acquired recorded as goodwill:
95
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
15. Business combinations (continued)
Fair Value
Cash and cash equivalents
Accounts receivable and unbilled revenue
Other current assets
Property, plant and equipment
Operating lease right-of-use assets
Goodwill *
Intangible assets
Deferred tax assets
Other assets
Accounts payable
Accrued expenses and other current liabilities
Current portion of operating lease liabilities
Unearned revenue
Non-current portion of operating lease liabilities
Deferred tax liabilities
Other non-current liabilities
Net assets acquired
1 July 2021
$'000
259,971
934,308
125,156
101,743
180,679
8,123,003
4,974,119
28,587
33,928
(50,259)
(380,342)
(36,775)
(723,278)
(146,903)
(1,119,762)
(203,996)
12,100,179
* The goodwill in connection with the Merger is primarily attributable to the assembled workforce of PRA and the expected
synergies of the Merger. None of the goodwill recognised is deductible for income tax purposes.
The following table summarises the fair value of identified intangible assets and their respective useful lives as of the Merger
Date:
Estimated Useful Life
Estimated Fair Value
Customer relationships
Order backlog
Trade names
Patient database
Technology assets
Software
23 years
3 years
3 years
7 years
5 years
2-8 years
$'000
3,938,000
500,000
202,000
168,000
111,000
55,119
4,974,119
At 30 June 2022, the Company completed its review of the 1 July 2021 acquisition balance sheet of PRA and completed the
final valuation associated with certain assets acquired and liabilities assumed. During the year ended 31 December 2022,
the Company recognised certain measurement period adjustments as shown in the table below:
Goodwill
Intangible assets
Deferred tax assets
Deferred tax liabilities
Other non-current liabilities
Measurement period
adjustments
$'000
(36,579)
33,000
(2,910)
7,188
(699)
The impact of these measurement period adjustments has been incorporated with effect from the Merger Date.
96
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
16. Inventories
Laboratory inventories
31 December
2023
31 December
2022
$’000
8,442
$’000
7,063
The cost of inventories is recognised as an expense and included in direct costs in the Consolidated Statement of Profit and
Loss. For the year ended 31 December 2023, $79.0 million (2022: $74.0 million) was charged to the Consolidated
Statement of Profit and Loss. There was no material difference between the Consolidated Statement of Financial Position
value of inventories and their replacement costs.
17. Accounts receivable, unbilled services (contract assets) and unearned revenue (contract liabilities)
Accounts receivables and unbilled revenue are as follows:
Billed services (accounts receivable)
Unbilled services (unbilled revenue)
Trade accounts receivable and unbilled revenue, gross
Allowance for credit losses
Trade accounts receivable and unbilled revenue, net
31 December
2023
31 December
2022
$’000
$’000
1,821,855
1,751,950
951,936
957,655
2,773,791
2,709,605
(31,533)
(20,562)
2,742,258
2,689,043
Accounts receivables are amounts due from customers for services performed in the ordinary course of business. They are
generally due for settlement within 30-90 days and therefore are all classified as current. Accounts receivable are
recognised initially at the amount of consideration that is unconditional. Accounts receivable balances do not contain
significant financing components. The Group holds the accounts receivable with the objective to collect the contractual cash
flows and therefore measures them subsequently at amortised cost.
All receivables are due within twelve months of the year ended 31 December 2023. Due to the short-term nature of the
current receivables, their carrying amount is considered to be the same as their fair value.
Unbilled services and unearned revenue (contract assets and liabilities) were as follows:
31 December
2023
31 December
2022
Change
% Change
$’000
$’000
$’000
Unbilled services (unbilled revenue)
951,936
957,655
(5,719)
Unearned revenue (payments on account)
(1,654,507)
(1,507,449)
(147,058)
(702,571)
(549,794)
(152,777)
(0.6) %
9.8 %
27.8 %
Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to
our contracts with customers. We record assets for amounts related to performance obligations that are satisfied but not yet
billed and/or collected. These assets are recorded as unbilled revenue and therefore contract assets rather than accounts
receivables when receipt of the consideration is conditional on something other than the passage of time. Liabilities are
recorded for amounts that are collected in advance of the satisfaction of performance obligations or billed in advance of the
revenue being earned.
Unbilled services/revenue balances arise where invoicing or billing is based on the timing of agreed milestones related to
service contracts for clinical research. Contractual billing arrangements in respect of certain reimbursable expenses
(principally investigators) require billing by the investigator to the Company prior to billing by the Company to the customer.
97
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
17. Accounts receivable, unbilled services (contract assets) and unearned revenue (contract liabilities) (continued)
The Company is the contract principal in respect of both direct services and in the use of third parties (principally
investigator services) that support a clinical trial. The progress towards completion for clinical service contracts is measured
based on total project costs (including reimbursable costs). Reimbursable expenses are included within direct costs and are
recorded based on activity undertaken by the third-party. Amounts owed to investigators and others in respect of
reimbursable expenses was $333.0 million at 31 December 2023 and $406.3 million at 31 December 2022 (see note 21
Accrued and other liabilities).
Unbilled services as at 31 December 2023 decreased by $5.7 million as compared to 31 December 2022. Unearned
revenue increased by $147.1 million resulting in an increase of $152.8 million in the net balance of unbilled services and
unearned revenue between 31 December 2022 and 31 December 2023. These fluctuations are primarily due to the timing of
payments and invoicing related to the Company's clinical trial management contracts. Billings and payments are established
by contractual provisions including predetermined payment schedules which may or may not correspond to the timing of the
transfer of control of the Company's services under the contract. Unbilled services arise from long-term contracts when a
cost-based input method of revenue recognition is applied and revenue recognised exceeds the amount billed to the
customer.
As of 31 December 2023 approximately $14.8 billion (2022: $13.7 billion) of revenue is expected to be recognised in the
future in respect of unsatisfied performance obligations. The Company expects to recognise revenue on approximately 52%
(2022: 52%) of the unrealised performance obligation over the next 12 months, with the remainder recognised thereafter
over the duration of the customer contracts.
Impairment of financial assets
At 31 December 2023, the Group maintained an impairment provision of $31.5 million (2022: $20.6 million). The credit loss
expense recognised on the Group's receivables and unbilled services was $24.6 million and $17.8 million for the twelve
months ended 31 December 2023 and 2022, respectively.
The Group's estimate of expected credit losses considers historical credit loss information that is adjusted, where necessary,
for current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the
estimation of expected credit losses. The Group's receivables and unbilled services are predominantly due from large and
mid-tier pharmaceutical and biotechnology companies that share similar risk characteristics. The Group monitors their
portfolio of receivables and unbilled services for any deterioration in current or expected credit quality (for example expected
delinquency level), and adjusts the allowance for credit losses as required. Receivables for which an impairment provision
was recognised were written off against the provision when there was no expectation of recovering additional cash.
The Group considered that there was evidence of impairment if any of the following indicators were present:
•
•
•
significant financial difficulties of the debtor
probability that the debtor will enter a financial restructuring process
default or late payment
The closing loss allowance for trade receivables and contract assets as at 31 December 2023 and 31 December 2022
reconciles to the opening loss allowances as follows:
Balance at start of year
Receivables written off during the year as uncollectible
Increase in loss allowance recognised in profit or loss during the year
Foreign currency translation
Balance at end of year
31 December
2023
31 December
2022
$’000
20,562
(13,358)
24,550
(221)
$’000
7,081
(3,913)
17,800
(406)
31,533
20,562
98
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
17. Accounts receivable, unbilled services (contract assets) and unearned revenue (contract liabilities) (continued)
Further analysis of the Group’s accounts receivable balances at 31 December 2023 and 31 December 2022 is as follows:
Gross accounts receivable
Not past due
Past due 0 to 30 days
Past due 31 to 60 days
Past due 61+ days
Accounts receivable
31 December
2023
31 December
2022
$’000
$’000
1,239,075
1,298,520
157,673
185,282
102,556
86,059
322,551
182,089
1,821,855
1,751,950
The carrying amounts of the Group’s accounts receivables are denominated in the following currencies:
Currency
US Dollar
Euro
Sterling
Other currencies
Total
18. Other assets
Non-current other assets
Lease deposits
Deferred employee savings scheme assets
Other receivables
Total
31 December
2023
31 December
2022
$’000
$’000
1,394,414
1,310,111
327,816
348,194
13,785
85,840
19,641
74,004
1,821,855
1,751,950
31 December
2023
31 December
2022
$’000
$’000
17,667
21,086
39,717
78,470
15,210
24,260
37,391
76,861
Lease deposits paid in respect of certain premises leased by the Group are refundable on expiry of the related leases.
Discounting of the non-current element has not been applied because the discount would be immaterial. However,
discounting may apply in the future if the non-current element becomes significant such that the discounting impact would
be material.
Other current assets
Personnel related prepayments
Facility and information system related prepayments
General overhead prepayments
Sales tax recoverable
Other receivables
Total
31 December
2023
31 December
2022
$’000
$’000
2,655
69,881
39,529
32,183
45,212
954
58,342
57,258
24,029
47,034
189,460
187,617
99
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
18. Other assets (continued)
Other current assets do not contain any impaired assets. The maximum exposure to credit risk at the reporting date is the
carrying value of each receivable, other than prepayments which do not have credit risk. The Group does not hold any
collateral as security.
19. Financial asset investments
(a) Current asset investments - fair value through OCI
At start of year
Additions
Disposals/maturities
At end of year
31 December
2023
31 December
2022
$’000
1,713
2,857
(2,616)
1,954
$’000
1,712
482
(481)
1,713
Current asset investments comprise highly liquid investments with maturities of greater than three months and minimum “A-”
rated fixed and floating rate securities.
(b) Non-current financial assets - fair value through profit or loss
The Company entered into subscription agreements with a number of funds. During the year ended 31 December 2023,
capital totalling $14.0 million had been advanced under the terms of the subscription agreements (2022: $3.7 million).
The Company determined that the interests in the funds meet the definition of equity securities without readily determinable
fair values. The valuation technique is based on the net asset value of the fund as prepared by an independent appraiser.
Inputs are generally unobservable as the funds are not traded on an exchange and data is not published in respect of the
funds. The fair value of interests in the funds are therefore represented by Level 3 fair value measurements.
There was an increase in fair value of $0.2 million (2022: $6.3 million) recognised in the Consolidated Statement of Profit
and Loss during the year bringing the carrying value of the subscriptions to $46.8 million at 31 December 2023 (2022: $32.6
million).
At 31 December 2023, the Company had committed to future investments of $66.4 million in respect of these funds.
(c) Equity method investments
On 24 July 2020, the Company obtained a 49% interest in the voting share capital of Oncacare Limited ("Oncacare") in
exchange for consideration of $4.9 million. At that time, the Company’s investment in Oncacare was accounted for under the
equity method due to the Company's ability to exercise significant influence over Oncacare which was considered to be
greater than minor. The Company recorded its pro rata share of the earnings/losses of the investment in 'Share of equity
method investment losses' in the Consolidated Statement of Profit and Loss (see note 1 Basis of preparation and statement
of accounting policies).
During the year ended 31 December 2023, the Company recorded losses of $0.4 million representing its pro rata share of
the losses in Oncacare (2022: $3.1 million).
On 20 April 2023, the Company completed the purchase of the majority investor’s 51% majority voting share capital of
Oncacare, such that Oncacare and its subsidiaries became wholly owned subsidiaries of the ICON Group.
100
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
20. Cash and cash equivalents
Cash at bank and in hand
21. Accrued and other liabilities
Non-current other liabilities
Personnel related liabilities
Deferred government grants (note 22)
Retirement plans net obligation
Deferred employee savings scheme liabilities
Other liabilities
Total
31 December
2023
31 December
2022
$’000
$’000
378,102
288,768
31 December
2023
31 December
2022
$’000
$’000
109
854
14,738
13,228
15,021
43,950
155
1,115
13,033
11,220
12,229
37,752
Deferred employee savings scheme liabilities are payable more than 5 years from the reporting date (see note 26 Financial
instruments). Discounting of the non-current element has not been applied because the impact would be immaterial.
However, discounting may apply in the future if the non-current element becomes significant such that the discounting
impact would be material.
Current accrued and other liabilities
Personnel related liabilities
Facility related liabilities
General trade and overhead liabilities*
Lease liabilities (note 27)
Other liabilities
Short-term government grants (note 22)
Total
31 December
2023
31 December
2022
$’000
$’000
385,499
395,862
11,078
16,896
463,882
530,204
36,414
13,532
43
43,656
12,852
42
910,448
999,512
*includes amounts due to third parties in respect of accrued reimbursable investigator expenses of $333.0 million at
31 December 2023 and $406.3 million at 31 December 2022.
101
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
22. Deferred government grants
At beginning of year
Grant additions
Amortised during the year
Foreign exchange movement
At end of year
Current (note 21)
Non-current (note 21)
Total
31 December
2023
31 December
2022
$’000
1,157
24
(281)
(3)
897
43
854
897
$’000
780
536
(155)
(4)
1,157
42
1,115
1,157
Under grant agreements amounts received may become repayable in full or in part should certain circumstances specified
within the grant agreements occur, including downsizing by the Group, disposing of the related assets, ceasing to carry on
its business or the appointment of a receiver over any of its assets.
23. Bank credit lines and loan facilities
The Company had the following debt outstanding as at 31 December 2023 and 31 December 2022:
Interest rate as of
Principal amount
Maturity Date
31 December
2023
31 December
2022
31 December
2023
31 December
2022
$'000
$'000
Senior Secured Term Loan
Senior Secured Notes
July 2028
July 2026
7.860 %
2.875 %
7.092 %
3,251,213
4,201,213
2.875 %
500,000
500,000
Senior Secured Revolving Loan
January 2024
6.720 %
—
55,000
—
Total debt
Less current portion of debt
Total long-term debt
Less debt issuance costs and debt discount
Total long-term debt, net
3,806,213
4,701,213
(110,150)
(55,150)
3,696,063
4,646,063
(30,624)
(47,026)
3,665,439
4,599,037
As of 31 December 2023, the contractual maturities of the Company's debt obligations were as follows:
Current maturities of debt:
2024
2025
2026
2027
2028 and thereafter
Total
$'000
110,150
55,150
555,150
55,150
3,030,613
3,806,213
The Company's primary financing arrangements are its senior secured credit facilities (the "Senior Secured Credit
Facilities"), which consists of a senior secured term loan and a revolving credit facility, and the senior secured notes (the
"Senior Secured Notes").
102
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
23. Bank credit lines and loan facilities (continued)
Senior Secured Credit Facilities
On 1 July 2021, the Company completed the acquisition of PRA Health Sciences, Inc. ("PRA") by means of a merger
whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of
the PRA Health Sciences ("the Merger"). In conjunction with the completion of the Merger, on 1 July 2021, ICON entered
into a credit agreement providing for a senior secured term loan facility of $5,515 million and a senior secured revolving loan
facility in an initial aggregate principal amount of $300 million (the "Senior Secured Credit Facilities"). The Senior Secured
Credit Facility and Senior Secured Notes were issued at a discount of $27.6 million. On 2 May 2023, the Company agreed
with its lenders to increase the aggregate principal amount of the senior secured revolving loan facility from $300 million to
$500 million.
Borrowings under the senior secured term loan facility amortise in equal quarterly installments in an amount equal to 1.00%
per annum of the principal amount, with the remaining balance due at final maturity. The interest rate margin applicable to
borrowings under the senior secured term loan facility is USD Term SOFR and a Term SOFR Adjustment depending on the
interest period chosen plus an applicable margin which is dependent on the Company's net leverage ratio. As of
31 December 2023, the applicable margin is 2.25%. The senior secured term loan facility is subject to a floor of 0.50%.
The interest rate margin applicable to borrowings under the revolving loan facility will be, at the option of the borrower, either
(i) the applicable base rate plus an applicable margin of 1.00%, 0.60% or 0.25% based on ICON’s current corporate family
rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively, or (ii) Term SOFR plus a Term SOFR
Adjustment on the interest period chosen plus an applicable margin of 2.00%, 1.60% or 1.25% based on ICON’s current
corporate family rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively. In addition, lenders under the
revolving loan facility are entitled to commitment fees as a percentage of the applicable margin at the time of drawing and
utilisation fees dependent on the proportion of the facility drawn. At 31 December 2023, $445 million remained undrawn
under the senior secured revolving loan facility.
The Borrowers’ (as defined in the credit agreement) obligations under the Senior Secured Credit Facilities are guaranteed
by ICON and the subsidiary guarantors. The Senior Secured Credit Facilities are secured by a lien on substantially all of
ICON’s, the Borrowers’ and each of the subsidiary guarantor’s assets (subject to certain exceptions), and the Senior
Secured Credit Facilities will have a first-priority lien on such assets, which will rank pari passu with the lien securing the
Senior Secured Notes, subject to other permitted liens. The Company is permitted to make prepayments on the senior
secured term loan without penalty. The Company's long-term debt arrangements contain customary restrictive covenants
and, as of 31 December 2023, we were in compliance with our restrictive covenants in all material respects.
Principal repayments, comprising mandatory and voluntary repayments, during the year ended 31 December 2023 and
31 December 2022 were as follows:
Principal repayments
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
December 31,
2023
December 31,
2022
$'000
250,000
150,000
300,000
250,000
950,000
$'000
300,000
100,000
200,000
200,000
800,000
The voluntary repayments made during the year resulted in an accelerated charge associated with previously capitalized
fees of $7.9 million (31 December 2022: $7.8 million).
During the year ended 31 December 2023, the Company drew down $370.0 million (31 December 2022: $75 million) of the
senior secured revolving loan facility and repaid $315.0 million (31 December 2022: $75 million) as shown below. As at
31 December 2023, $55 million (31 December 2022: $Nil million ) was drawn under the senior secured revolving loan
facility.
103
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
23. Bank credit lines and loan facilities (continued)
31 December 2022
Quarter 1, 2023
Quarter 2, 2023
Quarter 3, 2023
Quarter 4, 2023
Senior Secured Notes
Drawdown
Repayment
$'000
$'000
—
—
180,000
100,000
50,000
75,000
65,000
80,000
50,000
85,000
370,000
315,000
Closing
Balance
$'000
—
80,000
50,000
75,000
55,000
In addition to the Senior Secured Credit Facilities, on 1 July 2021, a subsidiary of the Company issued $500 million in
aggregate principal amount of 2.875% senior secured notes due 2026 in a private offering (the “Offering”). The Senior
Secured Notes will mature on 15 July 2026.
Fair Value of Debt
The estimated fair value of the Company’s debt was $3,793.5 million and $4,650.3 million at 31 December 2023 and
31 December 2022, respectively. The fair values of the Senior Secured Credit Facilities and Senior Secured Notes were
determined based on Level 2 inputs, which are based on rates at which the debt is traded among financial institutions. The
fair value of the senior secured revolving loan facility is recorded as its carrying value due to the short term duration.
Derivatives
The Company has entered into interest rate cap and swap agreements for purposes of managing its exposure to interest
rate fluctuations. These financial derivative agreements are designated as Cash Flow Hedges. See note 26 - Financial
Instruments for related information and disclosures.
Net Debt
The movement in net debt by category is as follows:
1 Jan
2023
$'000
Net cash
inflow/
(outflow)
Other non-
cash
adjustments
Effects of
exchange
rates
$'000
$'000
$'000
31 Dec
2023
$'000
Net cash and cash equivalents
288,768
90,331
—
(997)
378,102
Financial assets at fair value through other
comprehensive income
Total cash and cash equivalents
1,713
241
290,481
90,572
—
—
—
1,954
(997)
380,056
1 Jan
2023
$'000
Drawn
down
$'000
Repaid
$'000
Net cash
(inflow)/
outflow
Other non-
cash
adjustments
Effect of
exchange
rates
$'000
$'000
$'000
31 Dec
2023
$'000
Lease liabilities
(175,300)
—
53,802
53,802
(41,365)
128
(162,735)
Revolving Credit Facility
—
(370,000) 315,000
(55,000)
—
—
(55,000)
Senior Secured Credit
Facilities
(4,156,676)
— 950,000
950,000
(14,743)
— (3,221,419)
Senior Secured Notes
(497,511)
—
—
(1,659)
—
(499,170)
Total borrowings and
lease liabilities
(4,829,487)
(370,000) 1,318,802
948,802
(57,767)
128 (3,938,324)
104
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
24. Share capital
Group and Company
Authorised share capital:
Ordinary shares of par value €0.06
No. of Ordinary Shares
100,000,000
31 December
2023
31 December
2022
$’000
$’000
Allotted, called up and fully paid
82,495,086 (31 December 2022: 81,723,555) ordinary shares of €0.06 each
6,699
6,649
Issued, fully paid share capital
At beginning of year
Employee share options exercised
Restricted share units/ performance share units
Repurchase of ordinary shares
At end of year
6,649
6,640
35
15
—
6,699
21
16
(28)
6,649
Holders of ordinary shares will be entitled to receive such dividends as may be recommended by the Board of Directors of
the Company and approved by the Shareholders and/or such interim dividends as the Board of Directors of the Company
may decide. On liquidation or a winding up of the Company, the par value of the ordinary shares will be repaid out of the
assets available for distribution among the holders of the ordinary shares of the Company. Holders of ordinary shares have
no conversion or redemption rights. On a show of hands, every holder of an ordinary share present in person or proxy at a
general meeting of shareholders shall have one vote, for each ordinary share held with no individual having more than one
vote.
(a)
Employee share based payments
During the year ended 31 December 2023, 535,705 options were exercised by employees at an average exercise price of
$95.12 per share for total proceeds of $51.0 million. During the year ended 31 December 2023, 188,800 ordinary shares
were issued in respect of certain RSUs and 47,026 ordinary shares were issued in respect of PSUs previously awarded by
the Company.
During the year ended 31 December 2022, 348,286 options were exercised by employees at an average exercise price of
$102.87 per share for total proceeds of $35.8 million. During the year ended 31 December 2022, 195,029 ordinary shares
were issued in respect of certain RSUs and 46,087 ordinary shares were issued in respect of PSUs previously awarded by
the Company.
(b)
Share repurchase programme
A resolution was passed at the Company’s Annual General Meeting (“AGM”) on 22 July 2016, which authorised the
Directors to purchase (buyback) up to 10% of the outstanding shares in the Company. This resolution has been renewed
annually thereafter. On 18 February 2022, the Company commenced a share buyback program which was fully complete
at 31 March 2022. Under this buyback program, 420,530 ordinary shares were redeemed by the Company for total
consideration of $100.0 million.
All ordinary shares that were redeemed under the buyback program were cancelled in accordance with the Constitution of
the Company and the nominal value of these shares transferred to other undenominated capital as required under Irish
Company law.
105
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
24. Share capital (continued)
Under the repurchase program, a broker purchased or may purchase the Company's shares from time to time on the open
market or in privately negotiated transactions in accordance with agreed terms and limitations. The program was and may
be in the future designed to allow share repurchases during periods when the Company would ordinarily not be permitted to
do so because it may be in possession of material non-public or price-sensitive information or due to applicable insider
trading laws or self-imposed trading blackout periods. The Company's instructions to the broker in such cases were or may
in the future be irrevocable and the trading decisions in respect of the repurchase program were made or will be made
independently of and uninfluenced by the Company. The Company confirms that on entering the share repurchase plans it
had no material non-public, price-sensitive or inside information regarding the Company or its securities. Furthermore, the
Company will not enter into additional plans whilst in possession of such information. The timing and actual number of
shares acquired by way of the redemption will be dependent on market conditions, legal and regulatory requirements and
the other terms and limitations contained in the program. In addition, acquisitions under the program may be suspended or
discontinued in certain circumstances in accordance with the agreed terms. Therefore, there can be no assurance as to the
timing or number of shares that may be acquired under the program.
25. Capital and reserves
Share premium
Other undenominated capital
Share-based payment reserve
Other reserves
Foreign currency reserve
Merger reserve
Retained earnings
Total
Other undenominated capital
31 December
2023
31 December
2022
$’000
$’000
523,646
472,723
1,162
1,162
354,183
381,098
10,183
7,601
(148,844)
(175,065)
5,656,195
5,656,195
2,919,591
2,219,619
9,316,116
8,563,333
Other undenominated capital comprises the nominal value of shares repurchased and cancelled by the Company and
transferred from share capital to other undenominated capital as required under Irish Company Law. During the year ended
31 December 2023, nil ordinary shares were repurchased and cancelled by the Group (2022: 420,530).
Share-based payment reserve
The share-based payment reserve is used to account for share-based payments. The fair value of share-based payments is
expensed to the Consolidated Statement of Profit and Loss over their respective period the related services are received,
with a corresponding increase in equity. Details of options, RSU's and PSU's granted under their respective plans and the
terms attaching thereto are provided in note 12 to the financial statements.
Other reserves
The Group has recognised a non-distributable reserve of $6.2 million in accordance with agreements made between the
Group and Enterprise Ireland, an Irish government agency. The requirement for these non-distributable reserves will expire
between the period 2025 and 2028. In addition, in 2005 the Group also recognised a capital contribution of $6.1 million
being the fair value of outstanding ordinary shares transferred to Mr Peter Gray, formerly Vice Chair of the Board of
Directors and formerly Chief Executive Officer, by founding Directors, Dr. John Climax and Dr. Ronan Lambe.
The Group entered into two interest rate cap agreements and an interest rate swap agreement to limit its exposure to
changes in the variable interest rate on its Senior Secured Credit Facilities. The interest rate caps and swap are accounted
for as cash flow hedges and were considered effective hedges on application of the provisions of IFRS 9. The effective
portion of the hedges for the year ended 31 December 2023 is recorded as a movement of $1.6 million (31 December 2022:
$3.7 million) within Other Reserves.
Foreign currency reserve
The currency reserve comprises all foreign exchange differences arising from the translation of the financial statements of
foreign currency denominated operations of the Group. As at 31 December 2023, this amounted to a cumulative loss of
$148.8 million (2022: loss of $175.1 million).
106
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
25. Capital and reserves (continued)
Merger reserve
On 1 July 2021, the Company completed the Acquisition of PRA by means of a merger whereby Indigo Merger Sub, Inc., a
Delaware corporation and subsidiary of the Company, merged with and into PRA, the parent of the PRA Health Sciences
Group. Upon completion of the Merger, pursuant to the terms of the Merger Agreement, PRA became a wholly owned
subsidiary of the Company. The transaction resulted in the issuance of 27,372,427 shares to the former stockholders of
PRA. The Company issued these shares at the prevailing market price and recognised the premium of $5,656.2 million on
issuance of these shares as a merger reserve as required under Irish Company Law.
Retained earnings
In addition to the profit for the financial year the Group has also recognised the re-measurement of the defined benefit
pension scheme in this reserve. In 2023, the Group recognised a re-measurement gain on the defined benefit pension
scheme of $0.5 million (31 December 2022: a re-measurement gain of $13.3 million). The Group has recognised a credit of
$91.5 million (2022: credit of $71.7 million) in respect of exercised and expired share-based awards that have been
transferred from the share-based payment reserve.
A resolution was passed at the Company’s Annual General Meeting (“AGM”) on July 22, 2016, which authorised the
Directors to purchase (buyback) up to 10% of the outstanding shares in the Company. This resolution has been renewed
annually thereafter. On February 18, 2022, the Company commenced a share buyback program which was fully complete
at 31 March 2022. Under this buyback program, 420,530 ordinary shares were redeemed by the Company for total
consideration of $100.0 million.
26. Financial instruments
The Board of Directors have overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Group is exposed to various financial risks in the normal course of its business. The principal financial risks
to which it is exposed include credit risks related to the creditworthiness of its customers and counterparties, with which it
invests surplus cash funds, liquidity risk associated with the availability of sufficient financial resources to meet liabilities as
they fall due, foreign currency risks, including both translation and transaction risk, and interest rate risk.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations. The Audit Committee of the Board oversees how management monitors
compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to the risks faced by the Group.
Credit risk
Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at fair value through
other comprehensive income and at fair value through profit or loss, favourable derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to customers, including outstanding accounts receivable,
unbilled receivables and other receivables.
Credit risk is managed on a group basis. The ratings required for banks and financial institutions are a minimum rating of
BBB+ for overnight maturities and a minimum of A- for any bank deposits greater than overnight and up to three months.
Current asset investments (recorded at fair value through other comprehensive income) comprise investments with
maturities of greater than three months. The minimum ratings required for investment are as follows: bank deposits (A-),
money market funds (AAA), liquidity funds (AAA) and fixed rate corporate bonds or floating rate notes (A- non-financial, AA-
financial).
The Group’s exposure to credit risk arises predominately in respect of the credit risk assessment of customers. Customer
credit risk is managed through application of credit procedures, in particular through risk assessment of new customers,
through assessment of credit quality, taking into account their financial position, past experience and other factors. The
compliance with credit terms is regularly monitored by line management.
Contract terms may range from several weeks to several years depending on the nature of the work to be performed.
Contracts are generally fixed price or unit based. In most cases, a portion of the contract fee is paid at the time the study or
trial is started. The balance of the contract fee is generally billable in instalments over the study or trial duration and may be
based on the delivery of certain performance targets or "milestones" or based on units delivered, or on a fixed monthly
payment schedule such as patient enrolment or database delivery.
107 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
26. Financial instruments (continued)
Where customers request changes in the scope of a trial or in the services to be provided, a change order or amendment is
issued which may result either in an increase or decrease in the contract value. The Group also contracts on a "fee-for-
service" or "time and materials" basis.
During the course of a study, the Group will generally incur reimbursable expenses. Reimbursable expenses are typically
estimated and budgeted within the contract and are generally invoiced on a monthly basis based on actual expenses
incurred. Reimbursable expenses include payments to investigators, travel and accommodation costs and various other
expenses incurred over the course of the clinical trial which are fully reimbursable by the client.
Most of the Group’s contracts are terminable immediately by the customer with justifiable cause or with 30 to 90 days' notice
without cause. In the event of termination, the Group is usually entitled to all sums owed for work performed through the
notice of termination and certain costs associated with termination of the study. Termination or delay in the performance of a
contract occurs for various reasons, including, but not limited to, unexpected or undesired results, production problems
resulting in shortages of the drug, adverse patient reactions to the drug, the client's decision to de-emphasise a particular
trial, inadequate patient enrolment or investigator recruitment.
The Group’s top five customers accounted for approximately 26.8% and 28.3% of revenue during the years ended
31 December 2023 and 31 December 2022 respectively. During the year ended 31 December 2023, 8.9% of the Group’s
revenues were derived from its top customer (2022: 8.8%). The addition of new customer accounts, particularly large and
mid-tier pharma customers and biotech customers have resulted in a reduction in the concentration of revenues from our
top five customers.
The maximum exposure of credit risk pertaining to customers is the carrying value of accounts receivable and unbilled
revenue balances. The gross value of accounts receivable and unbilled revenue balances, by geographic region, at
31 December 2023 was as follows:
Europe
United States
Rest of World
Gross balance
Allowance for for credit losses
Accounts Receivable
Unbilled Revenue
31 December
2023
31 December
2022
31 December
2023
31 December
2022
$’000
$’000
$’000
1,184,454
1,024,777
402,797
566,497
690,465
472,368
70,904
36,708
76,771
1,821,855
1,751,950
951,936
(31,533)
(20,562)
—
$’000
380,932
468,304
108,419
957,655
—
Total, net of allowance for credit losses
1,790,322
1,731,388
951,936
957,655
The Group has four types of financial assets that are subject to the expected credit loss model:
•
•
•
•
trade receivables (billed amounts) for services provided to customers
unbilled receivables (contract assets) for services provided to customers
other receivables
cash and cash equivalents
Trade receivables, contract assets and other receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit
risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the
same risk characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that
the expected loss rates for trade receivables are a reasonable approximation for the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of revenue over a period of 36 months before 31 December
2023. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle receivables. The group has identified the GDP and the unemployment rate of
the countries in which it sells its services to be the most relevant factors, and accordingly adjusts the historical loss rates
based on expected changes in these factors. See note 17 - Accounts receivable, unbilled services (contract assets) and
unearned revenue (contract liabilities) for assessment of the allowance for credit losses for both trade receivables and
contract assets.
108
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
26. Financial instruments (continued)
Trade receivables, other receivables and contract assets are written off when there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to
engage in a repayment plan with the group, and a failure to make contractual payments for a period of greater than 120
days past due. Impairment losses on trade receivables, other receivables and contract assets are presented as net
impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the
same line item.
Liquid and capital resources
The Group’s liquid and capital resources at 31 December 2023 were as follows:
Current asset investments (note 19)
Cash and cash equivalents (note 20)
Total liquid resources
Shareholders’ equity
31 December
2023
$’000
31 December
2022
$’000
1,954
378,102
380,056
1,713
288,768
290,481
9,322,815
8,569,982
The principal operating cash requirements of the Group include payment of salaries, office rents, travel expenditures and
payments to investigators. Other cash requirements include capital expenditures for facilities and information system
enhancements and cash required to fund acquisitions and other growth opportunities. The CRO industry is generally not
capital intensive. The Group primarily finances its operations and growth through cash flows from operations, together with
amounts drawn under negotiated facilities as required.
The Group’s primary objectives in managing its liquid and capital resources are as follows:
•
•
•
to maintain adequate resources to fund its continued operations,
to ensure availability of sufficient resources to sustain future development and growth of the business,
to maintain sufficient resources to mitigate risks and unforeseen events which may arise.
The Group manages risks associated with liquid and capital resources through ongoing monitoring of actual and forecast
cash balances and by reviewing the existing and future cash requirements of the business. It ensures that sufficient
headroom is available under the Group’s existing negotiated facilities and negotiates additional facilities as required. Details
of the Group’s negotiated facilities are set out in note 23 Bank credit lines and loan facilities.
In conjunction with the completion of the Merger Agreement, on 1 July 2021, ICON entered into a credit agreement
providing for a senior secured term loan facility of $5,515 million and a senior secured revolving loan facility in an initial
aggregate principal amount of $300 million (the "Senior Secured Credit Facilities"). The Senior Secured Credit Facility and
Senior Secured Notes were issued at a discount of $27.6 million. On 2 May 2023, the Company agreed with its lenders to
increase the aggregate principal amount of the senior secured revolving loan facility from $300 million to $500 million.
Borrowings under the senior secured term loan facility amortise in equal quarterly instalments in an amount equal to 1.00%
per annum of the principal amount, with the remaining balance due at final maturity. The interest rate margin applicable to
borrowings under the senior secured term loan facility is USD Term SOFR and a Term SOFR Adjustment depending on the
interest period chosen plus an applicable margin which is dependent on the Company's net leverage ratio. As of 31
December 2023, the applicable margin is 2.25%. The senior secured term loan facility is subject to a floor of 0.50%.
The interest rate margin applicable to borrowings under the revolving loan facility will be, at the option of the borrower, either
(i) the applicable base rate plus an applicable margin of 1.00%, 0.60% or 0.25% based on ICON’s current corporate family
rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively, or (ii) Term SOFR plus a Term SOFR
Adjustment on the interest period chosen plus an applicable margin of 2.00%, 1.60% or 1.25% based on ICON’s current
corporate family rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively. In addition, lenders under the
revolving loan facility are entitled to commitment fees as a percentage of the applicable margin at the time of drawing and
utilisation fees dependent on the proportion of the facility drawn. As at 31 December 2023, $445.0 million remained undrawn
under the senior secured revolving loan facility.
The Borrowers' (as defined in the Senior Secured Credit Facility) obligations under the Senior Secured Credit Facilities are
guaranteed by ICON and the subsidiary guarantors. The Senior Secured Credit Facilities are secured by a lien on
substantially all of ICON’s, the Borrowers' and each of the subsidiary guarantor’s assets (subject to certain exceptions), and
the Senior Secured Credit Facilities will have a first-priority lien on such assets, which will rank pari passu with the lien
109
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
26. Financial instruments (continued)
securing the Senior Secured Notes, subject to other permitted liens. The Company is permitted to make prepayments on the
senior secured term loan without penalty.
In addition to the Senior Secured Credit Facilities, on 1 July 2021, a subsidiary of the Company issued $500 million in
aggregate principal amount of 2.875% senior secured notes due 2026 in a private offering (the “Offering”). The Senior
Secured Notes will mature on July 15, 2026.
The following table sets out details of the maturity of the Group’s financial liabilities into the relevant maturity groupings
based on the remaining period from the financial year end date to contractual maturity date:
Year ended 31 December 2023
Carrying
amount
Contractual
cash flows
Less than
1 year
1-2 years
2-5 years
Bank credit lines and loan facilities
(3,775,589) (3,806,213)
$’000
$’000
$’000
(110,150)
$’000
$’000
(55,150) (3,640,913)
Interest on bank credit lines and loan
facilities
(8,758) (1,179,097)
(272,501)
(267,396)
(639,200)
More than
5 years
$’000
—
—
Lease liabilities
(162,735)
(176,926)
(40,894)
(34,585)
(67,449)
(33,998)
Non-current other liabilities*
(28,358)
(28,358)
—
Accounts payable
(131,584)
(131,584)
(131,584)
Accrued and other liabilities**
(865,233)
(865,233)
(865,233)
—
—
—
—
—
—
(28,358)
—
—
(4,972,257) (6,187,411) (1,420,362)
(357,131) (4,347,562)
(62,356)
Year ended 31 December 2022
Carrying
amount
Contractual
cash flows
Less than
1 year
1-2 years
2-5 years
More than
5 years
$’000
$’000
$’000
$’000
$’000
$’000
Bank credit lines and loan facilities
(4,654,187) (4,701,213)
(55,150)
(55,150)
(665,450) (3,925,463)
Interest on bank credit lines and loan
facilities
(8,334) (1,677,091)
(314,947)
(311,799)
(887,590)
(162,755)
Lease liabilities
(175,300)
(189,668)
(47,479)
(34,400)
(62,724)
(45,065)
Non-current other liabilities*
(23,604)
(23,604)
—
Accounts payable
(81,194)
(81,194)
(81,194)
Accrued and other liabilities**
(947,480)
(947,480)
(947,480)
—
—
—
—
—
—
(23,604)
—
—
(5,890,099) (7,620,250) (1,446,250)
(401,349) (1,615,764) (4,156,887)
*Non-current other liabilities above excludes retirement plan net benefit obligation (2023: $14.7 million and 2022: $13.0
million) and deferred government grants (2023: $0.9 million and 2022: $1.1 million).
**Accrued and other liabilities excludes interest on senior notes presented separately above, deferred government grants
(2023: $0.04 million and 2022: $0.04 million) and current lease liabilities (2023: $36.4 million and 2022: $43.7 million).
Foreign currency risk
The Group is subject to a number of foreign currency risks given the global nature of its operations. The principal foreign
currency risks to which the business is subject includes both foreign currency translation risk and foreign currency
transaction risk. Although domiciled in Ireland, the Group presents its results in U.S. dollars. As a consequence, the results
of non-U.S. based operations, when translated into U.S. dollars, could be affected by fluctuations in exchange rates
between the U.S. dollar and the currencies of those operations.
The Group is also subject to foreign currency transaction exposure as the currency in which contracts are priced can be
different from the currencies in which costs relating to those contracts are incurred. The Group’s operations in the United
States are not materially exposed to such currency differences as the majority of revenues and costs are in U.S. dollars.
However, outside the United States the multinational nature of the Group’s activities means that contracts are usually priced
in a single currency, most often U.S. dollars, Euros or pounds Sterling, while costs arise in a number of currencies,
depending on, among other things, which of the Group’s offices provide staff for the contract and the location of investigator
sites.
110
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
26. Financial instruments (continued)
Although many such contracts benefit from some degree of natural hedging due to the matching of contract revenues and
costs in the same currency, where costs are incurred in currencies other than those in which contracts are priced,
fluctuations in the relative value of those currencies could have a material effect on the results of the Group’s operations.
The Group regularly reviews its foreign currency exposures and usually negotiates currency fluctuation clauses in its
contracts which allow for price negotiation if certain exchange rate triggers occur.
The following significant exchange rates applied during the year:
Euro:US Dollar
Pound Sterling: US Dollar
Average Rate
Closing Rate
2023
1.0795
1.2382
2022
1.0512
1.2347
2023
1.1039
1.2731
2022
1.0705
1.2083
A simultaneous ten percent strengthening or weakening of the US Dollar, Euro and Sterling against all other currencies
(which remained constant) would have increased or decreased profit by $104.4 million, $25.0 million and $72.1 million
respectively (31 December 2022: $37.2 million, $19.6 million and $22.1 million respectively) as a consequence of the
retranslation of foreign currency denominated financial assets and liabilities at those dates. This change in profit is excluding
the effect of foreign currency denominated long term loans.
Interest rate risk
The Group is exposed to interest rate risk in respect of our cash and cash equivalents and available for sale investments.
Our treasury function actively manages our available cash resources and invests significant cash balances to ensure
optimum returns for the Company. Financial instruments are classified either as cash and cash equivalents or current asset
investments depending upon the maturity of the related investment. Funds may be invested in the form of floating rate notes
and medium term minimum “A-” rated corporate securities. We may be subject to interest rate risk in respect of interest rate
changes on amounts invested. Interest rate risk is managed by monitoring the composition of the Company’s investment
portfolio on an ongoing basis having regard to current market interest rates and future trends.
In conjunction with the completion of the Merger, on 1 July 2021, ICON entered into a credit agreement providing for a
senior secured term loan facility of $5,515 million and a senior secured revolving loan facility in an initial aggregate principal
amount of $300 million (the "Senior Secured Credit Facilities"). As of 31 December 2023, $2,264 million of the senior
secured term loan facility has been repaid from cash generated by the Company in the period since the completion of the
Merger. On 2 May 2023, the Company agreed with its lenders to increase the aggregate principal amount of the senior
secured revolving loan facility from $300 million to $500 million.
As at the 31 December 2023, the outstanding principal amount of the Senior Secured Term Loan Facility was $3,251 million.
The applicable interest rate for the next quarterly interest period is expected to be 7.860% Borrowings under the Senior
Secured Term Loan facility amortise in equal quarterly instalments in an amount equal to 1.00% per annum of the principal
amount, with the remaining balance due at final maturity. The interest rate margin applicable to borrowings under the senior
secured term loan facility is USD Term SOFR and a Term SOFR Adjustment depending on the interest period chosen plus
an applicable margin of 2.25%. The Senior Secured Term Loan Facility is subject to a floor of 0.50%.
In addition to the Senior Secured Facilities, on 1 July 2021, the Company issued $500 million in aggregate principal senior
notes in a private offering. The Senior Secured Notes will mature in July 2026 and pay a fixed semi annual coupon to
investors of 2.875% per annum. This debt is not subject to movements in interest rate conditions.
We regularly evaluate our debt arrangements, as well as market conditions, and we will explore the opportunity to modify
our existing arrangements or pursue additional financing arrangements that may result in the issuance of new debt
securities by us or our affiliates.
The sensitivity analysis below represents the hypothetical change in the interest income and interest expense of a 1%
movement in market interest rates.
As reported
1% Increase
1% Decrease
*Interest expense excludes interest on lease liabilities.
Interest Income
Interest Expense*
2023
$’000
5,014
8,073
1,953
2022
$’000
2,345
8,322
2023
$’000
336,699
376,036
1
297,362
2022
$’000
229,731
277,546
181,982
111
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
26. Financial instruments (continued)
Derivatives
The Company has entered into interest rate cap and swap agreements for purposes of managing its exposure to interest
rate fluctuations. These financial derivative agreements are designated as Cash Flow Hedges.
On 29 November 2022, the Company entered into two interest rate cap agreements ("2022 Caps") with an initial total
notional value of $2,101 million to limit its exposure to changes in the variable interest rate on its Senior Secured Credit
Facilities. Interest on the 2022 Caps began accruing on 30 December 2022 and the interest rate cap expires on 31
December 2024. The Company pays a fixed rate of 0.42% and receives a variable rate equal to the amount that the three-
month SOFR rate exceeds 4.75%.
On 29 November 2022, the Company entered into an interest rate swap agreement ("2022 Swap") with an initial notional
value of $1,101 million to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities.
Interest on the 2022 Swap begins accruing on 31 December 2024 and the interest rate swap expires on 30 September
2026. The Company will pay a fixed rate of 3.4% and receive a variable rate of interest equal to the three-month SOFR on
the 2022 Swap.
The critical terms of the caps and swap are substantially the same as the underlying borrowings. The interest rate caps and
swap are accounted for as cash flow hedges as these transactions were executed to hedge the Company's interest
payments and for accounting purposes are considered highly effective. As such, the effective portion of the hedges is
recorded as unrealised gains/(losses) on derivatives in Other Reserves.
The fair value of these cash flow hedges represents the present value of the anticipated net payments the Company will
make to the counterparty, which, when they occur, are reflected as interest expense in the consolidated statement of
income.
The fair values of the Company’s derivative financial instruments, on a gross basis, are summarized in the following table:
31 December 2023
31 December 2022
Asset
$'000
Liability
Notional
$'000
$'000
Asset
$'000
Liability
Notional
$'000
$'000
Derivatives designated as hedging instruments:
Interest Rate Caps
Interest Rate Swap
Total derivatives designated as hedging
instruments
—
—
—
1,871 1,600,606
540 1,100,606
12
—
3,363 2,100,606
307 1,100,606
2,411 2,701,212
12
3,670 3,201,212
As of 31 December 2023, the Company recognised a current derivative liability of $1.9 million within other liabilities (2022:
$3.3 million within other liabilities and $0.01 million within other receivables) and a non current derivative liability of $0.5
million (2022: $0.4 million) within non-current other liabilities.
During the year ended 31 December 2023, the Company recognised a gain of $1.6 million within the Statement of
Comprehensive Income (2022: $3.7 million loss) after a reclassification of $2.4 million from Other Reserves to the
Statement of Profit and Loss (2022: $0.1 million).
During 2024, the Company estimates that an additional $3.2 million million will be reflected as interest expense in the
Consolidated Statement of Profit and Loss.
Fair values
Certain financial instruments are measured in the Statement of Financial Position at fair value using a fair value hierarchy of
valuation inputs. The fair value of financial assets together with the carrying amounts shown in the Statement of Financial
Position is as follows:
112
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
26. Financial instruments (continued)
31 December 2023
31 December 2022
Carrying
Amount
Level 1
Level 2
Level 3
Carrying
Amount
Level 1
Level 2
Level 3
$’000
$’000
$’000
$'000
$’000
$’000
$’000
$’000
Financial assets measured at fair value
Financial assets at fair value
through other comprehensive
income
Financial assets at fair value
through profit and loss
Derivative instruments at fair
value through other
comprehensive income
Total Assets
1,954
1,954
—
—
1,713
1,713
—
—
46,804
—
— 46,804 32,631
—
— 32,631
—
—
—
—
12
—
12
—
48,758
1,954
— 46,804 34,356
1,713
12 32,631
Financial liabilities measured at fair value
Derivative instruments at fair
value through other
comprehensive income
Total Liabilities
(2,411)
—
(2,411)
—
(3,670)
—
(3,670)
(2,411)
—
(2,411)
—
(3,670)
—
(3,670)
—
—
The carrying values of accounts receivable (less provision for loss), unbilled revenue (contract assets), other current assets,
cash and cash equivalents and other non-current assets are carried at amortised cost and assumed to be approximate to
their fair values due to the short-term nature of these balances. As such their fair values have not been disclosed.
Current asset investments carried at fair value result in gains or losses being recognised in the Consolidated Statement of
Comprehensive Income. The fair value of current asset investments is their market price at the financial year end date. They
are measured on the basis of Level 1 inputs.
Long-term financial assets carried at fair value result in gains or losses being recognised in the Consolidated Statement of
Profit and Loss. The fair value of long-term financial assets meet the definition of equity securities without readily
determinable fair values and are measured on the basis of level 3 inputs as the funds are not traded on an exchange and
data is not published in respect of the funds. The valuation model is based on the net asset value of the fund as prepared by
an independent appraiser.
The carrying values of accounts payable, accrued and other liabilities and provisions and other non-current liabilities are
carried at amortised cost and assumed to be approximate to their fair values.
Each category of asset and liability has remained within the same level of hierarchy as the prior year as there has been no
change in the extent to which the inputs used in measuring fair value are or are not observable within the market.
The following table shows reconciliation from the opening balances to the closing balances for Level 3 fair values:
Opening balance
Additions/(payments) made during the year
Increase in fair value
Closing balance
31 December
2023
31 December
2022
$’000
32,631
13,954
219
$’000
22,592
5,612
4,427
46,804
32,631
There have been no transfers between level 1/2 financial instruments and level 3 financial instruments during the current or
prior financial year.
113
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
27. Leases
Right-of-use assets
The Group has recorded the following for right-of-use assets:
Depreciation charge for 2023
Right-of-use assets at 31 December 2023
Depreciation charge for 2022
Right-of-use assets at 31 December 2022
Premises
Equipment
$'000
$'000
Motor
vehicles
$'000
Total
$'000
38,728
123,378
42,847
137,519
200
444
207
3,054
41,982
13,442
137,264
2,161
45,215
1,194
12,486
151,199
Additions to right-of-use assets during 2023, net of early termination options now reasonably certain to be exercised, were
$37.7 million (2022: $28.7 million).
The weighted average remaining lease term at 31 December 2023 was 6.72 years (2022: 6.90 years).
During the year ended 31 December 2023, as a result of office consolidations, certain ROU assets have been impaired to
the extent they are considered onerous and an impairment loss of $8.7 million was recorded (2022: $24.5 million). See note
9 Exceptional items.
Lease liabilities
Set out below are the carrying amounts of lease liabilities at each reporting date. Current lease liabilities have been included
in accrued and other liabilities on the balance sheet.
Current
Non-Current
Total
31 December
2023
31 December
2022
$’000
36,414
$’000
43,656
126,321
131,644
162,735
175,300
Total lease payments for the year ended 31 December 2023 were $53.8 million (2022: $54.6 million).
Future minimum lease payments under non-cancelable leases as of 31 December 2023 were as follows:
2024
2025
2026
2027
2028
Thereafter
Total future minimum lease payments
Lease imputed interest
Total
31 December
2023
$'000
40,894
34,585
29,172
23,254
15,023
33,998
176,926
(14,191)
162,735
114
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
27. Leases (continued)
Amounts recognised in profit or loss
The following amounts were recognised in profit and loss:
Depreciation of right-of-use assets
Interest on lease liabilities
31 December
2023
31 December
2022
$'000
41,982
4,172
$'000
45,215
4,470
Of the total cost of $46.2 million incurred in the year ended 31 December 2023, $34.9 million is recorded within other
operating expenses, $7.1 million is recorded within direct costs and $4.2 million is recorded within financing expense. During
2023, the Group had income from sub-leases of $1.1 million.
Of the total cost of $49.7 million incurred in the year ended 31 December 2022, $41.6 million is recorded within other
operating expenses, $3.6 million is recorded within direct costs and $4.5 million is recorded within financing expense. During
2022, the Group had income from sub-leases of $1.2 million.
During the year ended 31 December 2023 and the year ended 31 December 2022, the Group did not incur any costs related
to variable lease payments or short-term leases.
28. Commitments and contingencies
a) Capital commitments
The following capital commitments for the purchase of property, plant, equipment and computer software were authorised by
the Group at 31 December 2023 and 31 December 2022:
Contracted for
Total
(b) Contractual obligations
31 December
2023
31 December
2022
$’000
101,653
101,653
$’000
86,478
86,478
The following represents Group contractual obligations and commercial commitments as at 31 December 2023:
Capital commitments
Total contractual obligations
Payments due by period
Total
$’000
101,653
101,653
Less than
1 year
$’000
93,256
93,256
1 to 5
years
$’000
8,397
8,397
More than
5 years
$’000
—
—
The Group expects to spend between $150 million to $200 million in the next 12 months on further investments in
information technology comprising both capital authorised and contracted and capital authorised and not contracted. The
Group believes that it will be able to fund additional foreseeable cash needs for the next twelve months from cash flow from
operations and existing cash balances. In the future, the Group may consider acquiring businesses to enhance service
offerings and global presence. Any such acquisitions may require additional external financing and the Group may, from time
to time, seek to obtain funds from public or private issues of equity or debt securities. There can be no assurance that such
financing will be available on terms acceptable to the Group.
115
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
28. Commitments and contingencies (continued)
The Company entered into subscription agreements with a number of funds (see note 19 Financial asset investments).
During the year ended 31 December 2023, capital totalling $14.0 million had been advanced under the terms of the
subscription agreements (2022: $3.7 million). The Company had committed to future investments of $66.4 million in respect
of these funds. The timing of the commitment is not specified in the subscription agreements.
(c) Guarantees
(i) Guarantees in respect of borrowings of subsidiaries
ICON plc and certain other subsidiaries within the Group have guaranteed the Senior Secured Credit Facilities and Senior
Secured Notes as set out in note 23 Bank credit lines and loan facilities. The Group does not expect any material loss to
arise from these guarantees.
(ii) Section 357 Guarantees
The Company has guaranteed all of the commitments and liabilities referred to in Section 357(1) (b) of the Companies Act in
respect of the whole of the financial year ending 31 December 2023 for the subsidiary companies listed below. These
subsidiaries are availing of the exemption under Section 357 of the Companies Act not to file statutory financial statements.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
ICON Clinical Research Limited
DOCS Resourcing Limited
ICON Holdings Unlimited Company
ICON Clinical Research Property Holdings (Ireland) Limited
ICON Clinical Research Property Development (Ireland) Limited
ICON Holdings Clinical Research International Limited
ICON Clinical International Unlimited Company
ICON Investments Four Unlimited Company
Accellacare Limited
ICON Global Treasury Unlimited Company
ICON Clinical Global Holdings Unlimited Company
ICON Operational Financing Unlimited Company
ICON Operational Holdings Unlimited Company
Research Pharmaceutical Services (Outsourcing Ireland) Limited
ICON Clinical Research Holdings (Ireland) Unlimited Company
Oncacare Limited
29. Litigation
The Group is not party to any litigation or legal proceedings that the Group believes could reasonably be expected to have a
material adverse effect on the Group’s business, results of operations and financial position. However, from time to time, we
may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is
subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm
our business.
116 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
30. Related parties
(i) Transactions with Directors and Executive Officers
The total compensation of the Directors and Executive Officers (key management remuneration) for the years ended
31 December 2023 and 2022 was as follows:
Salary and fees
Bonus
Other benefits
Pension contributions
Share-based payment expense
Total
31 December
2023
31 December
2022
$’000
2,891
1,578
62
198
8,583
13,312
$’000
3,078
1,515
61
195
10,496
15,345
Details of ordinary shares, share options, RSUs and PSUs held by the Directors and Executive Officers and details of
transactions entered into by Directors and Key Executive Officers in shares and share options of the Company during the
year ended 31 December 2023 are set out in note 10 Payroll and related benefits.
(ii) Other related party transactions
Subsidiaries of the Company earned revenue of $243,000 (31 December 2022: $428,000) from Corvus Pharmaceuticals
during the year. Dr. Linda Grais serves as a Director and shareholder of Corvus Pharmaceuticals. $101,000 (31 December
2022: $231,000) was noted as due from Corvus Pharmaceuticals at 31 December 2023.
Subsidiaries of the Company earned revenue of $45,000 (31 December 2022: $235,000) from Afimmune Limited during the
year. Dr. John Climax is Chief Executive Officer and a Director and shareholder of Afimmune Limited. $47,000 was noted as
due from Afimmune Limited at 31 December 2023 (31 December 2022: $263,000).
On 24 July 2020, a subsidiary of the Company, ICON Clinical Research Limited, entered into an agreement to jointly
establish a new company, Oncacare Limited ("Oncacare"), a specialised oncology site network in the US and EMEA
regions, with a third party. The Company invested $4.9 million to obtain a 49% interest in the voting share capital of
Oncacare. On 20 April 2023, the Company completed the purchase of the majority investor’s 51% majority voting share
capital of Oncacare. The consideration paid by ICON to purchase the 51% majority voting share capital was $5.1 million. As
a result of this transaction (the "Oncacare acquisition"), Oncacare and its subsidiaries became wholly owned subsidiaries of
the ICON Group. Prior to the Oncacare acquisition, the Company recorded losses of $0.4 million and $3.1 million
representing its pro rata share of the losses in Oncacare during the year ended 31 December 2023 and 31 December 2022,
respectively. The Oncacare acquisition also resulted in goodwill of $13.4 million and gave rise to an acquisition-related gain
of $6.2 million.
31. Subsequent events
The Company has evaluated subsequent events from the Balance Sheet date through 23 April 2024, the date at which the
consolidated financial statements were available to be issued.
On 20 February 2024, the Company's Board of Directors authorised a new buyback program of up to $500 million of the
outstanding ordinary shares of the Company. All ordinary shares that are redeemed under the buyback program will be
cancelled in accordance with the constitutional documents of the Company and the nominal value of these shares
transferred to an undenominated capital fund as required under Irish Company law. Repurchases under the share buyback
program may be effected from time to time in open market or privately negotiated transactions in accordance with agreed
terms and limitations. The timing and amount of the repurchase transactions under this program will depend on a variety of
factors, including market conditions and corporate and regulatory considerations. Depending upon results of operations,
market conditions and the development of the economy, as well as other factors, generally we will consider share
repurchases on an opportunistic basis from time to time.
The Company has determined that there are no other items to disclose.
117
Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings
As at 31 December 2023 the Group had the following principal subsidiary undertakings:
Name
Registered Office**********
ICON Clinical Research S.A.
ICON Clinical Research PTY Limited
Medpass International Pty Ltd
ICON Clinical Research Austria GmbH
DOCS International Belgium N.V.**
ICON Pesquisas Clínicas LTDA.
ICON Clinical Research EOOD
ICON Clinical Research (Canada) Inc.
Oxford Outcomes LTD.
ICON Life Sciences Canada Inc.
ICON Chile Limitada
ICON Clinical Research (Beijing No.2) Co.,
Ltd
ICON Clinical Research (Beijing) Co., Ltd
Cecilia Grierson 255, Floor 6°
City of Buenos Aires
C1107CPE
Argentina
Suite 201,
Level 2, 2-4 Lyon Park Road,
North Ryde,
NSW 2113
Australia
Level 2,
Pier 8, Shop 9,
23 Hickson Road,
Millers Point,
NSW 2000
Australia
Pyrkergasse 10/6
1190 Vienna
Austria
E19 Business Park
Battelsesteenweg 455D
2800 Mechelen, Belgium
Av. Ibirapuera 2332,
Torre II 4º Andar,
São Paulo, SP,
Brazil,
CEP 04028-003
2A, Saborna Str.,
4th floor, Sofia – 1000,
Republic of Bulgaria
7405 Trans-Canada Highway,
Suite 300 Saint-Laurent,
Quebec, H4T 1Z2
Canada
19th Floor
885 West Georgia Street
Vancouver BC V6C 3H4
Canada
3455 North Service Road
Unit #400
Burlington ON L7N 3G2
Canada
Avenida Mariano Sánchez
Fontecilla 310
Las Condes
Santiago
Región Metropolitana
7550296
Chile
Floor 2, Building 5,
Hongda Industrial park,
No. 8, Hongda North Road,
Beijing Economic-Technological
Development Area,
Beijing
Floor 1
Building No. 5,
No. 8 Hongda North Road,
Beijing Economic-Technologies
Developement Zone,
Beijing, China
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%*
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
118 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
ICON Clinical Research s.r.o.
DOCS International Nordic Countries A/S
DOCS International Finland Oy
ICON Clinical Research S.A.R.L.
Mapi Research Trust***
ICON Clinical Research Germany GmbH
ICON Clinical Research Hong Kong
Limited
Accellacare Limited
DOCS Resourcing Limited
ICON (LR) Limited
ICON Clinical Global Holdings Unlimited
Company
ICON Clinical International Unlimited
Company
ICON Clinical Research Limited
ICON Clinical Research Property
Development (Ireland) Limited
ICON Clinical Research Property Holdings
(Ireland) Limited
V parku 2335/20,
Praha 4 - Chodov,
PSČ 148 00
Czech Republic
c/o BuusMark Advokater
Sankt Ols Gade 4
4000 Roskilde
Denmark
Mannerheimintie 12B,
00100 Helsinki
Finland
55 Avenue des Champs
Pierreux
Immeuble le Capitole
92000 Nanterre
France
27 rue de la Villette,
69003 Lyon,
France
Heinrich-Hertz-Straße 26
63225
Langen
Hessen
Germany
Unit 4333 & 4335C, 43/F
AIA Tower
183 Electric Road
North Point
Hong Kong
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Ireland
South County Business Park,
Leopardstown,
Dublin 18
Ireland
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Ireland
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Investment holding
company
100%*
Holding company
100%
Clinical research
services
100%
Property
management
company
Property
management
company
100%
100%*
119 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
ICON Holdings Clinical Research
International Limited
ICON Holdings Unlimited Company
ICON Investments Five Unlimited
Company
ICON Investments Four Unlimited
Company
ICON Operational Financing Unlimited
Company
ICON Operational Holdings Unlimited
Company
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Ireland
South County Business Park,
Leopardstown,
Dublin 18
Republic of Ireland
South County Business Park,
Leopardstown,
Dublin 18
Ireland
South County Business Park,
Leopardstown,
Dublin 18
Ireland
ICON Global Treasury Unlimited Company South County Business Park,
Leopardstown,
Dublin 18,
Ireland
Nature of
business
Proportion held by
Group
Investment holding
company
100%
Investment holding
company
100%
Investment holding
and financing
company
100%*
Investment holding
and financing
company
100%
Investment holding
and financing
company
100%
Investment holding
company
100%
Investment holding
and financing
company
100%
ICON Clinical Research Israel LTD.
Building E, 13th Floor
4 Haharash Street
Hod Hasharon 4524402 Israel
Clinical research
services
100%
ICON Investments Limited
ICON Luxembourg S.à r.l.
ICON CRO Malaysia SDN. BHD.
ICON Clinical Research México, S.A. de
C.V.
DOCS International B.V. ****
ICON Clinical Research (New Zealand)
Limited
ICON Clinical Research Perú S.A.
22 Grenville Street
St Helier
JE4 8PX
Jersey
61, rue de Rollingergrund
L-2440 Luxembourg
Level 11
1 Sentral
Jalan Rakyat
Kuala Lumpur Sentral
50470 Kuala Lumpur
Malaysia
Av. Barranca del Muerto
329 3rd Floor
Col. San Jose Insugentes
03900 Mexico D.F.
Boeing Avenue 62-68
1119PE Schiphol-Rij
The Netherlands
Level 33, 29 Albert Street,
Auckland Central,
New Zealand.
Av. Paseo de la República 5895
Oficina 606
Miraflores
Lima 18
Perú
Investment holding
company
100%*
Holding and
Investment
Company
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
120 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
ICON Clinical Research Services
Philippines, Inc.
ICON Clinical Research S.R.L.
ICON Clinical Research (Rus) LLC
ICON Clinical Research (Pte) Limited
Mapi Life Sciences Singapore Pte. Ltd.
ICON Clinical Research Slovakia, s.r.o.
Accellacare South Africa (PTY) LTD
ICON Clinical Research España, S.L.
Accellacare España S.L.
24th Floor Salcedo Towers,
169 H.V. Dela Costa Street,
Salcedo Village,
Makati City,
Philippines 1227
8th Floor,
246c Caleca Floresca, Sector 1,
Bucharest 14476
Romania
Premises 2/4, 9 Zemlyanoy Val,
Moscow, 105064,
Russian Federation
30 Loyang Way
#02/12
Loyang Industrial Estate
508769
Singapore
30 Loyang Way
#02/12
Loyang Industrial Estate
508769
Singapore
Karadžičova 2 Bratislava -
mestskáčasťStaréMesto ,
Slovenská republika, 81109,
Slovakia
Block 29 Second Floor
The Highlands Estate
The Woodlands
Woodlands Drive
Woodmead, Gauteng
2191
Johannesburg
South Africa
Calle Josep Pla
Numero 2, Torre Diagonal Mar
Piso 11, Modulo 1
Barcelona
Spain
Calle Marques de Valdavia 103
Portal 5
28100
Alcobendas
Madrid
Spain
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Dormant
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
DOCS International Sweden AB
Kolonivagen 1
SE-226 60 Lund, Sweden
Clinical research
services
100%
DOCS International Switzerland GmbH
ICON Clinical Research (Switzerland)
GmbH
ICON Clinical Research Taiwan Limited
*****
c/o Experfina AG
Picassoplatz 8
4052 Basel
Switzerland
c/o Experfina AG
Picassoplatz 8
4052 Basel
Switzerland
6th Floor No. 2, Sec 5
Xinyi Road
Xinyl District
Taipei
Taiwan
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
121 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
ICON Clinical Research (Thailand) Limited 1 Empire Tower,
ICON Ankara Klinik Arastirma Dis Ticaret
Anonim Sirketi
DOCS Ukraine LLC
ICON Clinical Research LLC
Accellacare UK Limited
DOCS International UK Limited
ICON (LR) Limited
ICON Clinical Research (U.K.) Limited
ICON Clinical Research (U.K.) No. 2
Limited
ICON Clinical Research (U.K.) No. 3
Limited
ICON Clinical Research (U.K.) No. 4
Limited
ICON Clinical Research (U.K.) No. 5
Limited
ICON Development Solutions Limited
ICON Investments (UK) Ltd
Improving Treatments Limited
24th Floor, Unit 2408,
South Sathorn Road,
Yannawa, Sathorn,
Bangkok, 10120
Thailand
Söğütözü mah.
Eskişehir Yolu Cad. 2176. SK
No:9
Posta Kodu:06510
Çankaya Ankara
Turkiye
4th Floor,
St. Poleva 24,
Kiev,
Ukraine, 03056
4th Floor,
St. Poleva 24,
Kiev,
Ukraine, 03056
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
122 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Medeval Group Limited
MeDiNova Lakeside Clinical Research
Limited
MeDiNova Merc (UK) Limited
VSK (Kenilworth) Limited
ICON Clinical Research (U.K.) No. 6
Limited
ICON Clinical Research, LP
ICON Early Phase Services, LLC
Addplan, Inc.
Beacon Bioscience, Inc
C4 MedSolutions, LLC
CHC Group, LLC
CRN Holdings, LLC
Global Pharmaceutical Strategies Group,
LLC
ICON Clinical Investments, LLC
ICON Clinical Research LLC
ICON Laboratory Services, Inc.
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
8307 Gault Lane,
San Antonio,
TX 78209-1015
United States
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
3 Parkway North
Suite 200
Deerfield, IL 60015
United States
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Holding company
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Holding company
100%
Clinical research
services
100%
Clinical research
services
100%
Investment
Company
100%
100%
100%
731 Arbor Way Suite 100 Blue
Bell, PA United States, 19422
Clinical research
services
123 Smith Street,
Farmingdale,
NY 11735
United States
Clinical research
services
123 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
ICON Tennessee, LLC
ICON US Holdings Inc.
MMMM Consulting, LLC
MMMM Group, LLC
MolecularMD Corp.
PriceSpective LLC
PubsHub LLC
Accellacare of Christie Clinic, LLC
DOCS Global, Inc.
320 Seven Springs Way,
Suite 500,
Brentwood,
TN 37027
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
101 West University Avenue
Champaign
IL 61820
United States
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
Managed Care Strategic Solutions, L.L.C. 731 Arbor Way
Accellacare of Charlotte, LLC
Accellacare of Hickory, LLC
Accellacare of Raleigh, LLC
Accellacare of Rocky Mount, LLC
Accellacare of Salisbury, LLC
Suite 100
Blue Bell, PA
United States, 19422
3541 Randolph Road
Suite 101W
Charlotte
North Carolina 28211
USA
221 13th Ave Place NW
Suite 201
Hickory
North Carolina 28601
United States
3521 Haworth Drive
Suite 100
Raleigh
North Carolina 27609
United States
901 N. Winstead Avenue
Rocky Mount
North Carolina 27804
United States
410 Mocksville Avenue
Salisbury
North Carolina 28144
United States
Nature of
business
Proportion held by
Group
Holding company
100%
Holding Company 100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
124 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Accellacare of Wilmington, LLC
Accellacare of Winston-Salem, LLC
Accellacare US Inc.
Complete Healthcare Communications
LLC
Complete Publication Solutions, LLC
Accellacare of Charleston, LLC
Accellacare of Bristol, LLC
ICON Government and Public Health
Solutions, Inc.
RPS Research S.A.
Pharmaceutical Research Associates Pty
Limited
RPS Research Austria GmbH
IMP-Logistics Bel, FLLC
Pharmaceutical Research Associates
Belgium B.V. ******
RPS Bermuda, Ltd.
RPS do Brasil Serviços de Pesquisas
LTDA.
1907 Tradd Court
Wilmington
North Carolina 28401
United States
1901 S. Hawthorne Road
Suite 306
Winston-Salem
North Carolina 27103
United States
1901 S. Hawthorne Road
Suite 306
Winston-Salem
North Carolina 27103
United States
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
180 Wingo Way
Suite 203
Mt. Pleasant
South Carolina 29464
United States
1958 West State Street
Bristol
Tennessee 37620
United States
1265 Ridge Road, Suite A
Hinckley
OH 44233
United States
Cecilia Grierson 255
Floor 6
City of Buenos Aires
C1107CPE
Argentina
C/- ICON Clinical Research Pty
Ltd.
Suite 201, Level 2
2-4 Lyon Park Road
Macquarie Park NSW 2113
Australia
Tegetthoffstraße 7
1010 Vienna, Austria
28, Malinina st. bld.4, Liter A 1-2/
k,
Office #3, Minsk Republic of
Belarus 220101
E19 Business Park
Battelsesteenweg 455D
2800 Mechelen, Belgium
Victoria Place, 5th Floor
31 Victoria Street
Hamilton HM 10 Bermuda
Av. Ibirapuera 2332,
Torre II 4º Andar,
São Paulo, SP,
Brazil,
CEP 04028-003
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
100%
100%
Clinical research
services
100%
Holding company
100%
Clinical research
services
100%
125 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
RPS China Inc.
Registered Office**********
c/o Tricor Services BVI Limited
P.O. Box 3340
Road Town
Tortola, British Virgin Islands
Nature of
business
Proportion held by
Group
Holding company
100%
Pharmaceutical Research Associates
Bulgaria EOOD
51b Bulgaria Blvd., Floor 4
Sofia, Bulgaria 1404
Clinical research
services
100%
3065613 Nova Scotia Company
1741 Lower Water Street, Suite
600
Halifax, Nova Scotia B3J 0J2
Holding company
100%
Pharmaceutical Research Associates ULC 1741 Lower Water Street, Suite
600
Halifax, Nova Scotia B3J 0J2
Clinical research
services
100%
Services de Recherche Pharmaceutique
Srl
1741 Lower Water Street, Suite
600
Halifax, Nova Scotia B3J 0J2
Clinical research
services
100%
PRA Health Sciences Chile SpA
PRA Health Sciences China, Inc.
PRA Health Sciences Colombia Ltda.
Research Pharmaceutical Services Costa
Rica, LTDA.
Miraflores 222 piso 28
Santiago, Chile
Room 301, Floor 3, Building No.
5, Hongda Industrial Park, No. 8
Hongda North Road, Beijing
Economic-Technological
Development Area, Beijing
Calle 116 No. 7 – 15
Torre Cusezar Oficina 1002
Bogotá
Cundinamarca
Colombia
110111
Sabana Business Center, piso
11
Bulevar Rohrmoser y Calle 68
San José, Costa Rica 10108
Pharm Research Associates d.o.o. za
klinicka ispitivanja
Radnička cesta 180,
10 000 Zagreb, Croatia
Pharmaceutical Research Associates
Denmark ApS
RPS Estonia OÜ
c/o BuusMark Advokater
Sankt Ols Gade 4
4000 Roskilde
Denmark
Pärnu road 22
10141 Tallinn, Republic of
Estonia
Pharmaceutical Research Associates
Finland Oy
Vattuniemenranta 2
00210 Helsinki, Finland
ReSearch Pharmaceutical Services France
S.A.S.
55 Avenue des Champs
Pierreux
Immeuble le Capitole
92000 Nanterre
France
Clinical research
services
Clinical research
services
100%
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
100%
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
100%
100%
IMP Logistics Georgia LLC
Pharmaceutical Research Associates
Georgia LLC
Pharmaceutical Research Associates
Greece A.E.
Mtatsminda District
Freedom Square N4 (Plot 66/4)
Tbilisi, Georgia
Clinical research
services
100%
42-42a (Building No. 1)
Alexander Kazbegi Avenue
Vake-Saburtalo District
Tbilisi, Georgia
81 Ifigeneias Street
Nea Ionia 142 31
Attikis, Athens, Greece
Clinical research
services
100%
Clinical research
services
100%
126 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
RPS Guatemala, S.A.
5 Avenida 5-55, Zona 14
Edificio Europlaza World
Business Center
Torre II, Nivel 9
Guatemala City, Guatemala
PRA Health Sciences (Hong Kong) Limited Unit 4321 & 4336A, 43/F
RPS Iceland ehf.
Pharmaceutical Research Associates India
Private Limited*******
Research Pharmaceutical Services
(Outsourcing Ireland) Limited
Pharmaceutical Research Associates
Israel Ltd.
Pharmaceutical Research Associates Italy
S.r.l.
PRA Health Sciences Kenya Limited
RPS Latvia SIA
UAB RPS Lithuania
RPS Malaysia Sdn. Bhd.
Pharmaceutical Research Associates
Mexico S. de R.L. de C. V. ********
AIA Tower, 183 Electric Road
North Point, Hong Kong
Skipholti 50D
105 Reykjavik, Iceland
Regus Kaledonia, Unit No 1B
Office No 538, Floor 5 Sahar
Road
Off Western Express Highway
Andheri(E) Mumbai
Mumbai City
400059 IN
India
South County Business Park,
Leopardstown,
Dublin 18
Ireland
Building E, 13th Floor
4 Haharash Street
Hod Hasharon 4524402 Israel
Via Porlezza, No. 12
Milan
20123
Italy
LR No. 1870/1/176, ALN House,
Eldama Ravine Close,
off Eldama Ravine Road,
Westlands
PO Box 764, Sarit Centre,
Nairobi, Kenya 00606
Blaumaņa iela 22
1011 Riga, Latvia
Upês street 21,
LT-08128 Vilnius, Lithuania
Level 13, Menara 1 Sentrum
201, Jalan Tun Sambanthan
Brickfields
50470 Kuala Lumpur
Wilayah Persekutuan
Malaysia
Ave. Insurgentes Sur No. 1602,
Desp. 503
Col. Credito Constructor Mexico
Benito Juarez, Distrito Federal
C.P. 03940 Mexico
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
100%
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
Clinical research
services
100%
100%
100%
Clinical research
services
100%
RPS Research México, S. de R.L. de C.V. Ave. Insurgentes Sur No. 1602,
Holding company
100%
RPS Research Servicios, S. de R.L. de
C.V.
Pharmaceutical Research Associates
Group B.V.
Desp. 502
Col. Credito Constructor Mexico
Benito Juarez, Distrito Federal
C.P. 03940 Mexico
Ave. Insurgentes Sur No. 1602,
Desp. 502
Col. Credito Constructor Mexico
Benito Juarez, Distrito Federal
C.P. 03940 Mexico
Van Swietenlaan 6
9728 NZ, Groningen
The Netherlands
Clinical research
services
100%
Clinical research
services
100%
127 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Nature of
business
Proportion held by
Group
PRA International Operations B.V.
ReSearch Pharmaceutical Services
Netherlands B.V.
Pharmaceutical Research Associates New
Zealand Limited
RPS Research Norway AS
RPS Panama Inc.
RPS Perú S.A.C.
RPS Research Philippines, Inc.
Van Swietenlaan 6
9728 NZ, Groningen
The Netherlands
Eduard van Beinumstraat 28,
2 Amsterdam Tower, 12e
verdieping, 1077CZ
Amsterdam
Grant Thornton New Zealand
Limited,
L3, 134 Oxford Terrace,
Christchurch, 8140 , New
Zealand
c/o EconPartner AS
Dronning Mauds gate 15
0250 Oslo, Norway
Urbanización Nuevo Reparto el
Carmen No. 58
Calle Primera, Edificio Moreno &
Moreno. Local Planta Baja,
Distrito de Panamá, Panamá
Av. Paseo de la República 5895
Oficina 606
Miraflores
Lima 18
Perú
24th Floor,
Salcedo Towers
.V. Dela Costa St
Barangay Bel-Air
Salcedo Village
City, Philippines
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Pharmaceutical Research Associates Sp. z
o.o.
Proximo 1, ul. Prosta 68
Warsaw
Poland
PRA International Portugal, Unipessoal,
Lda.
Av. da Republica, 50-10
1069-211, Lisboa, Portugal
Research Pharmaceutical Services Puerto
Rico, Inc.
Pharmaceutical Research Associates
Romania S.R.L.
Joint Stock Company IMP Logistics
257 Calle Tetuan
2nd Floor
San Juan
00901
Puerto Rico
8th Floor, Sky Tower
246c Caleca Floresca
Bucharest 14476 Romania
8, Energetikov str, v. Lesnoy
Gorodok Odintsovsky city
disctrict
Moscow region Russia 143080
Pharmaceutical Research Associates
Singapore Pte. Ltd.
#02-06/10, 21 Biopolis Road
Nucleos, Singapore 138567
Pharmaceutical Research Associates SK
s.r.o.
PRA Pharmaceutical S A (Proprietary)
Limited
Karadžičova 2 Bratislava -Old
Town District
Slovenská republika, 81109,
Slovakia
2nd Floor Building 29 Highlands
Estate
Woodlands Office Park
20 Woodlands Drive Woodmead
Gauteng 2191 South Africa
Clinical research
services
100%
Clinical research
services
Clinical research
services
100%
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
100%
100%
Clinical research
services
100%
128 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Pharmaceutical Research Associates
Korea Limited
Pharmaceutical Research Associates
España, S.A.U.
RPS ReSearch Ibérica, S.L.U.
RPS Spain S.L.
PRA International Sweden AB
PRA Switzerland AG
Pharmaceutical Research Associates
Taiwan, Inc.
RPS Research (Thailand) Co., Ltd.
142 Taeheran-ro
Gangnam-gu,
18th Floor (Yeoksam-dong,
Capital Tower)
Seoul
Republic of Korea
Avenida de Europa, 19
Edificio 1, 2a Planta
Pozuelo de Alarcon (Madrid)
Spain 28224
Avenida de Europa, 19
Edificio 1, 2a Planta
Pozuelo de Alarcon (Madrid)
Spain 28224
Avenida de Europa, 19
Edificio 1, 2a Planta
Pozuelo de Alarcon (Madrid)
Spain 28224
Kolonivagen 1
SE-226 60 Lund, Sweden
Lange Gasse 15
Basel 4052 Switzerland
Aurora Building, 5th Floor
No. 2, Sec 5, Xinyi Road,
Xinyi District, Taipei, Taiwan
24th Floor, Empire Tower, Tower
3
Unit 2408, 1 South Sathorn
Road
Yannawa Sub-District, Sathorn
District
Bangkok 10120 Thailand
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
Clinical research
services
Clinical research
services
100%
100%
100%
Clinical research
services
100%
Pra Turkey Sağlik Araştirma Ve Geliştirme
Limited Şirketi
Kisikli Caddesi; No. 28, K:1-2
Altunizade, Istanbul
Turkey 34662
Clinical research
services
100%
Pharmaceutical Research Associates
Ukraine, LLC
IMP Logistics UK Limited
4th Floor,
St. Poleva 24,
Kiev,
Ukraine, 03056
Cannon Place, 78 Cannon
Street
London EC4N 6AF England
Pharm Research Associates (UK) Limited Cannon Place, 78 Cannon
Sterling Synergy Systems Limited
ClinStar LLC
Nextrials, Inc.
Street
London EC4N 6AF England
Cannon Place, 78 Cannon
Street
London EC4N 6AF England
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Holding company
100%
Clinical research
services
100%
731 Arbor Way, Suite 100
Blue Bell, PA 19422
Clinical research
services
100%
Pharmaceutical Research Associates CIS,
LLC
Pharmaceutical Research Associates
Eastern Europe, LLC
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
Clinical research
services
100%
Clinical research
services
100%
Care Innovations, Inc.
950 Iron Point Road, Ste. 160
Folsom, CA 95630
Clinical research
services
100%
129 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Nature of
business
Proportion held by
Group
950 Iron Point Road, Ste. 160
Folsom, CA 95630
Clinical research
services
Care Innovations, LLC
CRI NewCo, Inc.
CRI Worldwide, LLC
International Medical Technical
Consultants, LLC
Parallel 6, Inc.
PRA Early Development Research, Inc.
PRA Health Sciences, Inc.
PRA Holdings, Inc.
PRA International, LLC
PRA Receivables, LLC
ReSearch Pharmaceutical Services, LLC
ReSearch Pharmaceutical Services, Inc.
Roy RPS Holdings LLC
RPS Global Holdings, LLC
RPS Parent Holding LLC
Source Healthcare Analytics, LLC
Sunset Hills, LLC
Symphony Health Solutions Corporation
CRI International, LLC
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
100%
100%
Clinical research
services
Clinical research
services
100%
Holding company
100%
4131 Parklake Avenue, Suite
600, Raleigh, North Carolina
27612
Clinical research
services
100%
9755 Ridge Drive
Lenexa, Kansas 66219
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
731 Arbor Way, Suite 100
Blue Bell, PA 19422
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
731 Arbor Way, Suite 100
Blue Bell, PA 19422
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
731 Arbor Way
Suite 100
Blue Bell, PA 19422
4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
Clinical research
services
Clinical research
services
100%
100%
Holding company
100%
Holding company
100%
Holding company
100%
Clinical research
services
100%
Clinical research
services
100%
Holding company
100%
Holding company
100%
Holding company
100%
Clinical research
services
100%
Holding company
100%
Clinical research
services
100%
Clinical research
services
100%
Lifetree Clinical Research, LC
1255 East 3900 South, Salt
Lake City, Utah 84124
Clinical research
services
100%
130 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Pharmaceutical Research Associates, Inc. 4131 Parklake Avenue
Suite 600
Raleigh, NC 27612
Nature of
business
Proportion held by
Group
Clinical research
services
100%
RPS Global S.A.
RPS Latin America S.A
PRA Clinical Limited*********
Plaza Cagancha 1145, 4th Floor
Montevideo, Uruguay 11100
Clinical research
services
Plaza Cagancha 1145, 4th Floor
Montevideo, Uruguay 11100
Clinical research
services
South County Business Park,
Leopardstown,
Dublin 18
Ireland
Clinical research
services
100%
100%
100%
ICON Clinical Research Holdings (U.K.)
Limited
500 South Oak Way Green Park
Reading RG2 6AD United
Kingdom
Investment holding
company
100%
ICON Clinical Research Holdings (Ireland)
Unlimited Company
South County Business Park,
Leopardstown,
Dublin 18
Ireland
RPS do Brasil Serviços de Pesquisas Ltda. Av. Ibirapuera 2332,
Torre II 4º Andar,
São Paulo, SP,
Brazil,
CEP 04028-003
Investment holding
company
100%
Clinical research
services
100%
ICON Clinical Research Czech Republic
s.r.o.
Prague 7,
Jankovcova 1569/2c, 170 00,
Czech Republic
Clinical research
services
100%
ICON Clinical Research Egypt Limited
Liability Company
Oncacare France SAS
Oncacare (Germany) GmbH
40 Road 254, Shell Building, 5th
Floor
Degla, Maadi, 11431 Cairo,
Egypt
Maadi 11431, Cairo, Egypt
Immeuble le Capitole
55 Avenue des Champs Pierreux
92000
Nanterre
France
Heinrich-Hertz-Strabe 26
63225
Langen
Hessen
Germany
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Averion Europe GmbH i.L
Konrad-Zuse-Platz 11
81829 München
Germany
Clinical research
services
100%
ICON Clinical Research Limited Liability
Company
Szepvolgyi ut 39
HU-1037 Budapest
Hungary
Clinical research
services
100%
131 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Oncacare Limited
South County Business Park
Leopardstown
Dublin 18
D18 X5R3
Ireland
Nature of
business
Proportion held by
Group
Clinical research
services
100%
Oncacare Italy S.r.l
Via Benigno Crespi, n. 19,
20159, Milano
Italy
Clinical research
services
100%
ICON Clinical Research GK
1-3 Kyutaro-machi 4-chome,
Chuo-ku, Osaka 541-0056
Japan
Clinical research
services
100%
Symphony Clinical Research Sp z.o.o.
ICON Clinical Research Poland Sp z o.o.
ICON Clinical Research doo Beograd
Pharmaceutical Research Associates doo
Belgrade
RPS Research South Africa (Proprietary)
Limited
ul. Potokowa 26
80-283
Gdansk
Poland
Proximo 1
ul. Prosta 68
Warsaw
Poland
4th Floor,
Bulevar Zorana Djindjica 64a,
11070 Belgrade,
Serbia
19th Avenue
Vladimira Popovica 38-40
Belgrade, 11070 Serbia
15 Greenwich Grove, Station
Road, Rondebosch, Western
Cape, 7700, South Africa
Mapi Korea Yuhan Hoesa/ Mapi Korea LLC 16th Floor
ICON Clinical Research Korea Limited
Oncacare (Spain), S.L.
396 Seocho-daero
Seocho-gu
Seoul 06619
Republic of Korea
142 Taeheran-ro
Gangnam-gu,
18th Floor (Yeoksam-dong,
Capital Tower)
Seoul
Republic of Korea
Calle Josep Pla
Numero 2, Torre Diagonal Mar
Piso 11, Modulo 1
Barcelona
Spain
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Dormant
100%
Clinical research
services
100%
Clinical research
services
100%
IMP-Logistics Ukraine LLC
8,Viskozna st. Kyiv Ukraine
02094
Logistics
100%
132 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Aptiv Solutions (UK) Ltd
500 South Oak Way Green Park
Reading
RG2 6AD
United Kingdom
Nature of
business
Proportion held by
Group
Clinical research
services
100%
OncaCare (U.K.) Limited
VirtualScopics, LLC
BioTel Research, LLC
ICON HF Corp. **********
Oncacare, Inc.
500 South Oak Way
Green Park
Reading
Berkshire
RG2 6AD
United Kingdom
155 Corporate Woods
Suite 180
Rochester
NY
14623
155 Corporate Woods
Suite 180
Rochester NY 14623
United States
731 Arbor Way
Suite 100
Blue Bell, PA
United States, 19422
c/o Corporation Service
Company
251 Little Falls Drive
Wilmington
County of New Castle DE 19808
United States
ICON Research Ltd.
Pharmaceutical Research Associates
Hungary Research and Development Ltd.
Radnicka cesta 80,
Zagreb,
Croatia
Szepvolgyi ut 39
HU-1037 Budapest
Hungary
ICON Clinical Research India Private
Limited
CRN NORTH AMERICA, LLC
CHENNAI ONE IT PARK ITE/
ITES SEZ North Block
Block B, 4th Floor,
Thoraipakkam
Chennai, Tamil Nadu-TN
600097, India
3 Parkway North
Suite 200
Deerfield, IL 60015
United States
Pharmaceutical Research Associates Ltda. Av. Ibirapuera 2332,
Clinical Resource Network, LLC
Torre II 4º Andar,
São Paulo, SP,
Brazil,
CEP 04028-003
3 Parkway North
Suite 200
Deerfield, IL 60015
United States
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
Clinical research
services
100%
133 Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2023
32. Subsidiary undertakings (continued)
Name
Registered Office**********
Nature of
business
Proportion held by
Group
* majority of which is held directly by ICON plc.
** DOCS International Belgium N.V. merged out of existence on 1 January 2024.
*** Mapi Research Trust is an association, its members are ICON Subsidiary entities.
****DOCS International B.V. changed registered address as at 31 March 2024 to Van Swietenlaan 6, 9728 NZ Groningen,
The Netherlands.
***** ICON Clinical Research Taiwan Limited changed registered address as at 5 February 2024 to 5th Floor No. 2, Sec 5
Xinyi Road, Xinyi District, Taipei, Taiwan
******Pharmaceutical Research Associates Belgium B.V. changed name to ICON Clinical Research Belgium B.V. with effect
from 1 January 2024 and changed registered address as at 19 February 2024 to Kardinaal Mercierplein 2, 2800 Mechelen,
Belgium.
*******Pharmaceutical Research Associates India Private Limited changed registered address as at 24 February 2024 to
Level 3 & 4, Prestige Blue Chip Software Park, Municipal No 9, Hosur Road, Adugodi, Madiwala Range, Ward No 63,
Bangalore – 560029, Karnataka.
********Pharmaceutical Research Associates Mexico S. de R.L. de C. V. changed registerd address as at 26 March 2024 to
Avenida Insurgentes Sur 1271, Piso 16, Interior 1601, Colonia Extremadura Insurgentes, CP 03740, Benito Juarez, CDMX,
Mexico.
*********PRA Clinical Limited was struck off 8 January 2024.
**********ICON HF Corp. merged out of existence on 9 January 2024.
***********Principal office address used for U.S. entities
33. Approval of financial statements
The Board of Directors approved these financial statements on 23 April 2024.
134 Company Statement of Financial Position
for the year ended 31 December 2023
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment in subsidiaries
Other non-current assets
Deferred tax asset
Total non-current assets
Current assets
Other current assets
Amounts due from subsidiary undertakings
Deferred tax asset
Cash and cash equivalents
Total current assets
Total assets
EQUITY
Share capital
Share premium
Merger reserve
Other undenominated capital
Share-based payment reserve
Other reserve
Foreign currency reserve
Retained earnings
Total equity attributable to equity holders
LIABILITIES
Non-current liabilities
Non-current other liabilities
Total non-current liabilities
Current liabilities
Accounts payable
Amounts due to subsidiary undertakings
Accrued and other liabilities
Current taxes payable
Total current liabilities
Total liabilities
Total equity and liabilities
On behalf of the Board
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
Note 31 December
2023
$’000
31 December
2022
$’000
1
8
2
3
4
5
6
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16
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399
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276
727
7,086,423
32
329
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146,898
2
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156,281
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6,699
523,646
5,656,195
1,162
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27,405
(112,848)
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174
17,758
5,353
5,353
773
1,001
14,748
334
16,856
17,758
22,209
7,351,665
7,244,068
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137
Notes to Company Financial Statements
for the year ended 31 December 2023
1. Property, plant and equipment
–
PLC
Cost
At 1 January 2023
Additions
Disposals
Foreign currency movement
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the year
Disposals
Foreign currency movement
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
Cost
At 1 January 2022
Additions
Disposals
Foreign currency movement
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the year
Disposals
Foreign currency movement
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
Leasehold
improvements
Computer
equipment
Office furniture
& fixtures
$’000
$’000
$’000
353
9
(10)
38
390
348
8
(10)
38
384
6
5
630
29
(45)
66
680
621
11
(45)
65
652
28
9
903
217
(460)
70
730
641
65
(303)
50
453
277
262
Leasehold
improvements
Computer
equipment
Office furniture
& fixtures
$’000
$’000
$’000
965
—
(533)
(79)
353
958
1
(533)
(78)
348
5
7
1,910
1,775
3
(1,125)
(158)
630
1,886
16
(1,125)
(156)
621
9
24
29
(765)
(136)
903
1,437
81
(764)
(113)
641
262
338
Total
$’000
1,886
255
(515)
174
1,800
1,610
84
(358)
153
1,489
311
276
Total
$’000
4,650
32
(2,423)
(373)
1,886
4,281
98
(2,422)
(347)
1,610
276
369
138
Notes to Company Financial Statements (continued)
for the year ended 31 December 2023
2.
Investment in subsidiaries
Cost
At 1 January 2022
Additions
Redemptions
Share-based payment
Share subscription payment from subsidiary companies
At 31 December 2022
Additions
Redemptions
Share-based payment
Share subscription payment from subsidiary companies
At 31 December 2023
Investment in
Subsidiary
Undertakings
$’000
6,974,348
183,051
(83,000)
42,431
(30,407)
7,086,423
265,086
(105,936)
41,832
(137,960)
7,149,445
On 1 July 2023, ICON plc transferred the trade of its Italian branch to ICON Holdings Clinical Research International Limited
in exchange for the allotment and issuance of 9,214 ordinary shares of €1.00 each in the share capital of ICON Holdings
Clinical Research International Limited, issued at a premium of €2,086.85 per share. The disposal of the trade has resulted
in a gain of $13.5 million being recorded in Other Reserves in the Company Statement of Changes in Equity.
On 26 July 2023, ICON plc subsequently contributed its interest in ICON Holdings Clinical Research International Limited to
ICON Holdings Unlimited Company. The transaction resulted in ICON Holdings Clinical Research International Limited
moving from a direct to indirect subsidiary and had no impact on the Company’s financial assets.
On 1 October 2023, ICON plc transferred its interest in ICON Japan, with a carrying value of $3.1 million, to PRA Health
Sciences KK in exchange for a loan note of amounting to $10.9 million. The transaction resulted in the Company recording a
gain on disposal of $7.8 million in Other Reserves in the Company Statement of Changes in Equity.
139
Notes to Company Financial Statements (continued)
for the year ended 31 December 2023
3. Deferred taxation
The net deferred tax asset at 31 December 2023 and 31 December 2022 was as follows:
Deferred taxation assets
Accrued expenses and payments on account
Property, plant and equipment
Total deferred taxation assets
Deferred taxation assets
Accrued expenses and payments on account
Property plant and equipment
Total deferred taxation assets
Deferred taxation assets
Accrued expenses and payments on account
Property, plant and equipment
Loans to subsidiaries
Total deferred taxation assets
31 December
2023
31 December
2022
$'000
$'000
387
12
399
318
11
329
1 January
2023
Recognised
in Income
31 December
2023
$'000
$'000
$'000
318
11
329
69
1
70
387
12
399
1 January
2022
Recognised in
Income
31 December
2022
$'000
$'000
$'000
435
6
50
491
(117)
5
(50)
(162)
318
11
—
329
At 31 December 2023 and 31 December 2022 the Company had no operating loss carry forwards for income tax purposes.
At 31 December 2023 the Company had an unrecognised deferred tax asset in respect of unutilised foreign tax credits
carried forward of $8.8 million (2022: $8.8 million).
140
Notes to Company Financial Statements (continued)
for the year ended 31 December 2023
4. Other current assets
Prepayments
Other receivables
Total
5. Amounts due from/to subsidiary undertakings
Amounts due from subsidiary undertakings
Amounts due to subsidiary undertakings
31 December
2023
31 December
2022
$’000
407
906
1,313
$’000
301
2,136
2,437
31 December
2023
31 December
2022
$’000
$’000
191,711
146,898
(798)
(1,001)
Amounts owed by subsidiary undertakings are non-interest bearing and repayable on demand. All amounts fall due within
one year. No allowance for expected credit losses has been recorded as amounts are expected to be fully recovered.
6. Accrued and other liabilities
Non-current other liabilities
Lease Liabilities
Other liabilities
Total
Current liabilities
Current lease liabilities
Accruals and other liabilities
Total
7. Related parties
31 December
2023
31 December
2022
$’000
$’000
—
—
—
364
4,989
5,353
31 December
2023
31 December
2022
$’000
$’000
16
16,501
16,517
832
13,916
14,748
Directors and Executive Officers of the Parent Company are the same as those for the Group. For information on
transactions with Directors and Executive Officers see note 30 Related parties, to the Consolidated Financial Statements,
and for information on Directors’ remuneration see note 10 Payroll and related benefits.
141
Notes to Company Financial Statements (continued)
for the year ended 31 December 2023
8. Leases
Right-of-use assets
The Company has the following right-of-use assets:
Depreciation charge for 2023
Right-of-use assets at 31 December 2023
Depreciation charge for 2022
Right-of-use assets at 31 December 2022
Premises
Equipment
$'000
453
16
1,041
727
$'000
—
—
1
—
Total
$'000
453
16
1,042
727
Additions to right-of-use assets during 2023 were $0.04 million (2022: $0.30 million).
The weighted average remaining lease term as at 31 December 2023 is 0.46 years (2022: 1.09 years).
Lease liabilities
Future minimum lease payments under non-cancellable leases as of 31 December 2023 were as follows:
2024
Total future minimum lease payments
Lease imputed interest
Total
Minimum
rental
payments
$'000
16
16
—
16
Lease liabilities are presented as current and non-current. Current lease liabilities of $0.02 million have been included in
accrued and other liabilities as at 31 December 2023 (2022: $0.8 million).
Amounts recognised in profit or loss
The following amounts were recognised in profit and loss:
Depreciation of right-of-use assets
Interest on lease liabilities
31 December
2023
31 December
2022
$'000
453
—
$'000
1,042
3
The depreciation cost of right-of-use assets is recorded within other operating expenses and interest on lease liabilities is
recorded within finance costs.
During the year ended 31 December 2023 and the year ended 31 December 2022, the Company did not incur any costs
related to variable lease payments.
9. Litigation
The Company is not party to any litigation or other legal proceedings that the Company believes could reasonably be
expected to have a material adverse effect on the Company’s business, results of operations and financial position.
However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary
course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise
from time to time that may harm our business.
142
Notes to Company Financial Statements (continued)
for the year ended 31 December 2023
10. Financial instruments
The Company is exposed to various financial risks in the normal course of the business. The Company’s financial
instruments typically comprise cash and accounts payable. The main purpose of these financial instruments is to provide
finance for the Company’s operations. The main risks arising from the Company’s financial instruments are credit risk,
liquidity risk, foreign exchange risk and interest rate risk.
Credit risk
Intercompany loans receivable and payable are initially recognised at fair value. These are subsequently measured at
amortised cost, less any loss allowance. An expected credit loss assessment was performed in respect of the receivables at
31 December 2023 and 31 December 2022. The identified impairment loss was immaterial.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Credit risk in respect of the Company arises on balances due from group companies. As the Group
is financially sound and the subsidiary entities that the Company trades with are in a position to make payments as and
when they fall due, the Company has assessed the exposure to credit risk as low.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s
liquidity risk arises from the repayment of short-term debt and other obligations as they fall due. The Company minimises
liquidity risk by ensuring that sufficient cash balances and committed bank lines of credit are available to meet its obligations
as they fall due. The Company’s bank credit lines and facilities are the same as the Group. Details of the Group’s bank
credit lines and facilities are set out in note 23 Bank credit lines and loan facilities.
The following table sets out details of the maturity of the Company’s financial liabilities into the relevant maturity groupings
based on the remaining period from the financial year end date to the contractual maturity date:
Year ended 31 December 2023:
Carrying
Amount
$’000
Contractual
Cashflows
$’000
Under 1
year
$’000
1 to 2
years
$’000
2 to 5
years
$’000
More than
5 years
$’000
Accounts payable
Lease liability
Accruals and other liabilities
—
16
—
16
—
16
16,501
16,517
16,501
16,517
16,501
16,517
—
—
—
—
—
—
—
—
—
—
—
—
Year ended 31 December 2022:
Carrying
Amount
$’000
Contractual
Cashflows
$’000
Under 1
year
$’000
1 to 2
years
$’000
2 to 5
years
$’000
More than
5 years
$’000
Accounts payable
Lease liability
Accruals and other liabilities
—
—
1,196
1,199
—
832
18,905
20,101
18,905
20,104
13,916
14,748
—
295
234
529
—
72
1,616
1,688
—
—
3,139
3,139
Foreign currency risk
While the functional currency of the Company is USD, the functional currency of the branches is Euro. As a consequence,
the results, when translated into U.S. dollars, could be affected by fluctuations in exchange rates against the U.S. dollar. At
31 December 2023 the Company had $Nil US dollar denominated bank loans (2022: $Nil).
Interest rate risk
The Company finances its operations through a mixture of shareholders’ funds, borrowings and working capital. The
Company borrows in required currencies at both fixed and floating interest rates. In general the Company borrows at floating
rates of interest but may borrow at fixed rates depending on rates available having regard to current market rates and future
trends. The Company has no external borrowings.
143
Notes to Company Financial Statements (continued)
for the year ended 31 December 2023
10. Financial instruments (continued)
Fair values
Financial instruments are measured in the Statement of Financial Position at fair value using a fair value hierarchy of
valuation inputs. The hierarchy prioritises the inputs into three levels based on the extent to which inputs used in measuring
fair value are observable in the market. Each fair value measurement is reported in one of three levels, which is determined
by the lowest level input that is significant to the fair value measurement in its entirety.
The carrying values of amounts due from subsidiary undertakings, cash and cash equivalents, other current assets,
accounts payable and accruals and other liabilities are carried at amortised cost and assumed to be approximate to their fair
values due to the short-term nature of these balances.
Amounts owed by subsidiary undertakings are non-interest bearing and repayable on demand. All amounts are therefore
recorded as due within one year. Fair value is deemed to equal carrying value on this basis.
Each category of asset and liability has remained within the same level of hierarchy as the prior year as there has been no
change in the extent to which the inputs used in measuring fair value are or are not observable within the market.
11. Approval of financial statements
The Board of Directors approved the Company Financial Statements on 23 April 2024.
144 Reconciliation from IFRS to US Accounting Policies
The Consolidated Financial Statements set out on pages 38 to 134 have been prepared in accordance with International
Financial Reporting Standards (“IFRS”), as adopted by the European Union (“EU IFRS”), which differ in certain significant
respects from generally accepted accounting principles applicable in the U.S. (“U.S. GAAP”). The material differences as
they apply to the Consolidated Financial Statements are as follows:
(a) Financial statement format
The format of the financial statements and certain note disclosures differ under U.S. GAAP from those under EU IFRS. The
Group prepared a U.S. Securities and Exchange Commission Form 20-F Report which was made available to all
shareholders in February 2024. The financial statements included in such Form 20-F are prepared in accordance with U.S.
GAAP.
(b) Merger with PRAI
The Group accounts for business combinations under EU IFRS in accordance with the IFRS 3 Business Combinations. As
permitted by IFRS 1 First Time Adoption of International Financial Reporting Standards the Group has only restated
business combinations from 1 June 2001 onwards. Business combinations prior to this date have not been restated. In
addition, goodwill has no longer been amortised since 1 June 2001, but rather is tested annually for impairment. U.S. GAAP
adopts different criteria to EU IFRS for establishing the method of accounting to be adopted for business combinations. On
28 January 2000, the Group completed a transaction with Pacific Research Associates Inc. (“PRAI”), a Group specialising in
data management, statistical analysis and medical and regulatory consulting based in San Francisco, USA. The merger with
PRAI was accounted for using acquisition accounting principles in accordance with EU IFRS whilst U.S. GAAP required that
the merger be accounted for using the pooling-of-interest method of accounting. U.S. GAAP pooling-of-interest accounting
has resulted in a number of adjustments. Most significantly:
(i)
the Group’s historic U.S. GAAP financial statements have been restated to reflect the combined results of ICON
and PRAI;
(ii)
the costs of the merger were expensed for U.S. GAAP purposes and included in the cost of acquisition for IFRS;
(iii) goodwill arising on IFRS has been amortised over its expected useful life up to 31 May 2001. No goodwill arose on
the merger under U.S. GAAP;
(iv) the tax charge arising on the conversion of PRAI from an S-Corporation to a C-Corporation is treated as a pre-
acquisition charge under IFRS.
(c) Share-based payment expense
IFRS requires that the fair value of share-based payments be expensed to the Consolidated Statement of Profit and Loss
over the period the related services are received, with a corresponding increase in equity. The Group has accounted for
share-based payments under U.S. GAAP in accordance with ASC 718, Compensation – Stock Compensation, which also
requires that the fair value of share-based payments be expensed to the Consolidated Statement of Profit and Loss over the
period the related services are received, with a corresponding increase in equity.
There is a difference in recorded expense. U.S. GAAP requires that the accelerated graded vesting attribution approach is
applied in respect of awards with straight line graded vesting. IFRS requires that each instalment of an award where there
is graded vesting is treated as a separate grant with a different fair value. Each instalment is therefore separately measured
and charged to the Consolidated Statement of Profit and Loss over the related vesting period. This results in accelerated
expense recognition under IFRS.
(d) Stock-based Compensation Arrangements in a Business Combination
An exchange of share-based payment awards in a business combination is treated as a modification under IFRS 2. The
replacement awards and the original acquiree awards should both be measured at fair value at the acquisition date and
calculated using the fair-value-based measurement principles in IFRS 2.
U.S. GAAP requires the attribution of compensation cost for the acquirer’s replacement awards in the post-combination
financial statements to be based on the acquirer’s attribution policy (i.e., straight-line approach or graded-vesting approach).
Under IFRS, however, the graded vesting approach is required for all awards with graded vesting features based on the
requirements in IFRS 2.
145 Reconciliation from IFRS to US Accounting Policies (continued)
(e) IAS 19R Defined Benefit Pensions
The Group has recognised the net interest expense of the defined benefit pension scheme within payroll costs (operating
expenses) in the Consolidated Statement of Profit and Loss under IAS19R which is consistent with the U.S. GAAP
treatment of this cost. Additional net credits related to the defined benefit pension schemes refer to the adjustment required
to reverse the application of the corridor approach permitted under U.S. GAAP and the different net interest expense
recorded under IFRS and U.S. GAAP.
(f) Current tax and deferred tax assets
Deferred tax asset
U.S. GAAP, ASC 740, Income Taxes requires recognition of a deferred tax asset in respect of the cumulative amount of
compensation cost recognised in the financial statements in respect of unexercised options that will give rise to a future tax
deduction. The tax deduction is based on the intrinsic value of the options, with the full tax deduction recorded in profit or
loss in the year of exercise.
IFRS also requires that a deferred tax asset is recognised in respect of options not yet exercised where a tax deduction will
arise. IAS 12 Income taxes requires that the tax deduction is estimated. The fair value estimate is based on the share price
at the exercise date.
Current tax benefit
U.S. GAAP, ASC 740, Income Taxes requires recognition of a current tax benefit of certain tax deductions arising from
Share-based payment windfall gains in the Consolidated Statement of Operations. IFRS requires that the current tax benefit
of these Share-based payment windfall gains is recognised through Equity, in the Share-based payment reserve.
(g) IFRS 16 Leases
Under U.S. GAAP, ASC 842 Leases, lessees account for leases as operating or finance. Costs in respect of operating
leases are charged to the Consolidated Statement of Operations on a straight-line basis over the lease term. Lease costs
for all leases under IFRS 16 are comprised of the depreciation of right-of-use assets and the interest charge in respect of
the associated lease liability.
(h) Contract Assets and Contract Liabilities in a Business Combination
In October 2021, the FASB issued ASU 2021-08 "Business Combinations (Topic 805) - Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers". The amendments in this ASU require that an entity (acquirer) recognise
and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the
acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had
originated the contracts. The Company has adopted the amendments in this ASU for year ended 31 December 2021 and
has applied the amendments of this ASU to the Merger with PRA, completed on 1 July 2021.
IFRS 3 Business Combinations does not have a similar fair value measurement exception for contract assets and contract
liabilities. As a result, contract liabilities will have a lower valuation under IFRS compared to U.S. GAAP with the valuation
adjustment being charged to revenue over the life of the contract with the customer.
(i) Measurement period adjustments (acquisition accounting)
Under U.S. GAAP, ASC 805 Business Combinations, any adjustments which are made to provisional acquisition accounting
(i.e., measurement period adjustments) are reflected in the current period. Under IFRS, measurement period adjustments
are reflected through retrospective application to the period in which the acquisition occurred. As such, measurement period
adjustments recorded during 2022, in connection with the finalisation of acquisition accounting for the PRA Acquisition, have
been applied retrospectively for IFRS purposes. Measurement period adjustments primarily consist of final acquisition
accounting adjustments to goodwill, intangible assets and the related deferred tax impact.
146 Reconciliation from IFRS to US Accounting Policies (continued)
The following is a summary of the material adjustments to profit for the financial year and shareholders’ equity, which would
be required, had the Consolidated Financial Statements been prepared in accordance with U.S. GAAP:
(i) Effect on profit for the financial year
31 December
2023
31 December
2022
$’000
$’000
Profit for the financial year attributable to equity holders of the Company as stated under
IFRS
609,024
506,285
U.S. GAAP adjustments
Share-based payment expense under IFRS (c) (d)
Share-based payment expense under U.S. GAAP (c) (d)
Fair value adjustment to unearned revenue under IFRS (h)
Amortisation adjustment related to measurement period adjustment under IFRS (i)
Right-of-use asset amortisation adjustment under IFRS (g)
Deferred tax adjustments on share-based payments (f)
Current tax adjustments on share-based payments (f)
Deferred tax adjustments on leases (f)
Additional costs of defined benefit pension scheme (e)
Net income as stated under U.S. GAAP
51,380
55,790
(55,665)
(70,523)
—
—
436
2,664
4,323
(108)
281
8,000
(2,167)
1,179
6,572
(313)
(156)
637
612,335
505,304
Basic earnings per Ordinary Share under U.S. GAAP
$7.46
$6.20
Diluted earnings per Ordinary Share under U.S. GAAP
$7.40
$6.13
147
Reconciliation from IFRS to US Accounting Policies (continued)
(ii) Effect on shareholders’ equity
31 December
2023
31 December
2022
$’000
$’000
Total equity attributable to the owners of the Company as stated under IFRS
9,322,815
8,569,982
U.S. GAAP adjustments
Goodwill (net) arising on PRA merger related stock compensation (d)
Fair value adjustment to unearned revenue under IFRS (h)
Right-of-use asset amortisation adjustment under IFRS (g)
Deferred tax adjustments on leases (f)
Taxes on unearned revenue (f)
Goodwill (net) arising on merger with PRAI (b)
Deferred tax adjustments on share-based payments (f)
(58,199)
16,000
3,070
(942)
(4,104)
(14,009)
(23,888)
(58,199)
16,000
2,634
(834)
(4,104)
(14,009)
(13,507)
Total equity attributable to the owners of the Company as stated under U.S. GAAP
9,240,743
8,497,963
(iii) Effect on total assets
Total assets as stated under IFRS
U.S. GAAP adjustments
Right-of-use asset amortisation adjustment under IFRS (g)
Goodwill (net) arising on PRA merger related stock compensation (d)
Goodwill (net) arising on merger with PRAI (b)
Goodwill on fair value adjustment to unearned revenue under IFRS (h)
Deferred tax adjustments on share-based payments (f)
Goodwill (net) arising on PRA merger related right-of-use assets (g)
Total assets as stated under U.S. GAAP
(iv) Effect on total liabilities
Total liabilities as stated under IFRS
U.S. GAAP adjustments
Deferred tax adjustments on leases (f)
Total liabilities as stated under U.S. GAAP
31 December
2023
31 December
2022
$’000
$’000
17,071,170
17,256,640
3,070
2,634
(58,199)
(14,009)
(58,199)
(14,009)
16,000
16,000
(27,995)
(17,614)
(174)
(174)
16,989,863
17,185,278
31 December
2023
31 December
2022
$’000
$’000
7,748,355
8,686,658
765
657
7,749,120
8,687,315
148
Appendix A: Risk Factors
Risk Related to Our Business and Operations
The potential loss or delay of our large contracts, or of multiple contracts, could adversely affect our results.
Our clients may discontinue using our services completely or cancel some projects either without notice or upon
short notice. The termination or delay of a large contract, or of multiple contracts, could have a material adverse effect on
our revenue and profitability. Historically, clients have canceled or discontinued projects and may in the future cancel their
contracts with us for reasons including, amongst others:
•
•
•
•
•
the failure of products being tested to satisfy safety or efficacy requirements;
unexpected or undesired clinical results of the product;
a decision that a particular study is no longer necessary or viable;
poor project performance, quality concerns, insufficient patient enrollment or investigator recruitment; and
production problems resulting in shortages of the drug.
As a result, contract terminations, delays or other changes are part of our clinical services business. In the event of
termination, our contracts often provide for fees for winding down the trial but these fees may not be sufficient for us to
maintain our margins, and termination may result in lower resource utilisation rates. In addition, we may not realise the full
benefits of our unsatisfied performance obligation of contractually committed services if our clients cancel, delay or reduce
their commitments under our contracts with them. Therefore, the loss, early termination or delay of a large contract or
contracts could adversely affect our revenues and profitability.
If we do not generate new business awards, or if new business awards are delayed, terminated, reduced in scope
or fail to go to contract, our business, financial conditions, results of operations or cash flows may be materially
adversely affected.
Our business is dependent on our ability to generate new business awards from new and existing customers and
maintain existing customer contracts. If we were unable to generate new business awards on a timely basis and contract for
those awards, that could have a material impact on our business, financial condition, results of operations or cash flows.
We depend on a limited number of customers and a loss of, or significant decrease in, business from one or more
of them could affect our business.
While no customers individually contributed more than 10% of our revenues during the years ended 31 December
2023 and 31 December 2022, our top five customers represented 26.8% and 28.3% of our revenues, respectively. The loss
of, or a significant decrease in, business from one or more of these key customers could have a material adverse impact on
our results of operations and financial results.
The inability of biotechnology customers to raise adequate financing or funding could affect our business.
A portion of our revenue is generated from sales and services to the biotechnology industry. The clients we serve
are commonly subject to financial pressures, including, but not limited to, the ability to obtain adequate financing or generate
sufficient funding. To the extent our clients face such pressures, or they change how they utilise our offerings, the demand
for our services, or the prices our clients are willing to pay for those services, may decline. Any such decline could have a
material adverse effect on our business, operating results and financial condition.
Our financial results may be adversely impacted if we underprice our contracts, overrun our cost estimates or fail
to receive approval for, or experience delays in, documenting change orders.
Many of our contracts are long-term fixed price or fixed unit price contracts for services. As a result, variations in
the timing and progress of large contracts may materially adversely affect our results of operations. Revenue recognised on
these service contracts are based on an assessment of progress towards completion being the cost of time and other third
party costs as a percentage of total estimated time and other third party costs to deliver our services. As a result, variations
in the timing and progress of large contracts may materially adversely affect our results of operations. Estimating time and
costs to complete requires judgment and includes consideration of the complexity of the study, the number of geographical
sites where trials are to be conducted and the number of patients to be recruited at each site. We regularly review the
estimated hours on each contract to determine if the budget accurately reflects the agreed tasks to be performed, taking into
account the state of progress at the time of review.
We bear the risk of cost overruns unless the scope of activity is revised from the contract specifications and we are
able to negotiate a contract modification. We endeavor to ensure that any changes in scope are appropriately monitored
and change orders or contract modifications are promptly negotiated and documented for changes in scope. If we fail to
successfully negotiate change orders for changes in the resources required or the scope of the work to be performed, and
149
Appendix A: Risk Factors (continued)
the costs of performance of these contracts exceeded their fixed fees, it could materially adversely affect our operations and
financial results.
If we are unable to successfully develop and market new services or enter new markets, our growth, results of
operations or financial condition could be adversely affected.
A key element of our growth strategy is the successful development and marketing of new services or entering new
markets that complement or expand our existing business. As we develop new services or enter new markets, we may not
have or be able to adequately build the competencies necessary to perform such services satisfactorily, may not receive
market acceptance for such services or may face increased competition. If we are unable to succeed in developing new
services, entering new markets or attracting a client base for our new services or in new markets, we will be unable to
implement this element of our growth strategy, and our future business, reputation, results of operations could be adversely
impacted.
If we fail to attract or retain key personnel, our performance may suffer.
Our business, future success and ability to continue to expand operations depends upon our ability to attract, hire,
train and retain qualified professional, scientific and technical operating people. We compete for qualified professionals with
other Clinical Research Organisations (“CROs”), temporary staffing agencies and the in-house departments of
pharmaceutical, biotechnology and medical device companies. An inability to attract and retain a sufficient number of high
caliber clinical research professionals (in particular, key personnel and executives) at an acceptable cost would impact our
ability to provide our services, our future performance and results of operations.
We may face challenges retaining employees which could cause disruption to our integration plans and day-to-day
activities, which may result in additional costs to the business.
The attraction, development and retention of our talent is critical to the success of the Company, and we continue
to strengthen processes around these areas to minimise retention risk. The Company, led by the Chief Human Resource
Officer, is taking meaningful action to retain employees. Through our annual Talent Review process we have identified
opportunities for improvement as it relates to employee retention. Our People Plans have set specific goals for each
functional area in terms of three critical areas: talent attraction, development and retention. However, we can provide no
assurances that our efforts in this respect will be successful.
Our leadership and talent programs contribute to the enhanced retention of our employees, better project
deliverables for our customers and the enhanced financial performance of the business. We aim to be an industry leader: a
company where talented people come to do important work, a place where our employees can shape the future of
healthcare, grow their careers, and reach their full potential. We have long held a deep commitment to cultivating strong
people practices. This includes competitive total rewards packages along with a focus on continuous learning. Our success
depends on the knowledge, capabilities, and quality of our people.
Our ability to perform clinical trials is dependent upon the ability to recruit suitable willing patients.
The successful completion of clinical trials is dependent upon the ability to recruit suitable and willing patients on
which to test the drug under study. The availability of suitable patients for enrollment in studies is dependent upon many
factors including, amongst others, the size of the patient population, the design of the study protocol, eligibility criteria, the
referral practices of physicians, the perceived risks and benefits of the drug under study and the availability of alternative
medication, including medication undergoing separate clinical trials. Insufficient or inappropriate patient enrollment may
result in the termination or delay of a study which could have a material adverse impact on our results of operations.
The Company is focused on continuing to develop its expertise in patient recruitment with the establishment in
2020 of Accellacare, a global clinical research network, offering patients easier and faster access to innovative treatments
and offering customers the option to deploy decentralised trials. The focus is on making it easier for the site and the patient
to actively participate in a trial to ensure increased predictability, enrollment and retention. Our site and patient solutions
group includes upfront planning of site and patient management including identification, enrollment and engagement.
Improved site selection is achieved through:
•
•
•
leading technology to identify where the patients are that match the protocol;
assessment of the qualification of sites based on real data;
partnerships with leading technology vendors and developing the capability to enable Electronic Medical Record
(EMR) interrogation into clinical insights such as sub-populations and larger pre-screened pools where the
technology and regulations are enabled.
150
Appendix A: Risk Factors (continued)
The burden on the site, in ensuring patient enrollment and engagement, is achieved through integrated site
networks. ICON has a number of site alliance partners. During 2018, we enhanced our site and patient recruitment
capabilities with an expansion of the PMG Research network through a partnership with the DuPage Medical Group. During
2019, we further enhanced our site and patient recruitment abilities through the strategic acquisitions of MeDiNova and
CRN. In 2020, ICON announced the launch of Accellacare, a global clinical research network offering patients easier and
faster access to innovative treatments and offering customers the option to deploy decentralised trials. The site network
includes previously acquired PMG Research, MeDiNova and CRN. Also in 2020, we entered into an agreement to jointly
establish a new company, Oncacare Limited ("Oncacare"), with a third party. Oncacare operates as a specialised oncology
site network in the US and EMEA regions. This site network is focused on implementing a range of commercial models with
specialist oncology healthcare providers in the US and EMEA, to accelerate the recruitment and retention of patients into
oncology trials. The oncology site network was operated as a joint venture between the Company and a third party until April
2023, at which point the Company acquired the third party's interest in Oncacare such that Oncacare became a wholly-
owned subsidiary of the Company. We also use digital solutions to drive site performance, including pre-screening,
eConsent, learning management, document tracking and management with key applications.
Our ability to perform clinical trials is dependent upon our ability to recruit suitable willing investigators.
We contract with physicians located in hospitals, clinics or other similar sites, who serve as investigators in
conducting clinical trials to test new drugs on their patients. Investigators supervise administration of the study drug to
patients during the course of the clinical trial. The successful conduct of a clinical trial is dependent upon the integrity,
experience and capabilities of the investigators conducting the trial. Insufficient investigator recruitment, which in turn may
lead to insufficient or inappropriate patient enrollment, may result in the termination or delay of a study which could have a
material adverse impact on our results of operations.
Climate change, extreme weather events, earthquakes and other natural disasters could adversely affect our
business.
In recent years, extreme weather events and changing weather patterns such as storms, flooding, droughts and
temperature changes have become more common. As a result, we are potentially exposed to varying natural disaster or
extreme weather risks such as hurricanes, tornadoes, droughts or floods, or other events that may result from the impact of
climate change on the environment, such as sea level rise. As a result, we could experience increased costs, business
interruptions, destruction of facilities, and loss of life, all of which could have a material adverse effect on our business,
financial condition, or results of operations. The potential impacts of climate change may also include increased operating
costs associated with additional regulatory requirements and investments in reducing energy, water use and greenhouse
gas emissions.
A disease outbreak, epidemic or pandemic, such as COVID-19, could adversely affect our business performance.
A disease outbreak, such as influenza or coronavirus, could negatively impact our operations. We could experience
restrictions on our ability to travel, or the ability of patients or other service providers to travel, to monitor our clinical trials
and to ensure laboratory samples are collected and analyse don time as a result of an outbreak. The potential impact of an
epidemic or pandemic may also result in increased operating costs and result in a requirement to increase investment in
impact prevention. COVID-19 has affected, and may continue to affect, our business performance and could adversely
affect the economies and financial markets worldwide, resulting in an economic downturn that could impact our business,
financial condition and results of operations.
Our business depends on the continued effectiveness and availability of our information systems, including the
information systems we use to provide our services to our clients, and any system failures of, security breaches of
or cyber attacks to these systems may materially limit our operations or have a material adverse effect on our
results of operations.
Due to the global nature of our business and our reliance on information systems to provide our services, we use
web-enabled and other integrated information systems in delivering our services. We will continue to increase the use of
these systems and such systems will either be developed internally or provided in conjunction with third parties. We also
provide access to similar information systems to certain clients in connection with the services we provide them. As the use,
scope and complexity of our information systems continue to grow, we are exposed to, and will increasingly be exposed to,
the risks inherent in the development, integration and ongoing operation of evolving information systems, including:
•
•
disruption or failure of data centers, telecommunications facilities or other key infrastructure platforms;
security breaches, cyber attacks or other failures or malfunctions in our application or information systems or their
associated hardware or other systems that we have access to, or that we rely upon, or that have access to our
systems;
151 Appendix A: Risk Factors (continued)
•
•
security breaches, cyber attacks or malfunctions with key suppliers or partners who we rely on to provide services
to customers; and
excessive costs, excessive delays or other deficiencies in, or problems with, systems development and
deployment.
The materialisation of any of these risks may impede our ability to provide services, the processing of data, the
delivery of databases and services and the day-to-day management of our business and could result in the corruption, loss
or unauthorised disclosure of proprietary, confidential or other data, as well as reputational harm.
In addition, as Artificial Intelligence (“AI”) powered cyber threats evolve, our cybersecurity program strives to keep
pace through the development of advanced detection and mitigation mechanisms. However, the dynamic nature of AI-driven
attacks poses an ongoing challenge, as staying one step ahead requires constant adaptation and innovation in defensive
strategies to effectively protect the organisation against emerging threats.
While we have cybersecurity controls and disaster recovery plans in place, they might not adequately protect us in
the event of a system failure, security breach or cyber attack. To date, no cyber attacks have had a material impact on
operations or financial reporting. Additionally, despite any precautions we take, damage from fire, floods, hurricanes, power
loss, telecommunications failures, computer viruses, information system security breaches, cyber attacks and similar events
that impact our various computer facilities could result in interruptions in the flow of data to our servers and from our servers
to our clients. Corruption or loss of data may result in the need to repeat a trial at no cost to the client, but at significant cost
to us, or result in the termination of one or more contracts, legal proceedings or claims against us or damage to our
reputation. Additionally, significant delays in system enhancements or inadequate performance of new or upgraded systems
once completed could damage our reputation and harm our business. Long-term disruptions in the infrastructure caused by
events such as security breaches, cyber attacks, natural disasters, the outbreak of war, the escalation of hostilities and acts
of terrorism, particularly involving cities in which we have offices, could adversely affect our business.
Unauthorised disclosure of sensitive or confidential data, whether through system failure or employee negligence,
fraud or misappropriation, could damage our reputation and cause us to lose clients. Similarly, despite investing in
information and cybersecurity controls, there is a risk that unauthorised access to our information systems or those we
develop for our clients, whether by our employees or third parties, including a cyber attack by computer programmers and
hackers who may attack ICON systems, develop and deploy viruses, worms, ransomware or other malicious software
programs, could result in negative publicity, significant remediation costs, legal liability, loss of customers and damage to our
reputation and could have a material adverse effect on our results of operations and financial results. In addition, our liability
insurance might not be sufficient in type, the cover provided or amount to adequately cover us against claims related to
security breaches, cyber attacks and other related breaches.
We may also face cybersecurity risks due to our reliance on hybrid work arrangements, which could create
additional opportunities for cybercriminals to exploit vulnerabilities.
Upgrading the information systems that support our operating processes and evolving the technology platform for
our services pose risks to our business.
Continued efficient operation of our business requires that we implement standardised global business processes
and evolve our information systems to enable this implementation. We have continued to undertake significant programs to
optimise business processes with respect to our services. A failure to effectively manage the implementation and adapt to
new processes designed into these new or upgraded systems in a timely and cost-effective manner may result in disruption
to our business and negatively affect our operations.
We have entered into agreements with certain vendors to provide systems development and integration services
that develop or license to us the IT platform for programs to optimise our business processes. If such vendors fail to perform
as required or if there are substantial delays in developing, implementing and updating the IT platform, our customer
delivery may be impaired and we may have to make substantial further investments, internally or with third parties, to
achieve our objectives. Additionally, our progress may be limited by parties with existing or claimed patents who seek to
prevent us from using preferred technology or seek license payments from us.
Meeting our objectives is dependent on a number of factors which may not take place as we anticipate, including
obtaining adequate technology-enabled services, creating IT-enabled services that our customers will find desirable and
implementing our business model with respect to these services. We are continuing to develop opportunities for automation
across ICON using state of the art automation tools including Robotic Process Automation (RPA), the development of new
applications and capabilities, and enabling deeper integration across our digital ecosystem. To remain competitive within our
industry and keep pace with the rapid evolution of the technological landscape, it is critical that we continue to innovate and
expand the capabilities of our current technologies. This applies in particular to our ICONIK, Firecrest, ADDPLAN, Integrated
Dataverse (IDV®) and One Search services. Also, increased requirements for investment in information technology may
negatively impact our financial condition, including profitability.
152
Appendix A: Risk Factors (continued)
Failure to meet productivity objectives under our business improvement objectives could adversely impact our
competitiveness and therefore our operating results.
We continue to pursue business transformation initiatives to embed technology and innovation and deliver
operational efficiencies. As part of these initiatives, we seek to improve our productivity, flexibility, quality, functionality and
cost savings by our on-going investment in global technologies, continuous improvement of our business processes and
functions to deliver economies of scale. These initiatives may not deliver their intended gains or be completed in a timely
manner which may adversely impact our competitiveness and our ability to meet our growth objectives and therefore, could
adversely affect our business and operating results, including profitability.
We rely on our interactive response technologies to provide accurate information regarding the randomisation of
patients and the dosage required for patients enrolled in the trials.
We develop and maintain computer run and web based interactive response technologies to automatically manage
the randomisation of patients in trials, assign the study drug and adjust the dosage when required for patients enrolled in
trials we support. An error in the design, programming or validation of these systems could lead to inappropriate assignment
or dosing of patients, which could give rise to patient safety issues and invalidation of the trial and/or liability claims against
the Company, amongst other things, any of which could have a material effect on our financial condition and operations.
A failure to identify and successfully close and integrate strategic acquisition targets could adversely impact our
ongoing business and financial results.
We have made a number of acquisitions, including the Merger, and continue to review new acquisition
opportunities. If we are unable to identify suitable acquisition targets, complete an acquisition or successfully integrate an
acquired company or business, our business may be disrupted. The success of an acquisition will depend upon, among
other things, our ability to:
effectively and quickly assimilate the operations and services or products of the acquired company or business;
integrate acquired personnel;
retain and motivate key employees;
retain customers; and
•
•
•
•
• minimise the diversion of management's attention from other business concerns.
In the event that the operations of an acquired company or business do not meet our performance expectations,
we may have to restructure the acquired company or business or write-off the value of some, or all, of the assets of the
acquired company or business.
Improper performance of our services could adversely impact our reputation and our financial results.
The performance of clinical development services is complex and time-consuming. We or vendors we engage may
make mistakes in conducting a clinical trial that could negatively impact or damage the usefulness of the clinical trial or
cause the results to be reported improperly. If the clinical trial results are compromised, we could be subject to significant
costs or liability, which could have an adverse impact on our ability to perform our services. Large clinical trials are costly,
and while we endeavor to contractually limit our exposure to such risks, improper performance of our services could have an
adverse effect on our financial condition, damage our reputation and result in the cancellation of current contracts or failure
to obtain new contracts from affected or other clients.
Our relationships with existing or potential customers who are in competition with each other may adversely
impact the degree to which other customers or potential customers use our services, which may adversely affect
our results of operations.
The biopharmaceutical industry is highly competitive, with biopharmaceutical companies each seeking to persuade
payers, providers and patients that their drug therapies are better and more cost-effective than competing therapies
marketed or being developed by competing companies. In addition to the adverse competitive interests that
biopharmaceutical companies have with each other, biopharmaceutical companies also have adverse interests with respect
to drug selection and reimbursement with other participants in the healthcare industry, including payers and providers.
Biopharmaceutical companies also compete to be first to market with new drug therapies. We regularly provide services to
biopharmaceutical companies who compete with each other and we sometimes provide services to such customers
regarding competing drugs in development. Our existing or future relationships with our biopharmaceutical customers may
therefore deter other biopharmaceutical customers from using our services or may result in our customers seeking to place
limits on our ability to serve other biopharmaceutical industry participants. In addition, our further expansion into the broader
healthcare market may adversely impact our relationships with biopharmaceutical customers and such customers may elect
153
Appendix A: Risk Factors (continued)
not to use our services, reduce the scope of services that we provide to them or seek to place restrictions on our ability to
serve customers in the broader healthcare market with interests that are adverse to theirs. Any loss of customers or
reductions in the level of revenues from a customer could have a material adverse effect on our results of operations,
business and prospects.
We have only a limited ability to protect our intellectual property rights and these rights are important to our
success.
Our success depends, in part, upon our ability to develop, use and protect our proprietary methodologies,
analytics, systems, technologies and other intellectual property. Existing laws of the various countries in which we provide
services or solutions offer only limited protection of our intellectual property rights and the protection in some countries may
be very limited. We rely upon a combination of trade secrets, confidentiality policies, non-disclosure, invention assignment
and other contractual arrangements and patent, copyright and trademark laws, to protect our intellectual property rights.
These laws are subject to change at any time and certain agreements may not be fully enforceable, which could further
restrict our ability to protect our innovations. Intellectual property rights may not prevent competitors from independently
developing services similar to, or duplicative of, ours. Further, the steps we take in this regard might not be adequate to
prevent or deter infringement or other misappropriation of our intellectual property by competitors, former employees or
other third parties and we might not be able to detect unauthorised use of, or take appropriate and timely steps to enforce
our intellectual property rights. Enforcing our rights might also require considerable time, money and oversight and we may
not be successful in enforcing our rights.
The biopharmaceutical industry has a history of patent and other intellectual property litigation and we might be
involved in costly intellectual property lawsuits.
The biopharmaceutical industry has a history of intellectual property litigation, and these lawsuits will likely continue
in the future. Accordingly, we may face patent infringement legal proceedings by companies that have patents for similar
business processes or other legal proceedings alleging infringement of their intellectual property rights. Legal proceedings
relating to intellectual property could be expensive, take significant time and divert management’s attention from other
business concerns, regardless of the outcome of the litigation. If we do not prevail in an infringement lawsuit brought against
us, we might have to pay damages and we could be required to stop the infringing activity or obtain a license to use
technology on unfavorable terms. Any infringement or other legal processing related to intellectual property could have a
material adverse effect on our operations and financial condition.
We act as authorised representative or legal representative for some clients pursuant to certain jurisdictional
requirements for sponsors of clinical trials to appoint an authorised representative or legal representative with a
local presence within the relevant jurisdiction.
We act as authorised representative pursuant to Medical Devices Directive 93/42/EEC (“MDD”), Medical Devices
Regulation 2017/745 (“MDR”) and Active Implantable Medical Devices Directive 90/385/EEC (“AIMD”) for certain clients who
are located outside of the European Union. As authorised representative, we act on behalf of medical device manufacturers
in relation to specified tasks with regard to their obligations under MDR.
We also act as legal representative pursuant to European Clinical Trials Directive (2021/20/EC) (“CTD”), EU
Clinical Trials Regulation (No.536/2014) (“CTR”), MDD, MDR and AIMD, for certain clients who are located outside of the
European Union with respect to clinical trials being carried out by those clients in the European Union. We also perform
similar legal representative services for certain clients in other non-EU jurisdictions, where the client is located outside the
relevant local jurisdiction, ICON has an established local legal entity in that jurisdiction and analogous local regulations have
a similar requirement for a local legal representative for clinical trials being carried out in those jurisdictions. As legal
representative, we are responsible for ensuring compliance with the client’s obligations pursuant to CTD, CTR and MDR or
analogous local legislation and we are the addressee for all communications with the client provided for under CTD, CTR
and MDR or analogous local legislation.
We provide these services subject to certain terms and conditions which are contained in our agreements with
clients pertaining to these services. We aim to reduce any potential liability associated with these activities by seeking
contractual indemnification from our clients and by maintaining an appropriate level of insurance cover. However, there is no
guarantee that the specific insurance will be available or that a client will fulfill its obligations in relation to their indemnity.
154 Appendix A: Risk Factors (continued)
We rely on third parties to provide certain data and other information to us. Our suppliers or providers might
increase our cost to obtain, restrict our use of, or refuse to license data, which could lead to our inability to access
certain data or provide certain services and, as a result, materially and adversely affect our operating results and
financial condition.
Our services are derived from, or include, the use of data we collect from third parties. We have several data
suppliers that provide us with a broad and diverse scope of information that we collect, use in our business and sell.
We generally enter into long-term contractual arrangements with many of our data suppliers. At the time we enter
into a new data supply contract or renew an existing contract, suppliers may increase our cost to obtain and use the data
provided by such supplier, increase restrictions on our ability to use or sell such data, or altogether refuse to license the data
to us. Also, our data suppliers may fail to meet or adhere to our quality control standards or fail to deliver the data to us.
Although no single supplier is material to our business, if suppliers that collectively provide a significant amount of the data
we receive or use were to increase our costs to obtain or use such data, further restrict our access to or use of such data,
fail to meet or adhere to our quality control standards, refuse to provide or fail to deliver data to us, our ability to provide
data-dependent services to our clients may be adversely impacted, which could have a material adverse effect on our
business, results of operations, financial condition or cash flow.
We rely on third parties for important products, services and licenses to certain technology and intellectual
property rights. If there was failure in delivery by these parties, we might not be able to continue to obtain such
products, services and licenses.
We depend on certain third parties to provide us with products and services critical to our business. Such services
include, among others, suppliers of drugs for patients participating in trials, suppliers of kits for use in our laboratories,
suppliers of reagents for use in our testing equipment and providers of maintenance services for our equipment. The failure
of any of these third parties to adequately provide the required products or services, or to do so in compliance with
applicable regulatory requirements, could have a material adverse effect on our business.
Some of our services rely on intellectual property, technology and other similar property owned and/or controlled by
third parties. Our licenses to this property and technology could terminate or expire and we might not be able to replace
these licenses in a timely manner. Also, we might not be able to renew these licenses on similar terms and conditions.
Failure to renew these licenses, or renewals of these licenses on less advantageous terms, could have a material adverse
effect on our business, results of operations, financial condition or cash flow.
Risk Related to Our Industry
Outsourcing trends in the pharmaceutical, biotechnology and medical device industries and changes in spending
on research and development could adversely affect our operating results and growth rates.
We are dependent upon the ability and willingness of the pharmaceutical, biotechnology and medical device
companies to continue to spend on research and development and to outsource the services that we provide. We are
therefore subject to risks, uncertainties and trends that affect companies in these industries that we do not control. We have
benefited to date from the tendency of pharmaceutical, biotechnology and medical device companies to outsource clinical
research projects. Any downturn in these industries or reduction in spending or outsourcing could materially adversely affect
our business. The following could each result in such a downturn:
•
•
•
if pharmaceutical, biotechnology or medical device companies expanded upon their in-house clinical or
development capabilities, they would be less likely to utilise our services;
if governmental regulations were changed, it could affect the ability of our clients to operate profitably, which may
lead to a decrease in research spending and therefore this could have a material adverse effect on our business;
and
if unfavorable economic conditions or disruptions in the credit and capital markets negatively impacted our clients.
Large pharmaceutical companies are increasingly consolidating their vendor base and entering strategic
partnership arrangements with a limited number of outsource providers.
Large pharmaceutical companies are continually seeking to drive efficiencies in their development processes to
both reduce costs associated with the development of new drug candidates and accelerate time to market. As a result, large
pharmaceutical companies, in particular, are increasingly looking to consolidate the number of outsource providers with
which they engage, with many entering strategic partnership arrangements with a limited number of outsource
providers. The failure to enter strategic partnership arrangements with customers or the loss of existing customers as a
155
Appendix A: Risk Factors (continued)
result of them entering strategic partnership arrangements with our competitors could have a material adverse impact on our
results of operations.
Increased collaboration amongst pharmaceutical companies in research and development activities may lead to
fewer research opportunities.
Certain pharmaceutical companies have begun to collaborate in seeking to develop new drug candidates.
Increased collaboration amongst pharmaceutical companies may lead to fewer research opportunities, which in turn may
lead to fewer outsource opportunities for companies within the CRO industry. A reduction in outsource opportunities as a
result of this increased collaboration could have a material adverse impact on our results of operations.
We operate in a highly competitive and dynamic market.
The CRO industry is highly competitive. In particular, we compete with other large global CROs for strategic
relationships with large pharmaceutical companies. If we are unable to retain and renew existing strategic relationships and
win new strategic relationships, there could be a material adverse impact on our results. Similarly, we compete with other
CROs for work which comes outside of these strategic relationships and being unable to win work outside of these strategic
relationships could have a material adverse impact on our results.
The type and depth of services provided by CROs has changed in recent years. Failure to develop and market new
services or expand existing service offerings could adversely affect our business and operations.
New entrants may also enter the market which would further increase competition and could adversely affect our
business and operations.
We may be adversely affected by industry, customer or therapeutic concentration.
We provide services to biopharmaceutical, biotechnology, medical device and government organisations and our
revenue is dependent on expenditures by these customers. Our business could therefore be adversely impacted by
mergers, consolidation, business failures, distress in financial markets or other factors resulting in a decrease in the number
of potential customers or therapeutic products being developed through the drug development progress. There has been
consolidation in the biopharmaceutical market in recent years. If the number of our potential customers were to decline in
the future, they may be able to negotiate price discounts or other terms for services that are less favorable to us than they
have been historically.
Risk Related to Our Financial Results and Financial Position
Our quarterly results are dependent upon a number of factors and can fluctuate from quarter to quarter. They may
fall short of prior periods, our projections or the expectations of securities analysts or investors, which may
adversely affect the market price of our stock.
Our results of operations in any quarter can fluctuate or differ from expected or forecast results depending upon or
due to, among other things, the number and scope of ongoing client projects, the commencement, postponement,
variation, cancellation or termination of projects in a quarter, the mix of activity, cost overruns, employee hiring, employee
attrition and other factors. Our revenue in any period is directly related to the number of employees who were working on
billable projects together with investigator activity during that period. We may be unable to compensate for periods of under-
utilisation during one part of a fiscal period by earning revenue during another part of that period. We believe that operating
results for any particular quarter are not necessarily a meaningful indicator of future results.
Also, if in future quarters, we are unable to continue to deliver operational efficiencies and our expenses grow
faster than our revenues, our operating margins, profitability and overall financial condition may be materially adversely
impacted.
156 Appendix A: Risk Factors (continued)
Our exposure to exchange rate fluctuations could adversely affect our future results of operations.
Our contracts with clients are sometimes denominated in currencies other than the currency in which we incur
expenses related to such contracts. Where expenses are incurred in currencies other than those in which contracts are
priced, fluctuations in the relative value of those currencies could have a material adverse effect on our results of
operations.
In addition, we are also subject to translation exposures as our consolidated financial results are presented in U.S.
dollars, while the local results of a certain number of our subsidiaries are prepared in currencies other than U.S. dollars,
including, amongst others, the pound sterling and the euro. Accordingly, changes in exchange rates between the U.S. dollar
and those other currencies will affect the translation of subsidiary companies' financial results into U.S. dollars in reporting
our consolidated financial results.
Inflation and rising labor costs could adversely affect our future results of operations.
Inflation and rising labor costs may result in significant increases to the cost of our services, which we may not be
able to recover from our customers. Our contracts with clients are often fixed price or fixed price-per-unit contracts. If
macroeconomic forces, such as inflation, cause the cost of inputs required to deliver these contracts to increase
significantly, we may be unable to pass along these cost to our customers. A sustained increase in these costs may require
us to increase the price of future service offerings. These actions could adversely affect our future revenue, gross margin, or
both.
Our effective tax rate may fluctuate from quarter-to-quarter, which may adversely affect our results of operations.
Our quarterly effective tax rate has depended and will continue to depend on the geographic distribution of our
taxable earnings amongst the multiple tax jurisdictions (such as Ireland, United States and United Kingdom) in which we
operate and the tax laws in those jurisdictions. Changes in the geographic mix of our results of operations amongst these
jurisdictions may have a significant impact on our effective tax rate from quarter-to-quarter. Changes in tax law in one or
more jurisdictions could also have a significant impact on our tax rate and results. In addition, as we operate in multiple tax
jurisdictions, we may be subject to audits in certain jurisdictions. These audits may involve complex issues which could
require an extended time period before being resolved. The resolution of audit issues may lead to additional taxes, interest
as well as fines and/or penalties being imposed which could have a material adverse impact on our effective tax rate and
our consolidated financial results.
In terms of recent legislative changes which could potentially impact our effective tax rate, on August 16, 2022, the
U.S. government enacted the Inflation Reduction Act of 2022 ("IRA"). The IRA introduced a 15% minimum tax on book
income of certain large corporations, a 1% excise tax on net stock repurchases, and several tax incentives to promote clean
energy, with those tax changes becoming effective in 2023. While these changes did not have any impact on the Company
for the year ended 31 December 2023, we are continuing to monitor any potential future tax impacts in this regard.
In terms of a global minimum tax rate, the organisation for Economic Co-operation and Development's ("OECD")
Global Anti-Base Erosion ("GloBE") Model Rules proposed a global minimum tax rate of 15% and recommended that it be
effective from 2024. European Union member states adopted a global minimum tax in December 2022 and member states
were obliged to implement the rules by 31 December 2023, which impact large multinational groups with a consolidated
revenue of over €750 million. Although there is no assurance that every country in which ICON has a presence will
implement GloBE, where a particular jurisdiction has a minimum effective tax rate of less than 15%, the head office location
may be obliged to pay a top-up tax. Ireland has also recently implemented global minimum tax legislation which will apply
from 2024. The global tax environment is becoming increasingly complex and management continues to review the impact
of a global minimum tax on the Company’s financial performance.
Our unsatisfied performance obligation may not convert to revenue and the rate of conversion may slow.
Our unsatisfied performance obligation is the amount of awards that has not yet converted to revenue. This value
is not necessarily a meaningful predictor of future results due to the potential for the cancellation or delay of projects
included in the unsatisfied performance obligation. No assurances can be given that we will be able to realise this
unsatisfied performance obligation in full as revenue. A failure to realise these awards could have a material adverse impact
on our results of operations. In addition, as the length and complexity of projects increases, the rate at which awards convert
to revenue may be slower than in the past. A significant reduction in the rate of conversion could have a material impact on
our results of operations.
157 Appendix A: Risk Factors (continued)
The Company is exposed to various risks in relation to our cash and cash equivalents and short term investments.
The Company’s treasury function manages our available cash resources and invests significant cash balances in
various financial institutions to try to ensure optimum returns for our surplus cash balances. These balances are classified
as cash and cash equivalents, or short term investments, depending on the maturity of the related investment. Cash and
cash equivalents comprise cash and highly liquid investments with maturities of three months or less. Short term
investments comprise highly liquid investments with maturities of greater than three months and minimum “A-” rated fixed
and floating rate securities.
Given the global nature of our business, we are exposed to various risks in relation to these balances including
liquidity risk, credit risk associated with the counterparties with whom we invest, interest rate risk on floating rate securities,
sovereign risk (our principle sovereign risk relates to investments in U.S. Treasury funds) and other factors.
Although we have not recognised any significant losses to date on our cash and cash equivalents or short term
investments, any significant declines in their market values could have a material adverse effect on our financial position
and operating results.
Changes in accounting standards may adversely affect our financial statements.
We prepare our financial statements in accordance with generally accepted accounting principles in the United
States of America ("U.S. GAAP") which are revised on an on-going basis by the authoritative bodies. It is possible that future
accounting standard updates may require changes to the accounting treatment that we apply in preparation of our financial
statements. These changes may also require significant changes to our reporting systems. These updates may result in
unexpected variability in the timing of recognition of revenue or expenses and therefore in our operating results.
Risk Related to Our Indebtedness
We have incurred substantial additional indebtedness in connection with the Merger, which could impair our
flexibility and access to capital and could adversely affect the Company’s business, financial condition or results
of operations.
Following completion of the Merger and the other transactions contemplated by the Merger Agreement, the
Company has a substantial amount of debt. ICON borrowed approximately $6,015.0 million in order to pay PRA
stockholders the cash consideration due to them as merger consideration under the Merger Agreement, pay related fees
and transaction costs in connection with the transactions, and refinance existing indebtedness. The total remaining
transaction related debt balance at 31 December 2023 was $3,751.2 million. This level of borrowings could adversely affect
the Company in a number of ways, including, but not limited to, causing us to incur substantial fees from time to time in
connection with debt amendments or refinancing, making it more difficult for the Company to satisfy its obligations with
respect to its debt or to its trade or other creditors, requiring a substantial portion of the Company’s cash flows from
operations for the payment of interest on the Company’s debt, reducing the Company’s flexibility to respond to changing
business and economic conditions, and reducing funds available for the Company’s investments in research and
development, capital expenditures and other activities. If ICON cannot service its debt, it may have to take actions such as
selling assets, seeking additional debt or equity, or reducing or delaying capital expenditures, strategic acquisitions,
investments and alliances.
Covenants in our credit agreement and the indenture governing the Senior Secured Notes may restrict our
business and operations. Our financial condition and results of operations could be adversely affected if we do not
comply with those covenants.
The Senior Secured Credit Facilities and the indenture include certain customary covenants that limit our ability to,
amongst other things, subject to certain exceptions:
• make dividends, investments and other restricted payments;
•
•
•
•
•
enter into sale and leaseback transactions;
engage in share buybacks;
incur or assume liens or additional debt;
engage in mergers or reorganisations; or
enter into certain types of transactions with affiliates.
158
Appendix A: Risk Factors (continued)
On December 8, 2023, ICON notified the holders of the Senior Secured Notes of the upgrade of the instrument
rating to investment grade and the consequent suspension of certain of the covenants under the Indenture. The suspension
of these covenants remains in place so long as the instrument remains at investment grade.
The revolving credit facility also includes a financial covenant that requires us to comply with a maximum
consolidated leverage ratio. Our ability to comply with this financial covenant may be affected by events beyond our control.
Interest rate fluctuations may materially adversely affect our results of operations and financial conditions due to
the variable interest rate on our senior secured term loan facility, our revolving credit facility or in respect of any
future issuances of debt.
Borrowings under the senior secured term loan facility amortise in equal quarterly installments in an amount equal
to 1.00% per annum of the original principal amount, with the remaining balance due at final maturity. The interest rate
margin applicable to borrowings under the senior secured term loan facility is USD Term SOFR and a Term SOFR
Adjustment depending on the interest period chosen plus an applicable margin of 2.25%. The senior secured term loan
facility is subject to a floor of 0.50%.
The interest rate margin applicable to borrowings under the revolving loan facility will be, at the option of the
borrower, either (i) the applicable base rate plus an applicable margin of 1.00%, 0.60% or 0.25% based on ICON’s current
corporate family rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively, or (ii) Term SOFR plus a
Term SOFR Adjustment on the interest period chosen plus an applicable margin of 2.00%, 1.60% or 1.25% based on
ICON’s current corporate family rating assigned by S&P of BB- (or lower), BB or BB+ (or higher), respectively. In addition,
lenders under the revolving loan facility are entitled to commitment fees as a percentage of the applicable margin at the time
of drawing and utilisation fees dependent on the proportion of the facility drawn. At 31 December 2023, $55.0 million was
outstanding under the revolving loan facility while there was also $3.7 million (2022: $4.5 million) in letters of credit given to
landlords to guarantee lease arrangements.
Because the Company has variable rate debt, fluctuations in interest rates affect our business. We attempt to
minimise interest rate risk and lower our overall borrowing costs through the utilisation of interest rate cap and interest rate
swap derivative financial instruments. We have entered into certain interest rate cap and interest rate swap agreements with
three financial institutions with respect to a portion of our outstanding debt. Accordingly, any change in market value
associated with these agreements may be offset by the opposite market impact on the portion of the debt covered by such
agreements.
Risk Related to Political, Legal or Regulatory Environment
We may lose business opportunities as a result of healthcare reform and the expansion of managed care
organisations.
Numerous governments, including the U.S. government, have undertaken efforts to control growing healthcare
costs through legislation, regulation and voluntary agreements with medical care providers and drug companies. If these
efforts are successful, pharmaceutical, biotechnology and medical device companies may react by spending less on
research and development and therefore this could have a material adverse effect on our business.
In addition to healthcare reform proposals, the expansion of managed care organisations in the health care market
may result in reduced spending on research and development. Managed care organisations' efforts to cut costs by limiting
expenditures on pharmaceuticals and medical devices could result in pharmaceutical, biotechnology and medical device
companies spending less on research and development. If this were to occur, we would have fewer business opportunities
and our revenues could decrease, possibly materially.
Healthcare reform legislation, other changes in the healthcare industry and in healthcare spending could adversely
affect our business model, financial condition or results of operations.
Our results of operations and financial conditions could be affected by changes in healthcare spending and policy.
The healthcare industry is subject to changing political, regulatory and other influences. It is possible that legislation will be
introduced and passed in the United States repealing, modifying or invalidating the current healthcare reform legislation, in
whole or in part, and signed into law. Because of the continued uncertainty about the implementation of the current
healthcare reform legislation, including the potential for further legal challenges or repeal of that legislation, we cannot
quantify or predict with any certainty the likely impact of the current healthcare reform legislation or its repeal on the
healthcare sector, on our customers and ultimately on our financial condition or results of operations.
159
Appendix A: Risk Factors (continued)
As previously noted, on August 16, 2022, the U.S. government enacted the IRA, which among other things,
authorises the U.S. Department of Health and Human Services to establish prices for certain single-source drugs and
biologics within the Medicare program, commencing in 2026. Furthermore, the IRA contains provisions which impose rebate
obligations on manufacturers if price increases outpace inflation. While the full impact of these IRA provisions on our
customers in the biopharmaceutical industry remains somewhat uncertain, any resultant pressure on our customers’
operating results could lead to a reduction in research and development spend and related outsourcing activities, which
could have an adverse impact on our operating results and financial condition.
Our international operations expose us to risks as a result of changes in global political conditions which could
adversely affect our results of operations.
Political and/or financial instability and armed conflict in various regions of the world, including, but not limited to,
Ukraine, Israel and the conflict area in the Middle East, can lead to sanctions, economic uncertainty and currency exchange
rate fluctuations and may interrupt our operations in those areas, which may adversely impact our results of operations. The
current conflict in Ukraine has led to, among other things, hardship and the imposition of international economic sanctions
aimed at the region. While the situation is subject to change, there remains the possibility of additional and harsher
sanctions if the conflict intensifies. If that were to happen, our operations in the region may be severely curtailed or
eliminated, which could adversely affect our results of operations. In addition, if the current unrest broadens or further
escalates, our operations may be severely curtailed, which could adversely affect our results of operations.
We continue to monitor developments in Israel and the conflict area in the Middle East. Further broadening or
escalation of the conflict, or the imposition of international economic sanctions, could adversely affect our results of
operations.
We may lose business as a result of changes in the regulatory environment.
Various regulatory bodies throughout the world may enact legislation, rules and guidance which could introduce
changes to the regulatory environment for drug development and research. The adoption and implementation of such
legislation, rules and guidance is difficult to predict and therefore could have a material adverse effect on our business.
Failure to comply with the regulations and requirements of the U.S. Food and Drug Administration and other
regulatory authorities could result in substantial penalties and/or loss of business.
The U.S. Food and Drug Administration, ("FDA"), and other regulatory and government authorities and agencies
inspect and audit us from time to time to ensure that we comply with their regulations and guidelines, including
environmental, health and safety matters, and other requirements imposed in connection with the performance of
government contracts. We must comply with the applicable regulatory requirements governing the conduct of clinical trials
and contracting with the government in all countries in which we operate.
If we or vendors we engage fail to comply with any of these requirements we could suffer some or all of:
•
•
•
•
•
•
•
•
termination of or delay in any research;
disqualification of data;
denial of the right to conduct business;
criminal penalties;
financial penalties;
other enforcement actions including debarment from government contracts;
loss of clients and/or business; and
litigation from clients and/or patients and/or regulatory authorities and/or other affected third parties, and
resulting material penalties, damages and costs.
160 Appendix A: Risk Factors (continued)
We are subject to political, regulatory, operational and legal risks associated with our international operations.
We are one of a small group of organisations with the capability and expertise to conduct clinical trials on a global
basis. We believe that this capability to provide our services globally in most major and developing pharmaceutical markets
enhances our ability to compete for new business from large multinational pharmaceutical, biotechnology and medical
device companies. We have expanded geographically in the past and intend to continue expanding in regions that have the
potential to increase our client base or increase our investigator and patient populations. We expect that revenues earned in
emerging markets will continue to account for an increasing portion of our total revenues. However, emerging market
operations may present several risks, including civil disturbances, health concerns, cultural differences such as employment,
regulatory and business practices, compliance with economic sanctions laws and regulations, volatility in gross domestic
product, economic and governmental instability, the potential for nationalisation of private assets and the imposition of
exchange controls. In addition, operating globally means the Company faces the challenges associated with coordinating its
services across different countries, time zones and cultures.
Changes in the political and regulatory environment in the international markets in which we operate such as price
or exchange controls could impact our revenue and profitability and could lead to penalties, sanctions and reputational
damages if we are not compliant with those regulations. Political uncertainty and a lack of institutional continuity in some of
the emerging, developing or other countries in which we operate could affect the orderly operation of markets in these
economies. In addition, in countries with a large and complicated structure of government and administration, national,
regional, local and other governmental bodies may issue inconsistent decisions and opinions that could increase our cost of
regulatory compliance and/or have a material adverse effect on our business. The ongoing conflict in Ukraine has resulted in
an increasingly complex economic sanctions and export controls environment applicable to our business operations in the
region (including Russia and Belarus) as a result of additional trade compliance measures enacted by the United States,
United Kingdom and European Union member states. These economic sanctions and export controls restrict our ability to
do business with sanctioned entities, require additional compliance resources, and could have a material adverse effect on
the results of our operations.
Uncertainty of the legal environment in some emerging countries could also limit our ability to enforce our rights. In
certain emerging and developing countries we enjoy less comprehensive protection for some of our rights, including
intellectual property rights, which could undermine our competitive position. Proceedings to enforce our future patent rights,
if any, in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our
business.
If any of the above risks or similar risks associated with our international operations were to materialise, our results
of operations and financial condition could be materially adversely affected.
We operate in many different jurisdictions and we could be adversely affected by violations of anti-corruption laws,
including the United States Foreign Corrupt Practices Act of 1977 ("FCPA"), UK Bribery Act of 2010 ("UK Bribery
Act") and similar anti-corruption laws in other jurisdictions as well as laws and regulations relating to trade
compliance and economic sanctions.
The FCPA, UK Bribery Act and similar anti-corruption laws in other jurisdictions prohibit us and our officers,
directors, employees and third parties acting on our behalf, including agents, from corruptly offering, promising, authorising,
or providing anything of value to a "foreign official" for the purposes of influencing official decisions or obtaining or retaining
business or otherwise obtaining favorable treatment. In addition, the FCPA imposes certain books, records and accounting
control obligations on public companies and other issuers. The UK Bribery Act also prohibits "commercial" bribery and
accepting bribes.
Our global business operations also must be conducted in compliance with applicable export controls and
economic sanctions laws and regulations, including those administered by the U.S. Department of the Treasury’s (the “U.S.
Treasury”) Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United
Nations Security Council, the European Union, His Majesty’s Treasury and other relevant trade compliance authorities.
161 Appendix A: Risk Factors (continued)
Our internal policies mandate compliance with these anti-corruption and trade compliance laws and regulations.
We also operate in many jurisdictions in which bribery or corruption can be common and compliance with anti-bribery laws
may conflict with local customs and practices. Despite our training and compliance program safeguards, we cannot assure
that our internal control policies, procedures and safeguards will protect us from acts in violation of anti-corruption and trade
compliance laws and regulations committed by employees or other third parties associated with us and our continued
expansion, including in developing countries, could increase such risk in the future. Violations of anti-corruption, economic
sanctions and trade control laws and regulations, or even allegations of such violations, could disrupt our business and
result in a material adverse effect on our financial condition, results of operations, cash flows and reputation. For example,
violations of anti-corruption and trade compliance laws can result in restatements of, or irregularities in, our financial
statements, disgorgement of profits, related stockholder lawsuits as well as severe criminal or civil sanctions. In some
cases, companies that violate anti-corruption and trade compliance laws might be debarred by the U.S. government and/or
lose their U.S. export privileges. In addition, the U.S. government or other governments may seek to hold us liable based on
successor liability for violations of anti-corruption and trade compliance laws committed by companies that we acquire or in
which we invest. Changes in anti-corruption and trade compliance laws or enforcement priorities could also result in
increased compliance requirements and related costs which could materially adversely affect our business, financial
condition, results of operations and cash flows. The recent increase in economic sanctions and trade controls, particularly
relating to our ongoing operations in Russia, Ukraine and Belarus, has increased the amount of resources necessary to
ensure compliance in this area.
Current and proposed laws and regulations regarding the protection of personal data could result in increased
risks of liability or increased costs to us or could limit our service offerings.
ICON has a strong privacy posture, driven by the implementation of a core privacy governance strategy and the
adoption of policies and procedures designed to help ensure that ICON, including our employees and contractors, can
comply with applicable data protection laws (including, but not limited to, the General Data Protection Regulation (“GDPR”)
(EU) 2016/679). Notwithstanding these measures, failure to comply with applicable data protection laws may occur and
could result in increased risk of liability or increased costs to us or could limit our service offerings.
Administrative fines. The GDPR introduced a new regime of administrative fines for data protection infringements
and provided for a tiered penalty structure based on the nature of the infringement. The EU supervisory authorities for the
GDPR can directly impose fines on organisations found to be in breach of the GDPR. Lower tier administrative fines allow
for fines of up to 2% of worldwide turnover of the group in the preceding financial year. Higher tier administrative fines allow
for fines of up to 4% of worldwide turnover of the group in the preceding financial year. Higher tier administrative fines are
more likely to be levied for major infringements of the GDPR and core data protection principles (e.g. transparency, data
retention, accountability).
Penalties. The GDPR also permits Member States to implement rules on other penalties applicable to
infringements of the GDPR, in particular, for infringements which are not subject to administrative fines under the GDPR
itself. Therefore, Member States may legislate for further fines or penalties that may be criminal in nature.
Any fines levied under the GDPR must be effective, proportionate, and dissuasive. Supervisory authorities have
been strengthening enforcement activities across the EU in recent years in respect of breaches of GDPR. The risk of fines
and penalties under the GDPR carries increased risk of liability to ICON and can result in increased costs and disruption to
the delivery of our services.
Right to compensation of data subjects. In addition to the risk of administrative and criminal penalties, the GDPR
also provides that any person who has suffered material or non-material damage as a result of an infringement of the GDPR
shall have the right to receive compensation for the damage suffered, from the controller or processor responsible for the
infringement. The level of award of damages is set by the competent court in the applicable EU Member State. This carries
increased risk of liability for ICON.
Corrective Powers of the supervisory authorities. Each supervisory authority across the Member States of the EU
also has corrective powers. Supervisory authorities have the power to order ICON to bring processing operations into
compliance with the provisions of the GDPR in a specified manner within a specified time period, or to impose a temporary
or definitive limitation including a ban on processing, and to order the suspension of data flows to a recipient in a third
country or to an international organisation. Supervisory authorities also have powers to conduct audits and investigations of
ICON and instruct ICON to take certain actions. The exercise of these powers by supervisory authorities has the potential to
increase costs for ICON and cause disruption to the business and delivery of our services.
162 Appendix A: Risk Factors (continued)
From a US perspective, the confidentiality, collection, use and disclosure of personal data, including clinical trial
patient-specific information, is subject to governmental regulation generally in the country that the personal data was
collected or used. For example, United States federal regulations under the Health Insurance Portability and Accountability
Act of 1996, or ("HIPAA"), and as amended in 2014 by the Health Information Technology for Economic and Clinical Health
(“HITECH”) Act, require individuals’ written authorisation, in addition to any required informed consent, before Protected
Health Information may be used for research. HIPAA specifies standards for de-identifications and for limited data sets. We
are both directly and indirectly affected by the privacy provisions surrounding individual authorisations because many
investigators and organisations with whom we are involved in clinical trials and in our other services are directly subject to
them as a HIPAA “covered entity” and because we obtain identifiable health information from third parties that are subject to
such regulations. As there are some instances where we are a HIPAA “business associate” of a “covered entity”, we can
also be directly liable to the covered entity contractually for mishandling protected health information and, under HIPAA’s
enforcement scheme, we can be subject to up to $1.9 million per year in civil money penalties for identical HIPAA violations.
The per violation penalties and calendar year cap on penalties are adjusted annually for inflation under the Federal Civil
Penalties Inflation Adjustment Act.
The foundational principles of the GDPR have helped shape the development of many other privacy laws globally.
Internationally, data protection laws continue to be introduced at a rapid rate, with greater protections afforded to personal
data than ever before, and greater risk of liability to organisations processing that personal data. As a global organisation,
ICON must ensure that our privacy posture continues to adapt to these new laws and regulations.
Additional legislation or regulation of this type might, among other things, require us to implement new security
measures and processes which may require substantial expenditures or limit our ability to offer some of our services.
Additionally, if we violate applicable laws, regulations or duties relating to the use, processing or security of personal data,
we could be subject to civil liability or criminal prosecution, be forced to alter our business practices or suffer reputational
harm.
Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory
standards and requirements, which could have a material adverse effect on our business.
We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include
intentional failures to comply with governmental regulations, comply with federal and state healthcare fraud and abuse laws
and regulations, report financial information or data accurately or disclose unauthorised activities to us. In particular, sales,
marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to
prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a
wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other
business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of
clinical studies or data or documentation fraud or manipulation, which could result in regulatory sanctions and serious harm
to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect
and prevent misconduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from
governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or
regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our
rights, those actions could have a significant impact on our business and results of operations, including the imposition of
significant fines or other sanctions.
The failure to comply with our government contracts or applicable laws and regulations could result in, among
other things, fines or other liabilities, and changes in procurement regulations could adversely impact our
business, results of operations or cash flows.
Revenues from our government customers are derived from sales to federal, state and local governmental
departments and agencies through various contracts. Sales to public segment customers are highly regulated.
Noncompliance with contract provisions, government procurement regulations or other applicable laws or regulations
(including but not limited to the False Claims Act) could result in civil, criminal and administrative liability, including
substantial monetary fines or damages, termination of government contracts or other public segment customer contracts,
and suspension, debarment or ineligibility from doing business with the government and other customers in the public
segment. In addition, generally contracts in the public segment are terminable at any time for convenience of the contracting
agency or upon default. The effect of any of these possible actions by any governmental department or agency could
adversely affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement
regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a
negative effect on our business, results of operations or cash flows.
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Appendix A: Risk Factors (continued)
Liability claims brought against us could result in payment of substantial damages, costs and liabilities and
decrease our profitability.
We may face legal claims involving stockholders, consumers, clinical trial subjects, competitors, regulators and
other parties. See 'Legal Proceedings' in Part A, Item 8 of this Form 20-F. Litigation and other legal proceedings are
inherently uncertain, and adverse rulings could occur, including monetary damages, or an injunction stopping us from
engaging in business practices, or requiring other remedies, including, but not limited to, compulsory licensing of patents.
Customer Claims
If we breach the terms of an agreement with a customer (for example if we fail to comply with the agreement, all
applicable regulations or Good Clinical Practice) this could result in claims against us for substantial damages which could
have a material adverse effect on our business. As we provide staff to deliver our services, there is a risk that our
management, quality and control structures fail to quickly detect a failure by one or more employees or contractors to
comply with all applicable regulations and Good Clinical Practice and our internal requirements and standard operating
procedures thereby exposing us to the risk of claims by customers.
Claims relating to Investigators
We contract with physicians who serve as investigators in conducting clinical trials to test new drugs on their
patients. These patients will generally have underlying health conditions and this testing creates the risk of liability for
personal injury to the patient or the risk of a serious adverse event occurring. Although investigators are generally required
by law to maintain their own liability insurance, we could be named in lawsuits and incur expenses arising from any
professional malpractice or other actions brought against the investigators with whom we contract.
Indemnification from Customers
Indemnifications provided by our customers against the risk of liability for personal injury to or death of the patients
arising from a study drug vary from customer to customer and from trial to trial and may not be sufficient in scope or amount,
or our customer may not have the financial ability to fulfill their indemnification obligations. Furthermore, we would be liable
for our own negligence and negligence of our employees which could lead to litigation from customers or action or
enforcement by regulatory authorities.
Insurance
We maintain what we believe is an appropriate level of worldwide Professional Liability/Error and Omissions
Insurance. In the future we may be unable to maintain or continue our current insurance coverage on the same or similar
terms. If we are liable for a claim or settlement that is beyond the level of insurance coverage, we may be responsible for
paying all or part of any award or settlement amount. Also, the insurance policies contain exclusions which mean that the
policy will not respond or provide cover in certain circumstances.
Claims to Date
To date, we have not been subject to any liability claims that are expected to have a material effect on our
business; however, there can be no assurance that we will not become subject to such claims in the future or that such
claims will not have a material effect on our business.
Environmental, social and governance matters may impact our business and reputation.
Increasingly, in addition to the importance of their financial performance, companies are being judged by their
performance on a variety of environmental, social and governance (ESG) matters, which are considered to contribute to the
long-term sustainability of companies’ performance. A variety of organisations measure the performance of companies on
such ESG topics, and the results of these assessments are widely publicised. Customers may have specific ESG related
requirements or targets and if we fail to meet these targets, we may lose business.
In addition, investment in funds that specialize in companies that perform well in such assessments are
increasingly popular, and major institutional investors have publicly emphasised the importance of such ESG measures to
their investment decisions. Topics taken into account in such assessments include, among others, the Company’s efforts
and impacts on climate change and human rights, ethics and compliance with law, and the role of the Company’s board of
directors in supervising various sustainability issues. We actively manage a broad range of such ESG matters, taking into
consideration their expected impact on the sustainability of our business over time, and the potential impact of our business
on society and the environment. However, in light of stakeholders’ increased focus on ESG matters, there can be no
certainty that we will manage such issues successfully, or that we will successfully meet society’s perceived expectations as
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Appendix A: Risk Factors (continued)
to our proper role. Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation
and on our business, share price, financial condition, or results of operations, including the sustainability of our business
over time.
Increasing focus on ESG matters has resulted in, and is expected to continue to result in, the adoption of legal and
regulatory requirements designed to mitigate the effects of climate change on the environment, as well as legal and
regulatory requirements requiring climate, human rights and supply chain-related disclosures. If new laws or regulations are
more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs
to meet such obligations.
In addition, our selection of voluntary disclosure frameworks and standards, and the interpretation or application of
those frameworks and standards, may change from time to time or may not meet the expectations of investors or other
stakeholders. Our ability to achieve our ESG commitments is subject to numerous risks, many of which are outside of our
control.
Risk Related to Our Common Stock
Volatility in the market price of our common stock could lead to losses by investors.
The market price of our common stock has experienced volatility in the past and may experience volatility in the
future which could lead to losses for investors. Factors impacting volatility in the market price of our common stock include,
amongst others:
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general market and economic conditions;
our results of operations;
issuance of new or changed securities analysts’ reports or recommendations;
developments impacting the industry or our competitors;
declines in the market prices of stocks generally;
strategic actions by us or our competitors;
announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing
relationships, joint ventures, other strategic relationships or capital commitments;
the public's reaction to press releases, other public announcements by us or third parties, including our filings with
the SEC;
guidance, if any, that we provide to the public, any changes in this guidance or failure to meet this guidance;
changes in the credit rating of our debt;
sale, or anticipated sale, of large blocks of our stock;
additions or departures of key personnel;
regulatory or political developments;
our performance on ESG matters
litigation and governmental investigations;
changing economic conditions;
exchange rate fluctuations;
changes in accounting principles; and
other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to those
events.
In addition, stock markets have from time to time experienced significant price and volume fluctuations unrelated to
the operating performance of particular companies. Future fluctuations in stock markets may lead to volatility in the market
price of our common stock which could lead to losses by investors.
An investor's return may be reduced if we lose our foreign private issuer status.
We are a “foreign private issuer,” as such term is defined in Rule 405 under the U.S. Securities Act 1933, and,
therefore, we are not required to file quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC. In
addition, the proxy rules and Section 16 reporting and short-swing profit recapture rules are not applicable to us. If we lose
our status as a foreign private issuer by our election or otherwise and we become subject to the full reporting regime of the
United States securities laws, we will be subject to additional reporting obligations and proxy solicitation obligations under
the Exchange Act and our officers, directors and 10% shareholders would become subject to the short-swing profit rules.
The imposition of these reporting rules would increase our costs and the obligations of those affected by the short-swing
rules.
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Appendix A: Risk Factors (continued)
We do not expect to pay any cash dividends for the foreseeable future.
We currently do not expect to declare dividends on our common stock and have not done so in the past. We
continue to anticipate that our earnings will be used to provide working capital, to support operations, to make debt
repayments and to finance the growth and development of our business. They may also be used to continue our share
repurchase program. Any determination to declare or pay dividends in the future will be at the discretion of our board of
directors, subject to relevant laws and dependent on a number of factors, including our earnings, capital requirements and
overall financial condition. Therefore, the only opportunity for stockholders to achieve a return on their investment may be if
the market price of our common stock appreciates and shares are sold at a profit. The market price for our common stock
may not appreciate and may fall below the price stockholders paid for such common stock.
A future transfer of ICON ordinary shares, other than one effected by means of the transfer of book entry interests
in the Depositary Trust Company (DTC), may be subject to Irish stamp duty.
Transfers of ICON ordinary shares effected by means of the transfer of book entry interests in the DTC should not
be subject to Irish stamp duty where ICON ordinary shares are traded through DTC, either directly or through brokers that
hold such shares on behalf of customers through DTC. However, if ICON ordinary shares are held as of record rather than
beneficially through DTC, any transfer of ICON ordinary shares could be subject to Irish stamp duty (currently at the rate of
1% of the higher of the price paid or the market value of the shares acquired). Payment of Irish stamp duty is generally a
legal obligation of the transferee. The potential for Irish stamp duty to arise could adversely affect the price of ICON ordinary
shares.
Forward-looking statements
To the extent any statements made in this annual report deal with information that is not historical, these statements are
necessarily forward-looking. Because forward-looking statements relate to the future, they are subject to inherent
uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Group’s
control. Any forward-looking statement made by the Group is based only on information currently available as at the time of
publication of this report. Forward-looking statements are subject to the occurrence of many events outside of the Group’s
control and are subject to various risk factors that would cause our results to differ materially from those expressed in any
forward-looking statement. These risk factors described in Appendix A include, without limitation, the inherent risk of
dependence on pharmaceutical and biotechnology industries and certain clients, termination or delay of large contracts, risk
of cost overruns, the risk of clinical outcomes, regulatory risks and market competition.
166 ICON plc Corporate Headquarters
South County Business Park
Leopardstown, Dublin 18
Ireland
T: (IRL) +353 1 291 2000
T: (US) +1 215 616 3000
F: +353 1 247 6260
ICONplc.com/contact
About ICON
ICON plc is a world-leading healthcare intelligence and clinical research organisation. From molecule to medicine,
we advance clinical research providing outsourced services to pharmaceutical, biotechnology, medical device and
government and public health organisations. We develop new innovations, drive emerging therapies forward and
improve patient lives. With headquarters in Dublin, Ireland, ICON employed approximately 41,100 employees
in 106 locations in 53 countries as at December 31, 2023. For further information about ICON, visit: ICONplc.com.
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