Tyman plc
Annual report and accounts
for the year ended 31 December 2020
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The expert touch
that transforms
Tyman is a leading
international supplier of
engineered fenestration
components and
access solutions to the
construction industry.
Highlights
£572.8m
Revenue
(2019: £613.7m)
1.1×
Leverage*
(2019: 1.7×)
4.0p
Dividend per share
(2019: 3.9p)
£80.3m
Adjusted operating profit*
(2019: £85.4m)
27.2p
Adjusted earnings per share*
(2019: 27.5p)
£47.6m
Profit before taxation
(2019: £24.8m)
£100.6m
Adjusted net debt*
(2019: £164.5m)
19.1p
(2019: 9.1p)
Basic earnings per share
• Strong recovery from COVID-19 in H2 saw growth of 5% against
H2 2019; full year LFL revenue down 6%
• Cost reductions and benefits of self-help initiatives mitigated the full
year revenue shortfall, resulting in adjusted operating margin slightly
ahead of 2019 and LFL adjusted operating profit down only 6%
• Good progress on self-help measures:
− Encouraging level of North American customer wins
− Successful execution of planned footprint realignments
− Momentum gained with continuous improvement activities
• Strategic initiatives continued to bear fruit, driving market share
• Reduction in safety incidents of 22% indicative of operational
gains across the Group
excellence progress
• Strong cash generation with cash conversion of 131% and reduction
in leverage to 1.1x, achieving low-end of new target range
• Repayment in December 2020 of £2.3m received under the UK
Government's Job Retention Scheme
• Modest final dividend declared of 4 pence per share, reflecting the strong
performance in H2 2020 and the robust balance sheet position
133
124
131
132
Financial statements
Independent auditors’ report
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated statement of
changes in equity
Consolidated balance sheet
134
Consolidated cash flow statement 135
Notes to the financial statements 136
178
Company balance sheet
179
Company statement of
changes in equity
Notes to the Company
financial statements
Alternative Performance Measure
reconciliations
Definitions and glossary of terms 189
190
Roundings and exchange rates
191
Five-year summary
180
183
Contents
Strategic report
Highlights
Investment case
Our purpose and values
Group at a glance
Our business model
Our marketplace
Our strategy
Key performance indicators
Chair’s statement
Chief Executive Officer’s review
Operational review
Financial review
Principal risks and uncertainties
Going concern and viability
Non-financial information
statement
Section 172 statement
Sustainability performance
1
2
4
8
14
16
20
31
34
36
40
46
54
61
63
64
68
Governance and
Directors’ report
Board of Directors
Chair’s introduction
to governance
Statement of governance
Nominations Committee report
Audit and Risk Committee report
Remuneration report
Other statutory information
80
82
83
89
92
100
122
Highlights
£572.8m
Revenue
(2019: £613.7m)
£80.3m
(2019: £85.4m)
1.1×
Leverage*
(2019: 1.7×)
27.2p
(2019: 27.5p)
Adjusted operating profit*
Adjusted earnings per share*
4.0p
Dividend per share
(2019: 3.9p)
£47.6m
Profit before taxation
(2019: £24.8m)
£100.6m
Adjusted net debt*
(2019: £164.5m)
19.1p
Basic earnings per share
(2019: 9.1p)
• Strong recovery from COVID-19 in H2 saw growth of 5% against
H2 2019; full year LFL revenue down 6%
• Cost reductions and benefits of self-help initiatives mitigated the full
year revenue shortfall, resulting in adjusted operating margin slightly
ahead of 2019 and LFL adjusted operating profit down only 6%
• Good progress on self-help measures:
− Encouraging level of North American customer wins
− Successful execution of planned footprint realignments
− Momentum gained with continuous improvement activities
• Strategic initiatives continued to bear fruit, driving market share
gains across the Group
• Reduction in safety incidents of 22% indicative of operational
excellence progress
• Strong cash generation with cash conversion of 131% and reduction
in leverage to 1.1x, achieving low-end of new target range
• Repayment in December 2020 of £2.3m received under the UK
Government's Job Retention Scheme
• Modest final dividend declared of 4 pence per share, reflecting the strong
performance in H2 2020 and the robust balance sheet position
* Alternative Performance Measures provide additional information to shareholders on
the underlying performance of the business. A detailed description of APMs, which have
been consistently applied through this report, is included on pages 183 to 188.
Read more in the Operational review and Financial review on pages 40 to 53.
01
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Investment case
Why invest in Tyman?
Favourable megatrends, differentiated value-creation and high cash generation
support long-term growth.
Favourable Megatrends
• Global population growth and demographic change
drives construction and remodelling activity
• Climate change demands more energy efficient
buildings
• Increasing consumer savvy and technology
advances raise expectations for improved
aesthetics and ease of use
Read more about our marketplace on pages 16 to 18.
02
Tyman plcAnnual Report and Accounts 2020 Compelling customer
value-creation
• Our highly-engineered products create strong value
for customers and end-users relative to their cost
• Our market-leading brands, extensive portfolio of
differentiated products, and innovation capabilities
make us a strategic partner for our customers
• Our value-added services, including co-development,
application engineering, integrated supply chain and
accredited testing, underpin our long-term customer
relationships and high levels of repeat business
Read more about our products and brands on pages 10 to 12.
Sustainable
growth potential
• We have high barriers to entry as a result of our deep
customer relationships, the heritage and reputation
of our brands, our extensive product and application
expertise and world-class facilities across our global
footprint
• Our scale allows us to continually invest in our organic
growth through innovation and operational excellence
• Our high levels of cash generation and strong balance
sheet provide funding flexibility for future expansion,
including further acquisitive growth with Tyman the
natural consolidator in a fragmented industry
• Our diversification across geographies and
commercial and residential markets provides
resilience against major changes in the market
environment
Read more about our divisions and geographical reach on pages 8 to 9.
03
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Our purpose and values
Becoming a purpose-led business
The origins of Tyman’s businesses date back to 1838. Over many years, employees have worked
to build the platform that we have today of market-leading brands, value-adding products and
services, deep customer relationships, domain expertise and our global scale.
As we embark on the next stage of our evolution, it is clear that a cohesive culture that creates
a shared sense of identity across our employees is essential for our success. Accordingly, during
2020 we have drawn on the voice of all our employees to lay the foundations for a One Tyman
culture, with a common purpose and set of values. We believe this will allow us to collaborate
more effectively, benefit from our shared best practices, draw on our collective portfolio to drive
growth, and create long-term value for all of our stakeholders.
1
3
Our new strategy is guided
by our purpose and aims to
create long-term value for
all our stakeholders
Our strategy is to focus our activities,
define a cohesive ‘One Tyman’ culture, and
grow in existing and adjacent markets,
underpinned by our sustainability roadmap.
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stainable s o l u ti o n s
Gro w
Our strategy will deliver a set of strategic
outcomes against which we measure
success and link our performance with
purpose.
Margin expansion
Sustainable growth
Engaged people
Positive impact
Long-term
Value
Creation
Read about our strategy on pages 20 to 30.
Our purpose unifies
us in a common cause
Our purpose is at the core of everything
we do, unifying us in a common cause and
growth strategy. It inspires Tyman people
to make a positive contribution every day.
Our purpose is to transform the
security, comfort and sustainability of
living and working spaces through our
expert touch.
Tyman. The expert touch that
transforms.
Read about the background to our
purpose and its development on page 6.
2
Our values guide our decisions
and actions every day
Our values are the foundation of our
success and essential to achieving our
purpose.
• Do the right thing
• Make it happen
• Never stop growing
Read about the development of our
values on page 7.
04
Tyman plcAnnual Report and Accounts 2020
4
Our stakeholders each play
an important role in the
delivery of our strategy
Actively engaging with our stakeholders
is vital to the Group’s success and the
interests of all stakeholders are considered
in key decisions.
Employees
End-users
Investors
Customers
Partners
Society
Read about stakeholder engagement on
pages 64 to 66.
5
The success of our
strategy is measured
through a set of financial
and non-financial KPIs
Like-for-like revenue growth
Adjusted operating margin expansion
Return on capital employed
Adjusted basic EPS
Return on acquisition investment
Operating cash conversion
Lost time incident frequency rate
Greenhouse gas emissions
Read about our KPIs on pages 31 to 33.
05
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Our purpose and values
Establishing ‘One Tyman’
Central to our Define strategic pillar
is building cultural cohesion across
the Group. The foundation of this
is establishing a shared purpose
and common set of values that
bind together our diverse team.
This will facilitate cross-divisional
collaboration, and the development
and propagation of best practice,
while still retaining our agile,
entrepreneurial operating model.
We started the new decade with a
campaign involving all employees
called 'Your Voice Matters'. Over the
course of the year, the views of all
employees were solicited through a
combination of surveys, focus groups
and workshops to understand their
views on culture, their personal values,
what they thought the Group’s values
should be, and what contribution the
Group and its products should make to
society. This included understanding
how our people’s values had shifted
due to the COVID-19 pandemic. In
addition to two all-employee surveys,
nine focus groups were run in the
divisions and workshops were held
as part of the Global Leadership
Conference, with over 250 employees
involved. A cross-divisional team then
worked to distil the output of these
surveys and focus groups into a set
of themes and common words. These
were then formalised into an authentic
purpose and set of values. We brought
this purpose and values together into
an engaging Code of Business Ethics
that provides the ethical framework for
how to apply our values in day-to-day
decisions.
To reinforce the shared identity,
Tyman is being established as the
employee brand, with the divisions
being renamed Tyman North America,
Tyman UK & Ireland and Tyman
International. We will continue to use
our well-recognised portfolio of brands
in our customer-facing activities.
The newly defined purpose, values,
and Code of Business Ethics were
launched at a group-wide leadership
conference in January 2021 and
are now being deployed using a
combination of video messages, site-
hosted meetings supported by local
champions, and events for employees
to tell their stories about what our
new purpose and values mean to
them. Work will continue through
2021 to fully embed the new culture.
Read more about our strategy
on pages 20 to 30 and our
sustainable culture on page 25.
The word ‘expert’ makes
me feel proud - it’s our
expertise that really
differentiates us.”
Tyman employee
The word 'touch'
specifically resonated
with me. Touch is a very
personal verb that can
be related to almost
everything we do.”
Tyman employee
Our purpose
Our purpose is at the core of everything we do, unifying us in a common cause and growth strategy. It is the essence of
us at our best and inspires Tyman people to make a positive contribution every day.
Millions are kept safe and comfortable at home and at work around the world because of our
expertise. We know that to be experts, we must have deep understanding of our customers and
their needs, an uncompromising commitment to both safety and quality, and a restless ambition
to innovate. We never forget that experts are people: growing and energising our talent is at the
heart of what makes us different.
With our expertise, we have the power to transform what we touch. We commit to transform
living and working spaces, to transform people and careers, to transform the value of our
businesses, and to transform our impact on communities and society.
Our purpose is to transform the security, comfort and sustainability
of living and working spaces through our expert touch.
Tyman. The expert touch that transforms.
Read more about our products on pages 10 to 11 and our business model on pages 14 to 15.
06
Tyman plcAnnual Report and Accounts 2020 Our values
Our values frame how we work with each other and with our partners. These values address integrity, accountability/
ownership and ambition, and will shape the culture of Tyman. They are the foundation of our success and essential to
achieving our purpose. Our new Code of Business Ethics, ‘Integrity in action’ embodies these values, laying out the
expected standards of behaviour that all our employees must adhere to.
Read more about our Code of Business Ethics on page 77.
The Tyman Touch
Do the right thing
Integrity is the cornerstone
of our business
• We demand transparency,
and we always do what it
takes to build or repair trust
• We value, respect and look
out for each other, and we
are strongest when we are
most diverse
• We speak up and take care to
listen, because every voice matters
Never stop growing
There is no limit to what we can achieve
• We take every opportunity to learn and
develop, professionally and personally
• Every day we make the continuous
improvements which people deserve
from us
• We believe in the power of creativity to
break through with new thinking, new
ideas, new solutions
S t op Gro
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Make it happen
We are action people
• We behave like owners, always
ready to hold ourselves and
others to account
• Inclusive teamwork creates our
best results
• We take pride in bringing
positive energy to our work,
and our performance is fed by
our passion
We can be proud of our success at Tyman, but how we achieve that success matters,
both for today and to secure our future for the generations to come. Living the value of
do the right thing is an essential part of how we conduct our business every day, to allow
us to consistently make it happen and never stop growing.”
Jo Hallas
Chief Executive Officer
Timeline
October 2019
Development of Group
strategy, including
imperative for ‘One Tyman’
February 2020
Initial employee values
survey conducted
June 2020
Focus groups and workshops
held, as well as group-wide
leadership conference
Ongoing
Embedding of
new culture
January 2020
Launch of ‘One Tyman’ work
through employee ‘Your
Voice Matters’ campaign
May 2020
Post COVID-19 values
survey update conducted
H1 2021
Deployment of purpose,
values, Code of Business
Ethics, and employee brand
07
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Group at a glance
Our divisions
Tyman is a leading international supplier of engineered fenestration components and access
solutions to the construction industry.
The Group designs and manufactures products that enhance the comfort, sustainability, security, safety and aesthetics
of residential homes and commercial buildings. Tyman’s portfolio of leading brands serve their markets through three
regional divisions. Headquartered in London, the Group employs approximately 4,130 people, with facilities in 17
countries worldwide.
North America
AmesburyTruth is Tyman’s division
operating in North America
UK & Ireland
ERA is Tyman’s division operating
in the UK and Ireland
International
SchlegelGiesse is Tyman’s division
operating in continental Europe
and the rest of world
Routes to market
Routes to market
Routes to market
Manufacturers
of Doors and
Windows 80%
Distributors and
Wholesalers
17%
Other 3%
Manufacturers
of Doors and
Windows 55%
Distributors and
Wholesalers
35%
Other 10%
Manufacturers
of Doors and
Windows 70%
Distributors and
Wholesalers
27%
Other 3%
Residential
Commercial
Residential
Commercial
Residential
Commercial
85%
15%
63%
37%
77%
23%
Manufacturing
sites
Distribution
site
Manufacturing
sites
Distribution
sites
Manufacturing
sites
Distribution
sites
10
Brands
1
3
Brands
2
6
Brands
9
Employees
2,930
Revenue
£372.1m
(2019: £386.0m)
Employees
410
Revenue
£92.2m
(2019: £107.2m)
Employees
770
Revenue
£108.5m
(2019: £120.5m)
Adjusted operating profit
Adjusted operating profit
Adjusted operating profit
£64.5m
(2019: £64.5m)
£8.8m
(2019: £13.8m)
£12.3m
(2019: £14.8m)
Our customer base ranges from large OEMs, where we are often integrated into their product design and development
processes and supply chains, through to distributors/retailers, where our strong trade brands are of key importance
given their reputation for quality and innovation with installers, architects and end consumers. Our access solutions
portfolio also serves specifiers of construction projects and contractors.
Read more about our Brands on page 12.
08
Tyman plcAnnual Report and Accounts 2020
Our geographical reach
Key
Manufacturing site
Manufacturing HQ
Warehouse site
Office
Office HQ
Where Tyman’s products are sold
Where Tyman’s products are manufactured
US 58%
UK 16%
Canada 6%
Italy 4%
Other 16%
US 34%
Far East (inc China) 28%
Mexico 17%
Italy 11%
UK 6%
Other 4%
09
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Group at a glance CONTINUED
Our products
The Group offers a broad range of differentiated, highly-engineered products supported by
value-added services and holds over 480 active patents with a further 142 pending.
The portfolio covers all aspects of the hardware and sealing solutions required for doors and windows,
and a full suite of solutions for roof, wall and floor access in residential and commercial buildings.
Comfort
• Ventilation
• Weather resistance
• Sound insulation
• Ease of use
Sustainability
• Energy efficiency of buildings
• Longevity of buildings
Security
• Locking/deterrent
• Monitoring
• Remote and timebound access
Safety
• Fall prevention
• Hurricane solutions
• Lockdown
• Safe access
Aesthetics
• Look
• Feel
• Suiting
Who Tyman sells to
Manufacturers of doors and windows 74%
Distributors and wholesalers 22%
Other industrial uses 4%
What Tyman sells
Window and door hardware 73%
Seals and extrusions 16%
Commercial access solutions 10%
Other 1%
10
Residential
window hardware
Residential
door hardware
Value to the customer
Window and
door hardware
Products
Integrated opening, closing and locking systems for all
types of window (casement and sliding/sash) and door
(including patio and bi-fold); associated decorative
hardware; and smart entry and monitoring solutions
(electronic access products, sensors, alarms, indoor/
outdoor cameras and associated services).
Value to the customer
Comfort through ventilation and ease of use; sustainability
through energy efficiency and durable designs; security
through various locking (including remote and timebound
access), alarm and monitoring solutions; safety hardware;
aesthetics through look, feel and suiting of product ranges
and in concealed hardware designs where appropriate.
Tyman plcAnnual Report and Accounts 2020 Commercial
access solutions
Commercial
window hardware
Commercial
door hardware
Smartware
and automations
Seals and
extrusions
Commercial access
solutions
Seals and
extrusions
Other
Products
Solutions for roof, floor/pavement,
and wall access (riser doors),
including associated safety products
(e.g. ladders, railings).
Value to the customer
Comfort through ventilation, weather
resistance and sound insulation;
safety and security through suite
of lock and barrier products;
sustainability through durability of
product solutions.
Products
Window and internal/external door
seals and other extrusions.
Value to the customer
Comfort through weather resistance
and sound insulation; sustainability
through durability of materials;
energy saving; aesthetics through
concealed seal designs.
Products
Other products and services such as
emergency barricade solutions, non-
fenestration and non-access related
products and services.
Value to the customer
Various differentiated value
propositions according to the specific
product or service.
Read more about our value creation in the Business model on pages 14 to 15.
11
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Group at a glance CONTINUED
Our brands
Our brands are all highly-regarded leaders in their respective market segments. Together they
represent almost 1,000 years of innovation, quality and service for our customers.
Commercial access
solutions for the roof,
wall and floor. Access360
was formed in 2018 from
the Howe Green, Profab
and Bilco UK brands
Established
Bilco (1926)
Howe Green (1983)
Profab (2001)
Window and door
hardware and seals.
The Amesbury and Truth
brands were harmonised
in 2014
Established
Truth (1914)
Amesbury (1978)
Window and door
hardware
Smoke vents, roof
access hatches and
pavement doors
Established
1932
Established
1926
Security hardware
including electronic
security systems and
services
Decorative hardware
Hardware for aluminium
windows and doors
Established
1838
Established
1989
Established
1965
Key
User
Residential
Commercial
Division
North America
UK and Ireland
Rest of the world
Product category
Window and door
hardware
Seals and
extrusions
Commercial
access solutions
Decorative door
hardware
Window and door seals
and extrusions
Door hardware
for architectural
ironmongers
Established
1975
Established
1885
Established
2011
12
Tyman plcAnnual Report and Accounts 2020
Case study
Cross-divisional collaboration on
Riyadh metro
In Riyadh, the population is expected to grow by 40% over
the next 10 years. With the aim of relieving traffic congestion,
in 2014, the city announced an ambitious US$22.5 billion
infrastructure project, consisting of six metro lines spanning
176 kilometres and a total of 85 stations, with the first lines
expected to open in 2021 and for full operational capacity to
be achieved in early 2022.
Working with BACS, a consortium of main contractors including
Bechtel, Almabani and Siemens with responsibility for three of the
six lines, Tyman supported the project from initial specification,
through detailed design and to commissioning, at each stage working
directly with the contracting team on site.
The main supply was 73 Bilco access doors from the US that
provided the safe emergency egress from underground metro
platforms. Bilco’s spring-loaded piston doors were considered a
superior solution for the project given their enhanced durability
and lower maintenance requirements. Design approval by BACS
and compliance with the strict specifications of the Riyadh General
Directorate of Civil Defence required significant input from the
Bilco technical team in the US and extensive third party testing in
the UK, all of which was co-ordinated for the customer by the local
SchlegelGiesse team in the Middle East.
Based on the success of this partnership, BACS decided to
collaborate further with Tyman and selected Howe Green access
covers and Profab fire-rated riser doors from the UK for other
elements of the project.
Overall, the ability to bring together market-leading solutions from
across Tyman’s global portfolio, while underpinning these with
expert technical support and local project management, led to over
US$1million of Tyman’s commercial access products being supplied
to the project.
Read more on page 27.
We receive excellent
support from the Tyman
organisation. They have
spared no effort to
extend assistance and
solve any bottleneck at
the earliest opportunity,
and this is highly
appreciated.”
Alaa Kabbara
Procurement Manager,
BACS Consortium
13
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Our business model
How we create value
We use our valuable resources to create long-term, sustainable value for all our stakeholders.
Key resources and relationships
Key activities
Our resources are carefully selected and developed to create
competitive advantage…
… that allows us to undertake
differentiated activities that address customer needs…
Deep customer relationships
We work with our customers to
understand their unique requirements
in terms of the offer they require
and how they wish to be served,
making us the partner of choice
across many channels to market.
These long-term relationships bring
high levels of repeat business and a
customer intimacy that allows us to
continuously improve the value we
bring.
Leading brands
Our portfolio of complementary
brands have market-leading positions
predicated on the innovation, quality
and service they deliver for our
customers, as evidenced through
their long heritage. In some cases,
the reputation of our brands is so
strong with the end-users that the
brand name has become synonymous
with the category name.
Experienced and
committed workforce
We have a highly-skilled, dedicated
workforce of c.4,130 personnel
around the world, together creating
unparalleled knowledge of engineered
fenestration components and
access solutions technologies and
applications. Our people are at
the heart of our ability to deliver
innovation, quality and service to our
customers.
Strategic supplier partnerships
We carefully supplement our
internal capabilities with select
specialisms through external
collaborations, allowing us to deliver
the best in innovation, quality and
service to our customers in the
most efficient way.
Global footprint
Our global scale allows us to sustain
and further develop a rich portfolio
of products and technologies that
support our customers’ needs, while
having the presence and agility to
respond quickly to the specifics of
local markets.
Strong balance sheet
Our portfolio attracts high
margins due to its competitive
advantages and a strong focus
on margin expansion initiatives.
Asset optimisation and disciplined
management of capital investment
drives significant cash generation.
The resulting balance sheet
strength and debt capacity creates
a virtuous circle that will allow
Tyman to make investments that
drive further organic and acquisitive
growth for years to come.
Design
At the core of our capabilities is our
ability to understand our customers’
and end-users’ needs and translate
these into innovative solutions that add
genuine and relevant value to living
and working spaces. This innovation
is reflected in our extensive portfolio
of standard products addressing all
aspects of engineered fenestration
components and access solutions for the
construction industry.
In addition, we collaborate with
customers on the development of new
window and door designs, leveraging our
deep product and application expertise
to create bespoke hardware and sealing
solutions that create true value for
end-users. For window and door system
designers, we offer our hardware
system design capabilities and deliver
drawings and bills of materials for both
their standard solutions and bespoke
projects.
For commercial building and
infrastructure projects, we work with
architects and specifiers to help them
select and design in the right access
solutions, bringing custom sizing or
other capabilities as required.
In all cases, our leading-edge testing
facilities and accreditations are a
key component of ensuring that
our products deliver the quality and
durability that our customers expect of
them, allowing our customers to assure
their users of the same for their installed
windows, doors and access solutions.
Innovation
14
Make/source
Deliver
Our goal is always to provide our
We are continually looking to
customers with the right product,
develop and optimise our routes
delivered at the right time, at the
to market to effectively meet the
right price.
Our size affords us economies of
evolving demands of our industry
around the world.
scale in the procurement of base
For our direct relationships
commodity materials such as
with large window and door
stainless steel, zinc, aluminium,
manufacturers, we embed with their
polypropylene and also outsourced
operations, supplying just-in-time,
manufactured components.
sequenced components to their
We manufacture in our world class
production lines.
our core capabilities. Our global
and merchants who supply
footprint and network of extensive
smaller manufacturers, system
supplier partnerships also allows
design companies, architects and
us unparalleled flexibility to deliver
construction contractors. We excel
locally when close-coupling with
at delivering to these customers on
our customers’ supply chains is
the short lead-times they routinely
required, or from a distance where
require. We also provide training and
more standardised production is
technical support to give them the
possible and economics are more
product and application knowledge
important.
facilities where this aligns with
We also serve specialist distributors
buildings.
to best serve their customers.
For large commercial building and
infrastructure projects, we ship
direct to site and then support
with on-site technical support as
required.
Our growing smartware offer
requires new routes to market and
we have developed and trained a
network of accredited installers to
support homeowners with a leading-
edge security proposition.
Value created
… that together create value for
our stakeholders.
Customers
We deliver highly-engineered components
that allow window and door manufacturers
to differentiate in their marketplace
with value-enhanced windows, doors
and other forms of access solution. In
addition, Tyman delivers industry-leading
services to these customers ranging
from design support to integrated supply
of components into window fabrication
processes. Our products are also
designed to ensure ease of installation for
contractors, and our short lead times and
technical support allow our distributors to
serve their customers in the best way.
End-users
Relative to their cost point, our products
and solutions have a disproportionate
impact on the comfort, sustainability,
security, safety and aesthetics of
residential homes and commercial
Read more about our products
on pages 10 to 11.
Employees
Tyman invests in its people through
employee training, career path
development and continual improvement
of working practices and conditions.
Partners
Our strategic suppliers benefit from long-
term, fair partnerships with development
of their business practices and capabilities.
Investors
We strive to continually deliver increased
shareholder value through a mix of
both capital appreciation and dividend
distributions, made possible through our
growth in earnings and financial strength
as we deliver on our strategy.
Society
Our products support making buildings
more sustainable by enabling weather-
resistance, sound insulation, heat loss
reduction and overall durability. Many
products have a positive societal impact,
through reducing community crime rates,
enhancing safety and fire protection and
meeting the needs of vulnerable groups.
As a Group, we are also committed to
minimising our impact on our environment
through more deeply embedding
sustainable practices in all our operations.
Read more about sustainability
on pages 68 to 79.
Tyman plcAnnual Report and Accounts 2020 Key resources and relationships
Key activities
Our resources are carefully selected and developed to create
… that allows us to undertake
differentiated activities that address customer needs…
competitive advantage…
Deep customer relationships
Strategic supplier partnerships
We work with our customers to
We carefully supplement our
understand their unique requirements
internal capabilities with select
in terms of the offer they require
specialisms through external
and how they wish to be served,
collaborations, allowing us to deliver
making us the partner of choice
the best in innovation, quality and
Design
across many channels to market.
service to our customers in the
These long-term relationships bring
most efficient way.
high levels of repeat business and a
customer intimacy that allows us to
continuously improve the value we
bring.
Global footprint
Our global scale allows us to sustain
and further develop a rich portfolio
of products and technologies that
support our customers’ needs, while
Leading brands
Our portfolio of complementary
having the presence and agility to
brands have market-leading positions
respond quickly to the specifics of
predicated on the innovation, quality
local markets.
and service they deliver for our
customers, as evidenced through
their long heritage. In some cases,
the reputation of our brands is so
strong with the end-users that the
brand name has become synonymous
with the category name.
Experienced and
committed workforce
We have a highly-skilled, dedicated
workforce of c.4,130 personnel
around the world, together creating
unparalleled knowledge of engineered
fenestration components and
access solutions technologies and
applications. Our people are at
the heart of our ability to deliver
innovation, quality and service to our
customers.
Strong balance sheet
Our portfolio attracts high
margins due to its competitive
advantages and a strong focus
on margin expansion initiatives.
Asset optimisation and disciplined
management of capital investment
drives significant cash generation.
The resulting balance sheet
strength and debt capacity creates
a virtuous circle that will allow
Tyman to make investments that
drive further organic and acquisitive
growth for years to come.
At the core of our capabilities is our
ability to understand our customers’
and end-users’ needs and translate
these into innovative solutions that add
genuine and relevant value to living
and working spaces. This innovation
is reflected in our extensive portfolio
of standard products addressing all
aspects of engineered fenestration
components and access solutions for the
construction industry.
In addition, we collaborate with
customers on the development of new
window and door designs, leveraging our
deep product and application expertise
to create bespoke hardware and sealing
solutions that create true value for
end-users. For window and door system
designers, we offer our hardware
system design capabilities and deliver
drawings and bills of materials for both
their standard solutions and bespoke
projects.
For commercial building and
infrastructure projects, we work with
architects and specifiers to help them
select and design in the right access
solutions, bringing custom sizing or
other capabilities as required.
In all cases, our leading-edge testing
facilities and accreditations are a
key component of ensuring that
our products deliver the quality and
durability that our customers expect of
them, allowing our customers to assure
their users of the same for their installed
windows, doors and access solutions.
Make/source
Our goal is always to provide our
customers with the right product,
delivered at the right time, at the
right price.
Our size affords us economies of
scale in the procurement of base
commodity materials such as
stainless steel, zinc, aluminium,
polypropylene and also outsourced
manufactured components.
We manufacture in our world class
facilities where this aligns with
our core capabilities. Our global
footprint and network of extensive
supplier partnerships also allows
us unparalleled flexibility to deliver
locally when close-coupling with
our customers’ supply chains is
required, or from a distance where
more standardised production is
possible and economics are more
important.
Deliver
We are continually looking to
develop and optimise our routes
to market to effectively meet the
evolving demands of our industry
around the world.
For our direct relationships
with large window and door
manufacturers, we embed with their
operations, supplying just-in-time,
sequenced components to their
production lines.
We also serve specialist distributors
and merchants who supply
smaller manufacturers, system
design companies, architects and
construction contractors. We excel
at delivering to these customers on
the short lead-times they routinely
require. We also provide training and
technical support to give them the
product and application knowledge
to best serve their customers.
For large commercial building and
infrastructure projects, we ship
direct to site and then support
with on-site technical support as
required.
Our growing smartware offer
requires new routes to market and
we have developed and trained a
network of accredited installers to
support homeowners with a leading-
edge security proposition.
Quality
Service
Value created
… that together create value for
our stakeholders.
Customers
We deliver highly-engineered components
that allow window and door manufacturers
to differentiate in their marketplace
with value-enhanced windows, doors
and other forms of access solution. In
addition, Tyman delivers industry-leading
services to these customers ranging
from design support to integrated supply
of components into window fabrication
processes. Our products are also
designed to ensure ease of installation for
contractors, and our short lead times and
technical support allow our distributors to
serve their customers in the best way.
End-users
Relative to their cost point, our products
and solutions have a disproportionate
impact on the comfort, sustainability,
security, safety and aesthetics of
residential homes and commercial
buildings.
Read more about our products
on pages 10 to 11.
Employees
Tyman invests in its people through
employee training, career path
development and continual improvement
of working practices and conditions.
Partners
Our strategic suppliers benefit from long-
term, fair partnerships with development
of their business practices and capabilities.
Investors
We strive to continually deliver increased
shareholder value through a mix of
both capital appreciation and dividend
distributions, made possible through our
growth in earnings and financial strength
as we deliver on our strategy.
Society
Our products support making buildings
more sustainable by enabling weather-
resistance, sound insulation, heat loss
reduction and overall durability. Many
products have a positive societal impact,
through reducing community crime rates,
enhancing safety and fire protection and
meeting the needs of vulnerable groups.
As a Group, we are also committed to
minimising our impact on our environment
through more deeply embedding
sustainable practices in all our operations.
Read more about sustainability
on pages 68 to 79.
15
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Our marketplace
Market trends
The Group continuously assesses changes to our market drivers and responds through
product innovation and evolution of the business model.
Despite the global disruption arising from COVID-19, long-term macroeconomic and megatrends continue to
support our market drivers. There are a number of trends that have emerged or been accelerated as a result
of the pandemic which present significant further opportunities for Tyman. The Group is well-positioned to
capitalise on these and deliver further growth.
Megatrends
• Global population growth continues to show no signs
of abating
• Rapid urbanisation continues, not just creating larger
megacities but also swelling the size of mid-sized
regional cities around the world
• Mature economies are typically experiencing
demographic shifts to ageing populations in contrast
to growing youth populations in emerging markets
• Increasing momentum behind the sustainability
agenda driving focus on resource efficiency including
the need for energy-efficient buildings and circular
economy
• Technology is creating new ways of living and
working; even traditional sectors are experiencing
changes in customer expectations driven by
the way consumers are accustomed to being
serviced elsewhere
Macroeconomic trends
• Modest global growth predominantly driven by
emerging and developing markets with core markets
of North America and Europe broadly stable
• Increased levels of public borrowing driving
economic development
• Ongoing trade disputes (US-China, Brexit etc.)
are causing volatility in consumer and business
confidence
• China GDP growth rate is decelerating
• US residential housing starts remain significantly
below previous cycle peaks and the long-run
averages required to sustain the population
• Positive first-time buyer demand driven by
demographics, good employment levels, low
mortgage interest rates, wage rate increases and
moderation of house price inflation
• Median age of US homes is now 37 years, up from
31 years prior to the housing downturn in 2008,
fuelling spend on repair and remodelling
16
Tyman plcAnnual Report and Accounts 2020 The impact of COVID-19 on our markets
Trend
Impact / our response
A 'nesting' trend is being
seen, with more time spent
at home leading to a desire
for improvement activities,
and increased working
and learning from home
necessitating flexible living
spaces
Consumers have increased
savings levels due to
lockdown measures
reducing spend on travel and
entertainment
Investment in the home is being
prioritised over other expenditure,
driving further growth in repair and
remodelling activity
This is allowing home-owners to afford
big ticket items including door and
window upgrades or other remodelling
work that involves new doors and
windows. Furthermore, consumers
are more willing to invest in premium
quality, differentiated products. The
Group’s product portfolio means we
are well positioned to benefit from this
In contrast to rapid
urbanisation, an 'urban
flight' trend is being noted
as people leave cities to seek
more space
Growth in new build and repair and
remodelling activity, particularly
favouring single-family construction,
to which the Group is most exposed
The 'build back better'
agenda means housing and
infrastructure is likely to be
a priority for fiscal stimulus
Increased new build residential and
commercial construction activity,
including affordable housing. Value-
engineered offerings being developed
to suit the affordable housing market
The adoption of e-commerce
and digitalisation has been
accelerated significantly as
schools, workplaces and
shopping all move online
Development of e-commerce
channels to market and expansion
of the smartware range to benefit
from accelerated adoption of digital
technology
Consumers have increased
awareness of surface
hygiene
The Group has a range of touch-free
and anti-germ products which address
this increased awareness
Momentum behind the
sustainability agenda has
accelerated
Sustainability is a core part of the
Group’s strategy and a key focus in
product development activities: 17%
of our revenues are derived from
products that deliver in-use positive
environmental and social benefits
Pressure on logistics and
freight costs, as well as
raw material availability
and cost have arisen due
to the level of disruption to
global shipping and spike in
demand for goods
Ordering patterns, lead times and
customer communications are being
managed closely, with pricing actions
implemented where necessary to
recover cost inflation. Mid-term,
supply chains will be analysed to
optimise onshore / offshore model
17
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Our marketplace CONTINUED
Residential
Market drivers
How we are responding
Building codes and improving homeowner
awareness driving demand for more energy-
efficient homes
Promoting the enhanced energy efficiency attributes of
products e.g. Tyman foam sealing range in contrast to lower-
cost alternatives
Insufficient affordable US housing stock creating
demand for quality building product at lower prices
Development of differentiated, value-engineered products
and removal of waste from supply chains, including focus on
efficiency in fabrication and installation processes
Growth in the construction of single-family homes
and repair and remodelling activity
Capitalising on our strength in this market through continued
development of differentiated products
Ageing populations placing increased emphasis on
the need for inclusive ‘lifetime homes’
Emphasis on ‘ease of use’ in the development of products
Growing middle class promoting increased demand
for more premium fenestration products e.g. bi-fold
doors and large-scale patio doors with narrowed
profiles to increase the surface area of glass
Customised hardware and sealing sets for premium
fenestration types, prioritising high security and minimal
design so as not to disrupt the overall aesthetic
New technologies making refined industrial design
a consumer expectation in many product categories
Enhanced industrial design and emphasis on creating
matching ‘suites’ of products
Enhanced fire safety standards within unified
building codes
Growing range of passive fire protection products across
hardware and seals to support door manufacturers in fire
regulation compliance
Increase in smart speaker uptake driving growth
across the smart home category with smart security
a strong beneficiary
Launch of an enhanced residential smart security range that
meets the internationally recognised BSI Kitemark for IoT
Devices
Commercial
Market drivers
How we are responding
Increased focus on sustainability enhances demand
for ‘green projects’ and associated construction
products
Growth in the construction of multi-family homes
and conversion of industrial spaces to residential
near the centre of major cities
Development of thermally-broken commercial access products
Increasing range of products with light-commercial application
Enhanced fire safety standards within
building codes
Growing range of emergency smoke venting products for
commercial use as well as a range of fire-certified products
Labour shortage across construction markets
leading to increased construction wages and the
need to find savings elsewhere within a project
Development of differentiated, value-engineered products
and removal of waste from supply chains, including focus on
efficiency in installation processes
Design trends and well-being focus driving larger
expanses of glass in commercial buildings
Development of seals and hardware that support heavier and
higher performing glass packages
Growth in smart buildings
Enhancing Tyman range of actuated commercial access
products
18
Tyman plcAnnual Report and Accounts 2020 Case study
Transforming
Hotel Palacio Colomera
Built in 1928 by architect Félix Hernández, the Palace of the
Counts of Colomera has been one of the most renowned private
buildings in Córdoba, Spain for nearly a century. Placed in Plaza
de las Tendillas, this imposing four-story building surmounted by
two Borrominesque-inspired towers was bought in 2016 by H10
to be converted into a luxury 4-star hotel.
The renovation was led by architect D. Francisco Paniagua, with
Ventanas HC tasked to supply over 90 windows for the entire
building. The goal was to preserve the spirit of the palace, while
also providing state-of-the-art performance and energy efficiency.
With the focus on thermal and acoustic insulation, as well as the
minimal aesthetics required to let the historical character of the
hotel shine through, the Giesse concealed hardware range was
selected. This included the CHIC high-performance concealed
hinge system for tilt-and-turn aluminium windows up to 150kg
in weight where the hinges completely disappear into the frame.
When paired with the revolutionary NP Ultra handle, the result is a
truly minimal look. A quietly impactful piece of modern design in a
historic environment.
Partnering with Giesse
gives us that added value
with a wide variety of
quality solutions and
differentiating design. In a
highly competitive market,
Giesse's innovative
products, which focus on
design as well as durability
and performance,
complement our systems
and give us a significant
competitive advantage.”
Iván Heredia
General Manager of VENTANS HC
19
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Our strategy
Significant value creation opportunity
In the second half of 2019, with new
executive leadership in place and
progress demonstrated in resolving
the North American footprint
consolidation issues, a strategy
review was initiated to develop plans
for the next phase of Tyman’s growth.
This review recognised that, while
Tyman had a solid platform built
through quality acquisitions over
the previous decade, underlying
organic growth had been more
lacklustre. This was in part due to
the heavy acquisition agenda leaving
management with limited bandwidth
to optimise the growing portfolio
and organically grow share including
through innovation.
Furthermore, reflective of its origins,
Tyman had to date operated as a
holding company structure with
minimal synergy extraction from
across its portfolio. It was apparent
that a more cohesive culture would
be important for the next stage
of Tyman’s evolution, while still
preserving its entrepreneurial spirit
and decision agility. Such cohesion
would better enable the Group to
unlock its inherent synergies through
facilitating greater collaboration,
including the sharing of best
practices, and the cross-leveraging of
brands, products and technologies.
Pleasingly, the Group has a
compelling customer value
proposition enabled by its market-
leading brands, value-adding
products and services, deep customer
relationships, domain expertise and
global scale. This is further enhanced
by favourable megatrends including
population growth, demand for more
energy efficient buildings, technology
evolution and increasing end-user
savvy. This positions the Group well
for growth.
Accordingly, the strategy put in place
is largely evolutionary, building on
the Group’s inherent capabilities. The
three pillars of Focus, Define and
Grow will drive margin expansion and
strengthen the base to enable long-
term growth and meaningful value
creation for our stakeholders.
Embedding sustainability in
our strategy
Over the course of 2020, the Group
undertook work to establish a
sustainability roadmap, setting out
our ambitions and action plans for
the next decade. The three pillars of
Sustainable Operations, Sustainable
Culture and Sustainable Solutions
align with and reinforce our Focus-
Define-Grow strategy.
Transforming the Group’s safety
performance, reducing our carbon
footprint, water use and waste through
Sustainable Operations will ultimately
reduce our costs, improve resilience
and help drive margin expansion.
Building a Sustainable Culture across
the Group through our purpose,
values and Code of Business Ethics
will enable our diverse talent to
contribute their best and help create
long-term value for the business, local
communities and wider society.
Our products already positively
contribute to communities and the
planet. Providing more Sustainable
Solutions that positively contribute to
a sustainable future will be one of our
targets as we seek to grow.
As we learn and develop our
capabilities during our sustainability
journey, we will review and update the
roadmap to increase our contribution
to a more sustainable world.
Impact of COVID-19 on our
strategy
During 2020, good progress has been
made on the strategic priorities in spite
of the pandemic. The Group believes
the strategy continues to be the
right one in the context of COVID-19
and that there are opportunities to
accelerate aspects of the strategy as
we emerge from the crisis.
Developing our sustainability roadmap
The Group completed a thorough review of the
sustainability landscape during the year, including
benchmarking the sustainability practices of over 50
customer, competitor and peer group companies. At the
Group’s Global Leadership Conference in June, 85 senior
leaders used the Sustainability Accounting Standards
Board (SASB) materiality map and Global Reporting
Initiative’s (GRI) sustainability reporting framework as
a guide to identify the priority topics to be addressed in
Tyman’s sustainability roadmap.
Further insights were gained through 18 interviews
with customers, peers and the investment community
(rating agencies, analysts and institutional investors) to
understand their perspectives and priorities. We then
distilled the internal and external insights into a subset
of material issues to be addressed in our sustainability
roadmap and prioritised these using a materiality matrix.
Finally we undertook a detailed review of the UN
Sustainable Development Goals (SDGs) and mapped our
sustainability roadmap against its targets.
20
Tyman plcAnnual Report and Accounts 2020 Strategic outcomes
Margin expansion
Expand operating margin
through driving efficiency
in operations
D
e
Susta
i
n
f
i
n
e
a
b
l
e
c
u
l
t
u
r
e
Sustainable growth
Consistently deliver profitable
revenue growth
Long-term
Value
Creation
t i o n s
s
u
c
o
F
ble op e r a
a
n
i
a
t
s
u
S
S
u
stainable s o l u ti o n s
Gro w
Engaged people
Provide a safe working
environment and develop
engaged, high-performing teams
Positive impact
Protect the natural world and
build more inclusive communities
Focus our activities, define One Tyman,
and grow in existing and adjacent markets.”
Materiality matrix
h
g
H
i
Fundamentals
Strategic Focus
4
1
9
5
2
3
10
6
7
12
8
Fundamentals
Fundamentals
l
s
r
e
d
o
h
e
k
a
t
S
o
t
e
c
n
a
t
r
o
p
m
I
11
w
o
L
Low
Importance to Tyman
High
Materiality matrix key
Sustainable Solutions
1 Circular economy
3 Material sourcing
2 Packaging and waste
4 Product innovation
Sustainable Operations
5
6
Employee health,
safety and wellbeing
Climate change
and GHG emissions
Sustainable Culture
9
Ethical business
practices
7 Energy management
8 Water stewardship
11 Local communities
10 Diversity and inclusion
12 Training and
development
21
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Our strategy CONTINUED
Focus
The Focus strategic pillar reflects actions to streamline and
strengthen what we have, thereby laying the foundations for
sustainable, profitable growth. These activities are fundamentally
about simplifying the business and driving margin expansion.
Strategic outcomes Progress in 2020
Priorities for 2021
Margin expansion
Engaged people
Positive impact
• Stabilised Statesville performance
• Closed Fremont and Singapore facilities
• Ceased manufacturing in Australia and China
• Completed inter-site line transfers
• Delivered expected synergies and returns from
Ashland and Zoo
• Divested Ventrolla business
• Commenced North America product portfolio
harmonisation
Launched safety leadership campaign
LTIFR improved by 22%
•
•
• Defined environmental targets for future years
• Commenced preparations to meet the
requirements of the TCFD framework
• Complete next phase of product
portfolio harmonisation in North
America
• Continue footprint streamlining
and commence lean optimisation
activity
• Commence multi-year IT system
upgrade programme
• Complete deployment of safety
leadership programme and
continue roll out of Group safety
standards
• Commence work on defining a
Science Based Target
• Develop playbooks to reduce
energy, water and waste
Rationalise
Streamline footprint
One of the Group’s competitive
advantages is its global scale. We
continuously evaluate our manufacturing
and distribution footprint to ensure
this delivers maximum operational
efficiency and economies of scale
as well as having the right routes to
market in each location to ensure
we meet our customers’ needs. This
also ensures that capital investment
and management bandwidth can
be focused on the most compelling
markets and growth opportunities.
Significant work has been completed
to establish ‘centres of excellence’
in North America and there remains
opportunity to deliver additional margin
expansion through further streamlining
of the footprint. We also review the
portfolio of businesses to ensure these
remain core to the current strategy and
direction of the Group.
Good progress was made in 2020 with
the various initiatives to streamline
operations, including closure of the
Fremont and Singapore facilities, and
ceasing of manufacturing in Australia
and China. A number of inter-site
line transfers in North America were
also completed as the manufacturing
'centres of excellence' are further
optimised. These were successfully
executed, with no customer disruption.
In addition, Ventrolla, the UK sash-
window refurbishment business, which
was loss-making for a number of years
and considered non-core, was divested.
Further opportunities to streamline
the footprint and optimise distribution
networks are being explored.
Harmonise product portfolio
The Group has a comprehensive range
of products across a variety of brands
22
that have come together through
acquisition. There is opportunity to
reduce complexity and strengthen the
offering by harmonising this portfolio
to eliminate overlap thereby allowing
manufacturing and warehousing
cost efficiencies, better focusing
engineering activity on innovation, and
enabling growth through clearer range
positioning to our customers.
Good progress was made with
the first phase of harmonising the
portfolio across the Amesbury, Truth
and Ashland brands, with work on
sliding patio door hardware largely
completed in 2020, with the next phase
in progress and due for completion in
2021.
Optimise
Continuous improvement
There are opportunities to drive more
value from what we have through
embedding lean practices, six sigma
process controls and value analysis/
value engineering activities across
the Group. As the group-wide Lean
Excellence initiative is developed,
every site will establish and execute an
annual continuous improvement plan.
Having suffered significant operational
and customer disruption following the
North American footprint project, the
Statesville facility continued to be a key
focus during 2020. The strengthened
operational and leadership resources
and continuous improvement activities
delivered the planned improvements,
with the rate accelerating through the
second half through continued Lean
Excellence work. A number of other
continuous improvement initiatives
were executed in 2020 including kaizen
events, value-engineering activities,
and repatriation of multi-point lock
manufacturing to the UK. These
activities generated good cost-savings
in the year, with further benefits to be
realised in 2021.
Integrate recent M&A
Over the course of 2016 to 2018, the
Group undertook a series of successful
acquisitions. While the integration of
these businesses has largely been
undertaken to the extent planned,
activities are still underway with the
more recent acquisitions and there
is more we can do across previous
acquisitions to strengthen our platform
and extract greater leverage.
Ashland and Zoo have both significantly
exceeded the Group’s 14% return on
acquisition target after two years of
ownership, with Ashland delivering
its US$5.0 million annualised synergy
target. Integration of Reguitti and
Profab has progressed during the year,
however these businesses remain
below the return on acquisition target
and further optimisation is required
to deliver the expected benefits.
This work will continue in 2021, with
a number of projects underway to
improve performance.
Tune systems and processes
Systems and processes are increasingly
important in efficiently supporting
business operations management and
enabling high quality, agile decision
support to capitalise on opportunities
and better support our customers.
Investment has been made over the
last two years in upgrading IT systems
in the International division to move
towards a single ERP platform, with
another major site implementation
completed in early 2020. In 2021, a
programme of upgrades is underway
across other locations.
Tyman plcAnnual Report and Accounts 2020
Sustainable operations
Our ambition
To transform our health, safety and
environmental performance through
operational excellence.
Our targets
• Lost Time Incident Frequency Rate
<1.0 by 2022
• Total Recordable Incident Rate
<3.0 by 2026
• 40% reduction in water use m³/£m
revenue by 2022 (2019 baseline)
• 50% reduction in Scope 1 and 2
emissions (TCO2e/£m revenue) by
2026 (2019 baseline)
• Carbon neutral operations by 2030
(Scope 1 and 2 emissions)
• Zero waste to landfill
by 2026
Our contribution to the Sustainable Development Goals
SDG
Target
Our planned contribution
Target 8.8
Promote safe and secure
working environments for all
workers
Achieving world-class levels
of safety performance and
wellbeing programmes across
the Group’s global operations
Target 6.4
By 2030, substantially
increase water-use efficiency
and address water scarcity
Target 7.2
By 2030, increase
substantially the share of
renewable energy in the
global energy mix
Target 12.5
By 2030, substantially reduce
waste generation through
prevention, reduction,
recycling and reuse
Achieving water efficiency
targets and undertaking water
stress mapping to identify
priority areas for improvement
in our operations
Energy efficient operations,
use of renewable electricity
supplies and on-site renewables
to reduce our emissions of
greenhouse gases
Waste minimisation and
zero waste to landfill in our
operations
Safety
In 2020, we continued to build the
foundations for a strong safety culture
by deploying our 'Safety is our First
Language' communications campaign,
launched our flagship safety leadership
programme and deployed health
protection measures in response to the
COVID-19 pandemic. This delivered an
LTIFR improvement of 22%.
In 2021, we will seek to secure the
gains we have already made in safety
excellence by completing the roll out
of our safety leadership programme
and continuing to drive progress
towards an LTIFR of <1.0 by 2022. We
will also deploy up to four new global
safety standards to drive a common
approach and controls for the higher
risk activities across the Group such
as machinery safety, working at height
and manual handling.
Environment
We have set an ambitious goal to
become carbon neutral for our
operational emissions (Scope 1
and 2) by the end of 2030. This
will require a holistic approach to
energy efficiency, the procurement
of renewable electricity and battery
electric vehicles, the deployment of
renewable energy technologies and
other innovations. To support this,
we have signed up to the Science
Based Targets Initiative, whereby
we commit to publish a science-
based target over the next two years
that will align our carbon footprint
improvement activities to the level of
decarbonisation required to meet the
goals of the Paris Climate Agreement.
During the year, a new more
efficient water-cooling system for
the manufacture of die-cast zinc
components was commissioned in
Owatonna, our most water-intensive
plant.
In 2021, we will develop a best practice
guide for waste, water and energy
reduction to build capability and share
learnings across the Group to support
our environmental goals. We will also
quantify the Group’s full scope 3 carbon
footprint to inform the development
of a science-based target by 2022 and
confirm the level of ambition for the
Group’s longer-term ambitions to 2030
and beyond.
See pages 68 to 76 for more
detail on the Group’s approach to
safety excellence, managing its
environmental impacts, preparations
for the Task Force for Climate-
related Financial Disclosures (TFCD)
framework and the actions taken to
safeguard employee health during the
COVID-19 pandemic.
23
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Our strategy CONTINUED
Define
The Define strategic pillar centres on building cultural cohesion
across the Group to facilitate ongoing synergy extraction. There
are three sub-pillars to this: establishing ‘One Tyman’, developing
the 'Tyman Excellence System' and creating a sustainable culture.
Strategic outcomes
Progress in 2020
Priorities for 2021
Margin expansion
•
Engaged people
Positive impact
Finalised development of shared
purpose and values underpinned
by a Code of Business Ethics
•
•
Launch and embed the Group purpose,
values and Code of Business Ethics
Implement ethics leadership training
programme
• All-employee communications
enhanced, with two culture surveys
completed
•
•
Established Sustainability
Excellence roadmap and
commenced development of
playbooks to develop capability
across the Group
Established a Lean Excellence
roadmap and began to build
capability with expert recruitments
• Continue extending the Tyman
Excellence System to Sustainability,
Lean and IT
• Develop metrics for employee
engagement and retention
•
Initiate a group-wide Talent Excellence
roadmap
Establish ‘One Tyman’
‘One Tyman’ centres on building a
cohesive, high-performing culture
through definition of a common
purpose, set of values, Code of
Business Ethics and other culture
building blocks. This will facilitate
cross-divisional collaboration, and the
development and propagation of best
practice. The more visible connection
of our brands to a common parent
will also provide greater clarity for
customers when presenting our range
of brands.
During the year work was completed
on defining our purpose, values, Code
of Business Ethics and brand strategy,
with deployment of this across the
organisation now in progress. Details
of this are included in the purpose
and values section on pages 4 to 7.
Develop the ‘Tyman
Excellence System’
The Tyman Excellence System (TES)
is being developed as a means
of sharing best practice, thereby
developing groupwide capability and
focusing energy on the enhancement
of existing best practices rather than
duplication of effort. This will be
achieved through a set of processes,
playbooks and other toolkits to be
curated centrally through cross-
divisional working groups.
During 2020, the Safety Excellence
beachhead was further developed
and deployed through the
safety leadership programme; a
Sustainability Excellence plan was
established; and high-level roadmaps
for Lean Excellence and IT Excellence
were defined. In 2021, these
roadmaps will be further refined
and the actions progressed. Once
embedding of 'One Tyman' is well-
underway, work will begin to develop
the Talent Excellence roadmap.
24
Tyman plcAnnual Report and Accounts 2020
Sustainable culture
Our ambition
To be recognised as an employer that people want to
work for.
A sustainable culture is one that is built on foundations
of inclusivity and integrity, engages our people, grows
our talent through life-long learning, and creates value
for our communities.
Our contribution to the Sustainable Development Goals
SDG
Target
Our planned contribution
Target 16.5
Substantially reduce corruption and bribery
in all its forms
Building a culture of strong ethical practices
at all levels in the Group
Target 10.2
By 2030, empower and promote the social,
economic and political inclusion of all
Engaging our people and developing partnerships
and plans to help address social inequalities in our
local communities
Target 4.7
By 2030, ensure all learners acquire the
knowledge and skills needed to promote
sustainable development
Growing our talent through life-long learning;
harnessing the creativity of our people in
delivering more sustainable outcomes
Building a sustainable culture
Our Safety Excellence programme, started in 2019,
established the foundations for a strong safety culture
across the Group, but also started the move towards a
more cohesive and more empowered culture. In 2020, we
built on these foundations with our ‘Your Voice Matters’
campaign, engaging our full organisation to develop
the Group’s purpose and values through all-employee
surveys and focus groups. This was underpinned by the
development of a strong and engaging Code of Business
Ethics. These core culture building blocks create the basis
for ‘One Tyman’.
In 2021, we will train and empower our leadership
population to engage their teams on our purpose, values
and the Code of Business Ethics, embedding a common
language and behaviour expectations across the Group.
Activities will be supplemented by further training to ensure
our organisation has a behavioural understanding of what
is required to operate in line with the Code of Business
Ethics at all times. We will also run a comprehensive global
employee engagement survey to benchmark our current
position and define plans for improvement. A baseline of
people metrics will also be developed, including diversity
and inclusion measures.
Beyond this, to build a sustainable culture, a Talent
Excellence roadmap is required to both strengthen our
diversity and inclusion activities, and develop our talent
culture. We will also establish a programme to deliver
social value and address inequalities in local communities.
Ensuring our people are energised and enabled to perform
at their very best every day will continue to be a core
focus to ensure we are best positioned to deliver on our
growth plans.
More detail can be found on pages 77 to 78, including
diversity, our employee engagement processes, training
and development priorities and our contribution to local
communities.
25
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Our strategy CONTINUED
Grow
The Grow strategic pillar in the near term is focused on delivering sustainable organic share
gain, through executing well in serving our customers, developing and launching new products
and expanding our existing channels to market. In addition, we will seek to unlock the cross-
leverage potential inherent in our portfolio. In the mid-term, we will seek to supplement our
organic activities with M&A to better balance our geographic mix and strengthen our portfolio. We
continue to believe that Tyman is the natural consolidator in a fragmented market.
Strategic outcomes
Progress in 2020
Priorities for 2021
Margin expansion
Sustainable growth
Engaged people
Positive impact
• Strengthened North American sales team;
• Continued new product introductions
net wins of US$4m
• Develop new and deeper system
• Progress in developing e-commerce
house partnerships
platform
• Launched new connected home and other
sustainability-enhancing products
• Cross-divisional teams established to better
leverage portfolio
• 17% of 2020 revenues were derived from
products that positively contribute to the
SDGs. See page 79
• Achieved our first Cradle to Cradle product
certification
• Grow e-commerce routes to market
• Continue to develop strategies for
packaging
• Hazardous substances elimination in
products and supply chains
• Develop and execute strategies
to grow our revenue with positive
contribution products
Executing well in serving
our customers
The Group seeks to deliver a superior
customer experience, fostering
long-term partnerships through
excellent customer support, delivery
performance, and other value-adding
services. This includes close-coupling
with customers on design and just-
in-time sequenced components.
E-commerce capabilities and short
lead times are other elements of our
differentiated service offering.
Despite COVID-19 headwinds, the
strengthened North American sales
team has made good progress in
rebuilding customer trust following
the footprint-related customer losses
in H1 2019, achieving net customer
wins of c.US$4 million annualised
revenue in 2020. The flexibility of
our manufacturing footprint in North
America allowed us to capture share
through the pandemic as we were able
to rapidly adapt our operations to the
situation. During the year, there has
been a focus on enhanced sales and
operational planning, with capabilities
strengthened across all divisions.
Further work will be completed in 2021
to streamline systems and processes
to better harmonise service across
sites; provide more online content and
training webinars to support buying
26
decisions; and enhance our ecommerce
capabilities. The Group will commence
using a customer net promoter score
(NPS) metric to assess progress.
Innovation for
differentiated value
Innovation is our lifeblood for
organic growth. Our objective is
to develop a culture and discipline
of innovation in both products and
services which proactively address
changing market dynamics, customer
requirements, aesthetic trends,
evolve with latest technologies, and
enhance sustainability to create true
differentiated value for customers and
end-users.
COVID-19 inevitably caused some
disruption to product development,
launch, and marketing plans in 2020,
but initial sales for recent launches
have been encouraging. New products
launched in the year included
extensions to the ERA smartware
range, which address the acceleration
of home automation, several new
commercial access products, including
new types of smoke vents to address
the increasingly strict building
regulation and product certification
standards, and a concealed hinge
which enables a modern aesthetic and
greater expanse of glass.
In 2021, there is a strong pipeline of
new products due for launch and there
will be continued focus on development
of innovative products that provide
differentiated value to our customers
and end-users. This includes further
smartware/automation, ranges of
certified solutions, and products
that address life stage transition and
environmental challenges.
Channel expansion
The Group aims to deliver share gain
through optimising routes to market,
selling existing products through new
channels, and expanding into adjacent
markets. There are a variety of
initiatives underway across the Group.
The already growing adoption of digital
has been accelerated significantly due
to COVID-19, disrupting traditional
distribution channels and presenting
an opportunity to develop a superior
offering to capture share as the market
shifts. System houses are capturing
an increasing share of the market in
Europe and the GCC with closed eco-
systems which are driving innovation in
new ways. This eco-system approach
creates an opportunity to partner
closely with system houses, leveraging
our all-in-one hardware and seals offer,
providing strong recurring revenues.
In 2020, progress has been made with
enhancing e-commerce capability,
Tyman plcAnnual Report and Accounts 2020
particularly in the UK & Ireland division.
The digital marketing team has been
strengthened and work is underway
to create a best-in-class platform
for customers to transact with. The
other divisions are in the process of
developing e-commerce strategies.
Good traction is being gained with the
system houses, with innovation days
leading to partnership agreements
through the strength of the Giesse pull-
and-slide system.
Work on strengthening the
e-commerce strategy and systems
house partnerships will continue
in 2021. There will also be a focus
on optimising routes to market for
the smartware range, including
development of the accredited installer
scheme, and strengthening positioning
with online retailers and distributors.
Cross-portfolio leverage
There is significant value to be created
through better leveraging of the
Group’s product portfolio, brands
and technologies across our markets.
Cross-divisional teams have been
established to investigate a number of
specific opportunities which have been
identified to date and a full product and
market map is being completed.
There have been a number of early
wins demonstrating the value of cross-
portfolio leverage. Collaboration by the
global seals excellence team created
a further US$4 million of door seals
capacity, which will be used to both
support current customers and win new
business for high value, differentiated
applications. New product development
concepts are also being trialled. There
are several examples of cross-selling
success, including the Riyadh Metro
project, which involved products supplied
by all three divisions. Global expert
communities have been established to
drive forward other initiatives.
Work will continue in 2021 to investigate
a range of potential opportunities for
cross-portfolio leverage.
Collaboration delivers
award-winning
window system
Quaker Windows & Doors, a leading US manufacturer
of residential and commercial windows and doors,
approached AmesburyTruth to be a strategic
development partner for a revolutionary new series
of windows that would feature Quaker’s patented
OptiCore® technology. OptiCore’s architecturally
enhanced aluminium frame design delivers industry-
leading structural, thermal and sound performance.
Quaker wanted to use AmesburyTruth’s Contour™
commercial casement and awning window hardware
system, due to its superior load carrying capacity and
operating leverage for ease of operation. However,
they also wanted to leverage Euro groove technology
to enable the hardware to be quickly and accurately
installed in the window with the flexibility to adjust in
the factory or the field, while also providing the right
structural performance.
AmesburyTruth introduced Giesse’s Euro groove
system to Quaker and then collaborated with Quaker
to design and integrate this technology into their
luxury CityLine and TimberLine window ranges. The
resulting solution uses the AmesburyTruth Contour™
commercial casement hardware series, including
modified awning operators and locks to fit to the
Euro groove system, together with the Giesse CHIC
concealed hinge system.
The ability to combine the strength of our
AmesburyTruth and Giesse ranges to collaborate
with Quaker created a unique, award winning
window system that is changing the North American
industry’s perception of architectural aluminium
windows. This project serves as an example of the
power of collaboration between Tyman divisions in
developing best-in-class engineered solutions.
AmesburyTruth was the clear choice when
our design team was looking for the right
strategic partner, given their deep expertise,
breadth of differentiated portfolio, and ability
to leverage Giesse’s Euro groove solutions.
We collaboratively designed the right solution
to complement the performance of our
Opticore Technology resulting in the creation
of our award-winning window systems.”
Dave Harrell
Director of Product Development, Quaker Windows
27
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Our strategy CONTINUED
Sustainable solutions
Our ambition
To offer more innovative products and services to help our
customers reach net zero, promote circularity and create
safer, more inclusive communities.
Our targets
• 100% sustainable product packaging by 2026
• Year-on-year increase in % revenues from products
that positively contribute to the UN SDGs
Our contribution to the Sustainable Development Goals
SDG
Target
Our planned contribution
Target 7.3
By 2030, double the global rate of
improvement in energy efficiency
Products that save energy by reducing thermal losses in
buildings such as Q-Lon window seals and thermally insulated
roof hatches (climate change mitigation)
Target 13.1
Strengthen resilience to adaptive
capacity to climate-related natural
disasters
Target 11.1
By 2030, ensure access for all to
adequate, safe and affordable housing
Severe weather protection solutions such as high strength
multi-point hinged patio door locks and roof hatches for
hurricane vulnerable locations (climate change adaptation)
Products that reduce community crime rates (alarms and
high-security certified locks are proven in crime reduction
studies), prevent injury and/or ill-health (fire protection
products and fall prevention e.g. Pegasus and SafeGard™
child safety devices for windows, safety handrail systems
for roof hatches, lockdown security products and anti-
bacterial coatings for door handles), or promote inclusive
living for disadvantaged/vulnerable groups such as extended
lever hardware and hybrid balances used in nursing homes
allowing easy opening by elderly or disabled users
Target 8.4
Improve global resource efficiency
in consumption and production to
decouple economic growth from
environmental degradation
Incorporating recycled content and responsibly sourced
materials in our products throughout our supply chain and
new product development processes. Driven by growth in
sustainable building certification such as BREEAM, LEED and
net zero strategies
Target 12.2
By 2030, achieve the sustainable
management and efficient use of
natural resources
Target 12.4
Achieve the sound management of
chemicals and all wastes throughout
their lifecycle
Ensuring we use sustainable packaging and eliminate
hazardous chemicals / substances in our supply chains and
address the lifecycle environmental impacts of our products,
through for example, Environmental Product Declarations
(EPDs) and C2C product certifications
28
Tyman plcAnnual Report and Accounts 2020
Sustainable products
In 2020, we completed an initial
assessment of product sales that
we consider are sustainable in
terms of those that deliver positive
environmental or social benefits in
their use when mapped against the
UN Sustainable Development Goals.
We are also developing a deeper
understanding of the lifecycle impacts
of products and have successfully
completed our first environmental
product label through the C2C
certification process for foam and
brush pile seals. In 2021, the Group
will extend its C2C work to other
products.
Packaging
The Group has commenced work to
develop more sustainable packaging
solutions by moving to more
sustainable materials (renewable
or fully recyclable) and avoiding
single-use plastic packaging where
possible. Positive early results
have been achieved with more
sustainable alternatives being found
for polystyrene and bubble-wrap.
Research is also underway into plastic
films made from sugarcane and 100%
recycled plastic.
In 2021, we will improve our data
capture systems to track revenues
from product sales that positively
impact the SDGs and develop a
systematic approach to embed
sustainability thinking into our new
product development programmes. We
will also review our product packaging
and develop plans to transition to fully
sustainable packaging by 2026. Finally,
we will inventorise the chemicals
and other hazardous substances in
products and processes across our
supply chains, prioritise those that
should be eliminated, and establish
plans to do this.
Schlegel achieves silver
C2C certification for foam
and brush pile seals
In response to the growing demand for building products
with lower environmental impacts, the Group achieved its
first Cradle to Cradle (C2C) Certification for our Schlegel
seals products (foam and brush pile). Cradle to Cradle
Certified™ is recognised as a preferred product certification
by many leading brands, organisations and building
sustainability certifications such as LEED, BREEAM and the
WELL Building Standard.
It uses a multi-attribute, continuous improvement
methodology to evaluate products across five categories
including material health, circular economy, renewable
energy and carbon management, water stewardship and
social fairness. Products are assigned an achievement level
(Basic, Bronze, Silver, Gold, Platinum) for each category and
continuous improvement is encouraged over time by awarding
future certifications based on progress made. In early 2021,
our range of Giesse aluminium hinges will be submitted for
C2C assessment.
Further information on sustainable products and packaging
can be found on page 79.
The work of the Cradle to
Cradle Products Innovation
Institute sets the global
standard for products that
are safe, circular and made
responsibly.”
Kristof Debrabandere
Coordinator Cradle to Cradle Platform
29
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Case study
Enhancing Crossrail's safety
The new Elizabeth line is set to deliver a 10% increase
in rail capacity across central London, providing a
high frequency service that links 41 stations across
100 kilometres.
Over 350 of Bilco’s innovative aluminium Ladder
Up® safety posts have been specified by Crossrail’s
systemwide contractor Alstom TSO Costain Joint
Venture (ATC Systemwide) to provide safe and secure
access. Weighing just seven kilograms due to the milled
aluminium construction, the resilient Ladder Up® safety
posts will provide engineers with unobstructed access to
the walkways when conducting essential maintenance
throughout the tunnels.
The specification process focused on the requirement
for durable yet functional access solutions that would
consistently provide a safe and direct step through onto
the walkway, without impacting on the surrounding
electrical services. The high-quality Ladder Up® safety
post includes unique features such as an innovative
telescopic post, which is mounted permanently to
provide safe access for the user. The corrosion resistant
construction can also withstand the demanding
environment of the London underground system,
ensuring its successful operation for years to come.
When we first began researching
potential access solutions for the Crossrail
project’s central section, it became clear
quite quickly that the Bilco UK Ladder
Up® Safety Post was the only product
available on the UK market that would
fulfill our extensive list of requirements.
The telescopic extension was one of
the main benefits that secured its
specification for this project, as it enables
the Ladder Up® safety post to be both
retracted and extended, a key function
that wasn’t available with any other
access solution.”
Clive Burfoot
Contract Manager at McNealy Brown
30
Tyman plcAnnual Report and Accounts 2020 Key performance indicators
Measuring our performance
The Group continually monitors progress in delivery of our
strategic goals using six financial and two non-financial key
performance indicators (‘KPIs’).
The KPIs prior to 2019 exclude the impact of IFRS 16 ‘leases’ which
was adopted in 2019.
Certain KPIs use Alternative Performance Measures (APMs).
For definitions and reconciliations, see pages 183 to 188.
Link to strategy
Margin expansion
Sustainable growth
Engaged people
Positive impact
1 Like-for-like (LFL)
revenue growth
2 Adjusted operating
margin expansion
−6.0%
14.0%
3 Return on capital
employed
12.3%
20
19
18
17
16
−6.0%
−1.8%
2.7%
1.7%
0.9%
20
19
18
17
16
14.0%
13.9%
14.1%
14.7%
15.3%
20
19
18
17
16
12.3%
12.0%
13.4%
13.6%
13.8%
14%
Target
Strategic outcomes
Strategic outcomes
Strategic outcomes
Purpose
This KPI is used to evaluate
the ability of the Group to grow
its business organically and
excludes the impact of currency
translation and acquisitions and
divestments.
Target
To grow revenue organically
year-on-year.
2020 performance
LFL revenue reduced by
6.0%, driven by the impact
of COVID-19. This primarily
impacted the first half of the
year, with demand rebounding
strongly in core markets
through the second half once
restrictions were eased.
For further information, see the
Financial review on pages 46
to 53.
Purpose
This KPI is used to evaluate the
profitability and financial health
of the Group.
Target
To maintain and improve
operating margins through
management of the Group’s
processes as well as overheads
and administrative costs.
2020 performance
Adjusted operating margin
increased by 10bps to 14.0%,
driven by temporary cost
management actions taken
to manage through COVID-19
and the benefit of continuous
improvement activities,
including footprint optimisation.
These benefits were partially
negated by additional costs and
operational inefficiencies due to
COVID-19.
For further information, see the
Financial review on pages 46
to 53.
Purpose
This KPI is used to evaluate how
efficiently the Group’s capital
is being employed to improve
profitability.
Target
To maintain and steadily
improve ROCE, with a medium
term target of 14.0%.
2020 performance
ROCE increased by 30bps to
12.3% (2019: 12.0%), reflecting
the reduction in capital
expenditure and a significant
reduction in average working
capital resulting from the lack of
seasonal build due to COVID-19,
as well as a reduction in the
carrying value of intangible
assets through amortisation.
For further information, see the
Financial review on pages 46
to 53.
31
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Key performance indicators CONTINUED
4 Adjusted basic EPS
5 Return on acquisition investment
7 Lost time incidents
27.2p
20
19
18
17
16
27.2p
27.5p
27.7p
27.0p
25.4p
2020 run rate ROAI
Ashland
Zoo
Profab
Reguitti
17.9%
18.6%
8.8%
5.2%
Target 14%
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Purpose
This KPI is a key measure for
our shareholders. It is used
to assess the profitability of
the business and the profit
generated for equity holders.
Target
To improve adjusted EPS
performance year-on-year.
2020 performance
Adjusted basic earnings per
share decreased by 0.9% to
27.2 pence as a result of the fall
in adjusted operating profit due
to COVID-19, partially offset by
reduced finance costs due to
significantly lower average net
debt.
For further information, see the
Financial review on pages 46
to 53.
H1 2020 by COVID-19 lockdown
measures. Productivity has
improved markedly and sales
rebounded well in the second half.
Further improvement is expected
through the Access 360 business
optimisation initiative.
Reguitti reached two years
of ownership in August 2020,
achieving an LTM run rate ROAI of
5%, which is substantially below
the target threshold. Performance
was significantly impacted by
COVID-19 due to its location in
Northern Italy. The full functional
integration has been completed
and cross-selling activities
have gained traction following
integration of the sales force.
For further information, see the
Financial review on pages 46 to
53.
Purpose
This KPI is measured during the
first two years of ownership and
is used to evaluate the returns
achieved by the Group from its
investments in material business
acquisitions.
Target
For all acquisitions to achieve
an LTM run rate ROAI greater
than 14% within two years of
acquisition.
2020 performance
Ashland and Zoo Hardware have
continued to perform well, with
both exceeding the 14% minimum
target return threshold after two
years of ownership, in March 2020
and May 2020 respectively.
Profab reached two years of
ownership in August 2020,
achieving an LTM run rate ROAI
of 9%, which is significantly
below the target threshold. The
business suffered from operational
bottlenecks in the second half
of 2019, impacting productivity
and was significantly impacted in
Link to strategy
Margin expansion
Sustainable growth
Engaged people
Positive impact
32
shareholders and make further
of our safety excellence
8 Greenhouse
gas emissions
70.5
TCO2e per £m revenue
3.12
23
4.00
34
4.81
44
6.15
49
5.85
44
20
19
18
17
16
70.5
69.2
79.9
73.5
61.6
23
20
19
18
17
16
Purpose
The number of lost time
incidents and the lost time
incident frequency rate are
used to evaluate progress
programme and progression
toward our LTIFR targets.
Target
To reduce the LTIFR rate
each year to <1.0 by 2022.
2020 performance
The Group is pleased to report
continued progress made in
safety excellence, with an
improvement in the lost time
incident frequency rate of 22%
to 3.12. This measure includes
12 positive COVID-19 cases
resulting from exposure at
cases, the number of LTIs was
11 and the LTIFR was 1.49.
For further information, see the
Sustainability report on pages
68 to 79.
Purpose
Greenhouse gas emissions
is a key indicator of the
progress made in minimising
the impact of our operations
on the environment in line
with the Sustainable Operations
pillar in our roadmap.
Target
To reduce our carbon emissions
and improve energy efficiency,
with a 50% reduction in
emissions achieved by 2026.
2020 performance
Our Scope 1 and 2 emissions in
TCO2e per £m revenue increased
by 1.3% in 2020 to 70.52 (2019:
69.22), with reduced sales over
the year impacting the Group’s
performance against this
For further information, see the
Sustainability report on pages
68 to 79.
work. Excluding these COVID-19
intensity measure.
6 Operating cash
conversion
130.9%
20
19
18
17
16
130.9%
132.2%
92.4%
85.6%
105.9%
108.6%
5 year average
Purpose
This KPI is used to evaluate
the cash flow generated by
operations in order to pay
down debt, return cash to
investment in the business.
Target
To maximise conversion of the
Group’s adjusted operating
profit into cash over any twelve
month period while continuing
to make the necessary capital
investments to support the
growth of the business.
2020 performance
Operating cash conversion
reduced slightly to 130.9%,
principally due to a significant
focus on working capital
optimisation and management
of capital expenditure in 2019.
Operating cash conversion
in 2020 has again been
higher than the longer-term
average due to the continued
management of capital
expenditure and costs during
the year due to COVID-19.
For further information, see the
Financial review on pages 46
to 53.
Tyman plcAnnual Report and Accounts 2020
27.2p
20
19
18
17
16
27.2p
27.5p
27.7p
27.0p
25.4p
2020 run rate ROAI
Ashland
Zoo
Profab
Reguitti
17.9%
18.6%
8.8%
5.2%
Target 14%
Purpose
This KPI is a key measure for
our shareholders. It is used
to assess the profitability of
the business and the profit
generated for equity holders.
Target
To improve adjusted EPS
performance year-on-year.
2020 performance
Adjusted basic earnings per
share decreased by 0.9% to
27.2 pence as a result of the fall
in adjusted operating profit due
to COVID-19, partially offset by
reduced finance costs due to
significantly lower average net
debt.
For further information, see the
Financial review on pages 46
to 53.
H1 2020 by COVID-19 lockdown
measures. Productivity has
improved markedly and sales
rebounded well in the second half.
Further improvement is expected
through the Access 360 business
optimisation initiative.
Reguitti reached two years
of ownership in August 2020,
achieving an LTM run rate ROAI of
5%, which is substantially below
the target threshold. Performance
was significantly impacted by
COVID-19 due to its location in
Northern Italy. The full functional
integration has been completed
and cross-selling activities
have gained traction following
integration of the sales force.
For further information, see the
Financial review on pages 46 to
53.
Purpose
This KPI is measured during the
first two years of ownership and
is used to evaluate the returns
achieved by the Group from its
investments in material business
acquisitions.
Target
For all acquisitions to achieve
an LTM run rate ROAI greater
than 14% within two years of
acquisition.
2020 performance
Ashland and Zoo Hardware have
continued to perform well, with
both exceeding the 14% minimum
target return threshold after two
years of ownership, in March 2020
and May 2020 respectively.
Profab reached two years of
ownership in August 2020,
achieving an LTM run rate ROAI
of 9%, which is significantly
below the target threshold. The
business suffered from operational
bottlenecks in the second half
of 2019, impacting productivity
and was significantly impacted in
4 Adjusted basic EPS
5 Return on acquisition investment
6 Operating cash
7 Lost time incidents
conversion
130.9%
20
19
18
17
16
23
20
19
18
17
16
3.12
23
4.00
34
4.81
44
6.15
49
5.85
44
130.9%
132.2%
92.4%
85.6%
105.9%
108.6%
5 year average
••—— Lost time incident
frequency rate
8 Greenhouse
gas emissions
70.5
TCO2e per £m revenue
20
19
18
17
16
70.5
69.2
79.9
73.5
61.6
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Purpose
The number of lost time
incidents and the lost time
incident frequency rate are
used to evaluate progress
of our safety excellence
programme and progression
toward our LTIFR targets.
Target
To reduce the LTIFR rate
each year to <1.0 by 2022.
2020 performance
The Group is pleased to report
continued progress made in
safety excellence, with an
improvement in the lost time
incident frequency rate of 22%
to 3.12. This measure includes
12 positive COVID-19 cases
resulting from exposure at
work. Excluding these COVID-19
cases, the number of LTIs was
11 and the LTIFR was 1.49.
For further information, see the
Sustainability report on pages
68 to 79.
Purpose
Greenhouse gas emissions
is a key indicator of the
progress made in minimising
the impact of our operations
on the environment in line
with the Sustainable Operations
pillar in our roadmap.
Target
To reduce our carbon emissions
and improve energy efficiency,
with a 50% reduction in
emissions achieved by 2026.
2020 performance
Our Scope 1 and 2 emissions in
TCO2e per £m revenue increased
by 1.3% in 2020 to 70.52 (2019:
69.22), with reduced sales over
the year impacting the Group’s
performance against this
intensity measure.
For further information, see the
Sustainability report on pages
68 to 79.
Purpose
This KPI is used to evaluate
the cash flow generated by
operations in order to pay
down debt, return cash to
shareholders and make further
investment in the business.
Target
To maximise conversion of the
Group’s adjusted operating
profit into cash over any twelve
month period while continuing
to make the necessary capital
investments to support the
growth of the business.
2020 performance
Operating cash conversion
reduced slightly to 130.9%,
principally due to a significant
focus on working capital
optimisation and management
of capital expenditure in 2019.
Operating cash conversion
in 2020 has again been
higher than the longer-term
average due to the continued
management of capital
expenditure and costs during
the year due to COVID-19.
For further information, see the
Financial review on pages 46
to 53.
33
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Chair’s statement
Nicky Hartery
Non-executive Chair
Ensuring the
health and
safety of our
employees,
families and
communities
34
Introduction
2020 has been a year of
unprecedented turmoil as the
COVID-19 pandemic swept across
the world. Having joined the Board in
October 2020 and succeeded Martin
Towers as Chair from 1 December
2020, I have been impressed by
Tyman’s response to the pandemic
and the agility and commitment
shown by the leadership team and
employees. On behalf of the Board,
I would like to extend my thanks to
all our people for their hard work and
determination through what has been
an incredibly challenging year.
Performance overview
The Group’s performance was
resilient against significant disruption
arising from COVID-19. After a solid
start to the year, COVID-19 required
closure of many of our facilities, and
progressively impacted trading from
mid-March onwards. Since lockdown
measures were eased, trading has
rebounded strongly, to deliver LFL
revenue and LFL adjusted operating
profit 6% lower than 2019. In spite of
the disruption, the Group delivered
strong cash conversion of 131% for
2020, resulting in leverage of 1.1x
adjusted EBITDA, achieving the new
target range ahead of expectations.
Dividends
In light of the uncertainty due to
the pandemic, the Board adopted
a prudent approach to shareholder
distributions and withdrew the final
2019 dividend and did not declare an
interim dividend for 2020. The Board
has carefully considered the strength
of performance since lockdown
measures were eased, the robustness
of the balance sheet, and the interests
of all stakeholders. Having repaid
funds received under the UK job
retention scheme and employee
salary reductions in December 2020,
the Board considers it appropriate
to declare a modest final dividend
for 2020.
The Board is therefore proposing a
total dividend for the 2020 financial
year of 4 pence per share, reflecting
confidence in the prospects of
the business. The Board remains
committed to a progressive dividend
policy over the medium term. The
dividend will be paid on 28 May 2021
to shareholders on the register at the
close of business on 23 April 2021.
People and culture
The Board’s first priority through
COVID-19 has been ensuring the
health and safety of our employees,
their families and our communities.
The Board met more frequently to
oversee the Group’s response to the
crisis and was very cognisant of the
need to balance the interests of all
stakeholder groups in decisions taken.
Further details of our response to the
COVID-19 pandemic are included in
the CEO statement on pages 36 to 38.
The Board worked closely with
management and many of our people
during the year to develop a clear
articulation of the Group’s purpose,
along with a set of values which
embody this. The views of employees
were sought and considered by the
Board through review of the results
of employee surveys and skip-level
meetings held by the Workforce
Engagement NED, Pamela Bingham.
Work will continue in 2021 to fully
embed the new cohesive culture and
become a more purpose-led business.
Sustainability
The Group is committed to increasing
its contribution to a more sustainable
world through its operations, culture,
and solutions and this is a key area of
focus for the Board. Good progress
was made in 2020, with sustainability
being embedded in the strategy and
a roadmap and set of targets put in
place. Work is also underway to achieve
compliance with the Task Force on
Climate-related Financial Disclosures
(TCFD) recommendations. Further
details are set out in our strategy on
pages 20 to 30 and our Sustainability
report on pages 68 to 79.
Strategy
The Board oversaw completion of the
strategy review which commenced
in 2019 after appointment of the
new leadership team, with the new
strategy of ‘focus’, ‘define’ and ‘grow’
being implemented. The strategy
is grounded in the Group’s purpose
and seeks to create long-term value
for all our stakeholders. Despite the
impact of COVID-19, good progress
was made with the strategic priorities,
with many of the foundational
activities to strengthen the base
successfully executed and progress
made with the growth initiatives. The
strength of the balance sheet leaves
the business well-placed to resume
M&A activity when the time is right.
Further details of our strategy are set
out on pages 20 to 30.
Board changes
There were a number of changes
to the Board during the course of
2020. I joined the Board as a Non-
executive Director on 1 October 2020
and succeeded Martin Towers as
Chair of the Board and Nominations
Committee on 1 December 2020.
Tyman plcAnnual Report and Accounts 2020 As announced in 2019, Mark Rollins
stepped down from the Board on 31
March 2020 and was replaced by Dr
Paul Withers who brings extensive
international experience, and in
particular, a strong knowledge of US
markets to the Board. On behalf of
the Board, I would like to thank Martin
Towers and Mark Rollins for their
significant contributions to Tyman
and its development, and to welcome
Paul Withers to the Group. Further
details concerning the work of the
Nominations Committee during the
year are set out on pages 89 to 91.
Paul Withers and I have enjoyed
participating in several virtual facility
tours, receiving presentations from
each of the divisional management
teams, and getting to meet many of
our people. We have also met with
a range of institutional shareholders
and advisors of the Group.
Governance
The Board is committed to good
corporate governance and recognises
the important role it plays in
supporting our long-term success
and sustainability. The Group’s
Governance report can be found
on pages 82 to 88 and provides an
overview of Tyman’s governance
framework, as well as the work of
the Board and its Committees.
During the year, the Board spent
considerable time overseeing and
supporting management with the
Group’s response to COVID-19, as
well as establishing the Group’s
purpose and values, and reviewing
the evolution of the strategy. The
Board continues to value effective
relationships with all stakeholders
and further extend its stakeholder
engagement activities.
Summary
Since joining the Board, I have
been impressed by the strength of
Tyman’s innovation capabilities and
differentiated product and service
offering. The way the Group has
navigated through the crisis has
highlighted the strength and resilience
of the business model and robustness
of the balance sheet. I believe there
is significant value-creation potential
through further organic share gain as
markets recover and a return to M&A
activity when the time is right.
Nicky Hartery
Non-executive Chair
4 March 2021
35
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Chief Executive Officer’s review
From mid-March until early May,
trading was progressively impacted
as increasingly stringent lockdowns
took effect in our core markets. We
responded accordingly, temporarily
closing our facilities in Italy from the
middle of March until the middle of
April and in the UK from late March
until early May. Our North American
sites continued to operate throughout
the period, apart from the two facilities
in Juarez which were closed for most
of May. However, we experienced
a marked reduction in order intake
through April and May. Most of the
International division distribution
and sales office sites were closed for
various time periods in accordance with
local guidelines.
From the resumption of operations in
late April, trading rebounded strongly.
This was driven in part by the pent-
up demand created during lockdown,
but underlying market dynamics were
also very strong. Furthermore, in
North America the normal peak season
continued later into the year than
usual, leading to exceptional growth of
20% in December for the Group. With
the strength of recovery since initial
lockdowns were eased, no government
support was taken after 31 July, and in
December the Group repaid the funds
received under the UK government
scheme of £2.3 million. The Group was
also pleased to be able to repay the
salary and benefit reductions taken by
our employees below Board level. This
included repaying government receipts
and salary reductions in respect of
the Ventrolla business which had been
divested in November 2020.
LFL revenue vs 2019
North America
UK & Ireland
International
Group
Q2
Q1
-24%
+2%
-54%
-1%
-17%
-27%
-2% -29%
Q3
+1%
+3%
+9%
+3%
Q4 FY 2020
-3%
-13%
-9%
-6%
+11%
Flat
-1%
+7%
In the US, the combination of low
mortgage rates, the lack of inventory
for both new and existing homes
and the increasing rate of millennial
household formation has driven strong
momentum in both single-family
starts and RMI activity through the
year. On top of this, the pandemic
has created additional momentum
with the increased time at home and
reduced expenditure on travel and
entertainment leading to expenditure
on the home being prioritised, further
heightened by a so-called 'urban
flight' trend as people seek to move
out of cities into suburbs and more
rural areas. Finally, fiscal stimulus
is also supportive in many markets,
for example the ‘green’ schemes and
stamp duty holiday in the UK. We have
taken steps to increase production
levels and are engaging closely with
customers and suppliers to manage
demand, as the rapid recovery in
demand has put pressure on inventory
and service levels industry-wide.
Implementation of COVID-safe working
practices, production continuity and
ramp-up measures, and global shipping
disruptions resulted in additional costs
being incurred as demand increased
rapidly. The impact of this and the sales
shortfall was partially mitigated by the
swift cost management actions taken,
as well as the benefits of self-help
initiatives. Consequently, LFL adjusted
operating profit declined 6% to £80.3
million. Reported adjusted operating
profit decreased 6%, with the slightly
unfavourable impact of exchange rates
offset by a benefit from the disposal
of the loss-making Ventrolla business.
Adjusted operating margin increased
from 13.9% to 14.0%, a pleasing result
under the circumstances.
The close management of expenditure
generated another year of strong
operating cash conversion of 131%
(2019: 132%). Combined with the
savings from the cancellation of
dividends, this resulted in a reduction
in leverage to 1.1x adjusted EBITDA
(2019: 1.7x), towards the bottom end
of the target range announced in H2
2019.
Health and safety
The health and safety of our people
is our top priority. We have continued
to make good progress embedding
this focus on safety within our
culture through the ‘safety is our first
language’ engagement programme.
Pleasingly, the lost time incident
frequency rate reduced by 22%
to 3.1 incidents per million hours
worked (2019: 4.0). This includes 12
positive COVID-19 cases resulting
from transmission in the workplace.
Excluding these COVID-19 cases, the
lost time incident frequency rate was
1.5, a 63% reduction.
Strategic progress
Tyman’s strategy of Focus, Define,
Grow will strengthen the Group and
further enhance our portfolio of
world class brands and differentiated
products to deliver meaningful value
to our stakeholders. The Group’s
strategy is underpinned by our three
sustainability pillars – Sustainable
Operations, Sustainable Culture, and
Sustainable Solutions. Embedding
sustainability and developing our
Jo Hallas
Chief Executive Officer
Balancing our
stakeholders
while building
our resilience
2020 was a year of unprecedented
challenges due to COVID-19. I would
like to thank our people who have done
an exceptional job of managing through
the intensity of the COVID-19 crisis,
with diligent focus on safeguarding
our colleagues and communities and
servicing our customers. I would also
like to extend my gratitude to our
customers, suppliers and shareholders,
all of whom have given their support
and understanding through this
extraordinary period.
Performance in 2020
The Group’s performance in 2020 was
inevitably impacted by COVID-19.
Revenue for the year was £572.8
million (2019: £613.7 million), a
decrease of 7% on a reported basis,
and 6% on a LFL basis. Reported
revenue was impacted by the slight
strengthening of sterling compared
with 2019 and the divestment of the
Ventrolla business in November 2020.
The Group had a solid start to the
year before the impact of COVID-19
took effect, achieving LFL growth of
2% in Q1 in North America, where
the housing market continued to be
buoyant in line with the momentum
experienced in Q4 2019. The UK
reported LFL sales growth across
January and February of 8% following
the decisive election result in
December 2019. The International
division had a more challenging start to
the year, with markets continuing to be
weak coming into the year, and China
and Italy impacted by COVID-19 earlier
than other territories.
36
Tyman plcAnnual Report and Accounts 2020
action plan was a key focus during the
year, and the importance of this to
the Group and our stakeholders has
only been heightened by COVID-19.
A set of targets has been defined to
help us increase our contribution to
sustainability and our disclosures
have been expanded as we take
steps towards implementing the
recommendations of the Task Force on
Climated-related Financial Disclosures
(TCFD). Further work will be completed
during 2021.
Although the primary focus during
the year has inevitably been intensive
management of the COVID-19 crisis
and the recovery in demand, good
progress has also been made with our
strategic priorities. The Group believes
the strategy continues to be the
right one in the context of COVID-19
and that there are opportunities to
accelerate aspects of the strategy as
we emerge from the crisis.
The Focus strategic pillar aims to
streamline and strengthen the base for
future growth. Over 2020, this pillar has
progressed as planned. The activities
to optimise the Statesville facility
have delivered the improvements
targeted for the year, with the benefits
accelerating through the second half.
Elsewhere in the Group, the various
initiatives to streamline operations,
which included closure of facilities
and several inter-site production line
transfers, have been executed as
planned with no customer disruption.
The small Ventrolla business, which was
non-core to our portfolio was divested
in November 2020.
The Define strategic pillar centres on
building cultural cohesion across the
Group to facilitate ongoing synergy
extraction. This has continued to
gain momentum, with all employee
participation in the development of
a shared purpose and set of values.
Work is underway to deploy and
embed our new ‘One Tyman’ culture
and this will continue through 2021.
Development of the ‘Tyman Excellence
System’ which seeks to develop and
share best practice has also progressed
well, with Safety Excellence now
well-embedded and a groupwide Lean
Excellence programme now defined.
Working groups have been established
to progress other areas, including IT
Excellence.
The Grow strategic pillar will in the
near-term have the most impact
from the divisional organic initiatives
underway, including market share
gains as a result of superior customer
execution, accelerating new product
launches and expansion of our existing
channels to market. Despite COVID-19
headwinds, we have continued to
progress the various initiatives, with
the strengthened North America sales
team delivering net customer wins of
c.US$4 million annualised revenue,
and cross-divisional teams established
to identify specific opportunities in
order to better leverage the Group’s
portfolio. There were inevitably some
delays to new product development
and launches, but products launched
in 2019 are continuing to gain traction
and there is a strong 2021 pipeline.
Mid-term, Tyman continues to be the
natural consolidator in a fragmented
market and we would intend to
supplement our organic growth with
acquisitions that either bring products
and technologies of future strategic
importance, or balance out our
geographic presence across our core
markets.
We will present more about our mid-
term plans at a Capital Markets Day,
which we are planning to hold in May.
Changes to the Executive
Committee
Helen Downer has been appointed to
lead the UK & Ireland division from
April 2021, replacing Darren Waters
who is leaving to join Ibstock plc.
Helen joined Tyman as the Commercial
Director for the UK & Ireland division
in 2019. She has over 20 years of
experience in the building products
industry across a range of functional
and general management roles.
Outlook
The strength of the recovery has
continued to exceed expectations,
particularly in residential markets,
supported by the positive market
trends and low interest rates in
core markets. This momentum has
continued into early 2021, with
order levels remaining robust. There
is optimism that this will continue
through at least the first half of the
year. Beyond this, there remains
uncertainty given the macro-economic
impact of the crisis is currently masked
by government support measures,
and policy changes by the new US
Administration are as yet unclear.
The recovery of commercial markets
has lagged behind residential, with
project planning activity being delayed
through the crisis, reduced investment
in retail and leisure infrastructure and
multi-family housing starts falling, in
favour of single-family. This slower
recovery is expected to continue in
2021, although there may be benefit
from further infrastructure stimulus.
Pressure on logistics and rising freight
costs due to the level of disruption to
global shipping caused by COVID-19
will create a headwind in 2021. The
spike in demand for goods globally
has also begun to impact raw material
availability and costs. We are working
closely with suppliers and customers to
manage the impact. Pricing actions are
being implemented where necessary to
recover cost inflation.
Long-term, structural trends are
favourable to the Group, with some
new and accelerated trends emerging
as a result of the pandemic. These
include increased time spent at home,
'urban flight' driving more premium
single-family housing activity, and
accelerated adoption of e-commerce.
The Group is well-placed to capitalise
on these opportunities.
Summary
COVID-19 had a significant impact
on the Group in 2020. I am incredibly
proud of our people who have shown
tremendous commitment in navigating
the pandemic and responding
dynamically to our customers'
requirements. The strength of the
market recovery through the second
half of the year significantly exceeded
our expectations.
The crisis has emphasised the strength
of the Tyman business model, with
the diversification across geographies
and markets providing resilience, our
innovation capabilities allowing us
to quickly adapt to changing trends,
and the cash generative nature of the
business supporting our balance sheet.
Despite the impact of COVID-19, good
progress has been made on self-help
measures and strategic initiatives,
including successful execution of
footprint realignments, divestment
of Ventrolla, development of our
sustainability roadmap and launch of
the ‘One Tyman’ culture platform.
In 2021, the focus will be on navigating
the challenges and opportunities as the
COVID-19 crisis recedes, implementing
further self-help measures, and
driving market share gains through
new product launches and excellent
execution. The resilience of our
business model and inherent strengths
including market-leading brands,
innovation capabilities and deep
customer relationships continue to
position Tyman well for future growth.
Jo Hallas
Chief Executive Officer
4 March 2021
37
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Chief Executive Officer’s review CONTINUED
COVID-19
Balancing our
stakeholders
Our people
The Group’s first priority has been
ensuring the health and safety
of our employees, their families
and our communities. We acted
quickly to implement enhanced
hygiene and social distancing
measures across the Group.
Regular communications with
all employees were established
throughout the crisis, including
reminding employees of mental
wellbeing assistance available to
them. In certain locations, the
Group has provided or expanded
company transportation to
avoid employees being exposed
to public transport and ensure
social distancing. Further details
of how we supported our people
are included in the Sustainability
report on pages 68 to 79.
Our customers
The Group has supported
customers through the crisis,
with enhanced communication to
understand changes in demand
and manage service levels,
implementing paperless and non-
contact delivery services, providing
advice on implementing hygiene
and social distancing measures,
and agreeing payment plans to help customers trade
through where needed. Our people worked with
exceptional agility to minimise customer disruption
during site closures in the early stages of the pandemic.
In the absence of being able to visit customers,
technology was used to maintain engagement, with
webinars and virtual workshops being held.
Our suppliers
Close contact has been maintained with suppliers
throughout to assist in managing demand, and although
disruption to global shipping has caused some delays
towards the end of the year, our supply chain has not
been a constraint. Relaxations of payment terms were
initially agreed with some suppliers; however, all suppliers
have been paid in line with terms since July.
Our shareholders
As COVID-19 took hold, swift and decisive action
was taken to optimise cashflow via cost savings,
working capital reduction, tight management of capital
expenditure, cancellation of the final 2019 dividend, and
no interim 2020 dividend being declared.
As part of the leadership’s response, the Board and
senior management elected to take a temporary base
salary reduction of 25% and 20% respectively from
1 April to 31 July. The 2020 management bonus scheme
was also cancelled and many of our employees also took
38
temporary salary and benefit reductions. All salaries
were reinstated as of 1 August. The Board was pleased
to be able to repay the salary and benefit reductions
taken by our employees below Board level in December
2020. This included repayment to the employees of
the Ventrolla business which had been divested in
November 2020.
Society
The Group has supported the fight against COVID-19,
with one of the UK seals plants resuming operations
early to produce Q-Lon seals for the partitions used in
emergency hospital builds around the world, including
London and Istanbul. Donations of face masks were also
made to local hospitals.
The Group initially made use of available government
employee job retention schemes in its countries of
operation to protect jobs. With the strength of recovery
since initial lockdowns were eased, no government
support was taken after 31 July and the Group was
pleased to be able to repay the funds received under
the UK government scheme of £2.3 million in December
2020. This included repaying the funds received in
respect of the Ventrolla business which had been
divested in November 2020.
Tyman plcAnnual Report and Accounts 2020 Case study
Providing business continuity to the
North American construction industry
during COVID-19
After a five-week shutdown period, production at Juarez
was quickly brought back to pre-COVID-19 levels to
meet the strong recovery in demand. Capacity was
increased by onboarding additional spring suppliers,
increasing truck movements across the border by
25%, and adding 35% additional assembly capacity.
This resulted in a 54% increase in output by the end of
August.
Our manufacturing agility, broader network capability,
scale and speed in handling the COVID-19 pandemic
enabled us to continue to serve existing customers,
gain share, and enable continuity of the North American
residential construction industry.
Our Juarez, Mexico facility produces over 50% of the
North American market requirement for block and tackle
balances. In late April 2020, the Mexican government
mandated a temporary shutdown due to COVID-19, also
affecting our competitors. Window fabricators were at
risk of having to halt production due to the significant
reduction in supply of balances. Tyman was uniquely
positioned with its scale and flexible manufacturing
footprint to ensure continuity of supply.
We responded to the shutdown swiftly by leveraging our
dedicated employees, COVID-19 safety protocols, and
industry leading manufacturing footprint to mitigate
significant disruption to the industry. Shortly after
receiving a closure notification, an orderly transfer of
inventory from Juarez to our Sioux Falls, South Dakota
facility was completed and balance production at Sioux
Falls was quickly ramped up. Capacity was increased
by 65% through overtime, optimizing product mix,
onboarding additional vendors, and using other Group
facilities for secondary operations. We worked closely
with customers to allocate supply and minimize supply
chain disruption.
39
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Operational review
Tyman North America
£m except where stated
Revenue
Adjusted operating profit
Adjusted operating profit margin
LFL revenue growth by quarter vs 2019
LFL revenue growth
2020
372.1
64.5
17.3%
2019
386.0
64.5
16.7%
Change
-4%
Flat
+60bps
LFL
-3%
+1%
Q1
+2%
Q2
-24%
Q3
+1%
Q4
+11%
Markets
The US residential market had a solid
start to the year, with growth until
late March when COVID-19 began to
impact demand. Since mid-May, the
market has rebounded strongly. Total
housing starts for the year grew 7%,
with single-family starts, to which
the division has proportionally higher
exposure, increasing 12%. This
has been driven in part by pent-up
demand and the 'urban flight' and
'nesting' trends as people seek more
space or to upgrade existing spaces
due to increased time being spent at
home. The US residential repair and
renovation market also recovered
well in the second half, driven by a
combination of increased housing
transactions and home values,
supported by low interest rates, and a
surge in DIY activity as homeowners
prioritised investment in the home.
The NAHB RMI average index for
Q4 was significantly higher at 85
(2019:54).
Commercial construction markets
have not seen the same level of
recovery, with non-residential building
starts down 24% compared to 2019.
The Canadian construction market
began the year with challenges in
western Canada due to a weaker
energy sector and concerns on
elevated house prices in Toronto
and Vancouver. Q2 was subject
to restrictions in some provinces,
resulting in a weak first half, but
once restrictions were eased, the
market recovered well, supported
by lower interest rates, government
support during the pandemic and
low inventory. Total housing starts
increased 4% in the year.
40
Business performance
and developments
The North America division had a
strong start to the year, with LFL
growth of 2% in the first quarter,
despite the carry-over effect of the
2019 customer losses associated with
the previous door seal product and
footprint-related issues. In April, there
was a marked reduction in demand
due to COVID-19 and the facilities in
Juarez, Mexico were closed for most of
May, although the business was able
to quickly adapt and move production
to other facilities. The recovery that
began in June accelerated through
the second half and momentum
continued with new business wins,
resulting in LFL revenue growth for
H2 2020 of 5% against H2 2019. This
growth was achieved despite the rapid
increase in demand putting pressure
on stock availability and service
levels throughout the whole industry.
Production levels in certain facilities
were also impacted by high-levels
of COVID-related absenteeism due
to employees self-isolating. Further,
there was difficulty in recruiting due
to tight manufacturing labour markets
throughout H2. There was overall
price deflation during the year due
to a fall in tariffs and realignment of
pricing with certain customers.
Full year LFL revenue for 2020 was
just 3% behind 2019. The slight
unfavourable impact of exchange
rates resulted in reported revenue of
£372.1 million, 4% below 2019.
The benefits generated from self-
help initiatives, lower materials costs,
as well as the swift action taken to
manage production levels and costs
in line with demand outweighed
additional costs incurred as a result
of COVID-19. LFL adjusted operating
profit increased 1% and adjusted
operating margin expanded 60bps
to 17.3%. Cost management actions
included savings in employee,
marketing, travel, and bonus
expenses. The additional costs
incurred as a result of COVID-19
included implementing COVID-secure
measures (e.g.enhanced sanitisation),
as well as the cost of temporarily
transferring production from Juarez
to other facilities to ensure continuity
of supply through the shutdown. In
line with government requirements
in Mexico, the division continued to
pay salaries for all employees during
the shutdown period. In addition,
the rapid rebound in demand in the
second half, effect of COVID-related
absenteeism, and industry-wide
shipping pressures resulted in higher
levels of overtime and freight costs.
The slight unfavourable impact of
exchange rates resulted in reported
adjusted operating profit of £64.5
million, flat against 2019.
Despite the disruption caused by
COVID-19, the results from the
activities to resolve the operational
inefficiencies at the Statesville
facility accelerated through the year.
The strengthened leadership team,
continuous improvement activities
undertaken, and improved production
scheduling methods generated
improvements in yield and quality,
in turn delivering gross margin
expansion of 110 bps with upward
trends across H2. Improvement
activities are ongoing and further
benefits will be realised in 2021.
Following the strengthening and
realignment of the sales team, the
momentum generated with new
business wins in late 2019 continued in
2020, although the pace slowed in the
second half as customers focused on
serving their own market demand. The
wins were achieved in part due to the
strength of service provided through
the crisis relative to peers. This
enabled the division to capture share,
generating net wins of c.US$4 million
annualised revenue. In addition,
capacity of urethane window seals
was expanded through incremental
Tyman plcAnnual Report and Accounts 2020 production as well as partnering with
the Tyman International division. This
capacity is being used to support
existing customers and win new
business for high-value, differentiated
applications, with incremental revenue
of US$1 million generated in 2020.
Other self-help initiatives, including
footprint realignments covering
US$20 million of revenue, were
successfully executed with minimal
customer disruption. This included
the closure of the Fremont, Nebraska
facility, through which c.US$3million
of low margin, non-fenestration
business was exited. In addition,
planned transfers of manufacturing
activities between four facilities were
accelerated due to COVID-19, as the
North American 'centres of excellence'
were further optimised. These
initiatives generated cost-savings in
2020 of c.US$4 million.
Lean excellence initiatives completed
in the year are delivering further
cost reductions. The product
rationalisation and repositioning
initiative is also progressing as
planned, with work well underway in
the sash window hardware and sliding
patio door hardware categories.
This initiative will continue in 2021,
eliminating product overlap and
thereby allowing manufacturing and
warehousing cost efficiencies, better
engineering focus on innovation,
and clearer range positioning to
our customers; combined, these
measures should continue to deliver
market share gains.
The division’s access solutions
business, Bilco, was more resilient
in the period as commercial
construction largely continued
through the COVID-19 crisis and
our success in winning long-term,
high-visibility projects insulated us
against softer overall markets. There
was some impact from destocking by
distributors as well as project delays
and cancellations, but good growth in
safety accessories and smoke vents
was achieved, resulting in LFL revenue
for the year declining just 2%.
New product development
The division continues to bring
new products to market, with
recent product launches delivering
incremental revenue ahead of
expectations. During 2020, two
commercial access products were
introduced, including an enhanced
acoustical smoke vent and a new
thermally broken smoke vent, which
provide enhanced sound insulation
and improve safety. The Quad Roller
product, which provides easy gliding
to address the trend towards larger
doors with greater expanses of glass,
was also brought to market, along
with a variety of customer-specific
product innovations. The main focus
of development activity in the year
was the pawl lock, a next generation
inverted block and tackle balance
that is expected to achieve significant
revenue over the coming years as
the intellectual property expires on
the prior generation product. The
pawl lock is designed to minimise
customer SKUs and reduce space in
the window jamb, enabling customers
to add features or remove material
and thereby cost from the window.
The division is partnering with two
industry leaders and will launch in
early 2021.
Outlook
The momentum seen at the end of
2020 is expected to continue into
Q1 2021, supported by high levels of
backlog, providing cautious optimism.
There remains uncertainty beyond
this, given the potential impact on
demand from the ongoing COVID-19
crisis and wider macroeconomic
conditions. Single-family residential
starts are projected to increase 6% in
2021, supported by the 'urban flight'
trend. The strong growth in repair
and remodelling spend is expected
to continue in early 2021, with the
growth rate tempering in the second
half of the year. The commercial
market recovery is expected to
lag behind residential, with non-
residential building starts forecast to
increase 3% in 2021. The Canadian
market is expected to be mixed, with
support from low interest rates and
higher household savings tempered
by government support measures
coming to an end.
Rising commodity costs, tight labour
markets, and continued pressures on
global shipping lead times and costs
will provide a headwind in 2021. The
division will seek to manage these
costs through pricing actions and
productivity initiatives.
The division’s main areas of focus in
2021 will continue to be strengthening
operational excellence to expand
margin, driving share gains, and
completing the next phase of the
product portfolio harmonisation and
repositioning initiative.
41
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Operational review CONTINUED
Tyman UK & Ireland
£m except where stated
Revenue
Adjusted operating profit
Adjusted operating profit margin
LFL revenue growth by quarter vs 2019
LFL revenue growth
2020
92.2
8.8
9.5%
Q1
-1%
2019
107.2
13.8
12.9%
Q2
-54%
Change
-14%
-36%
-340bps
LFL
-13%
-37%
Q3
+3%
Q4
Flat
Markets
The UK market for doors and windows started the year positively, following the decisive election result in December
2019. Over the first two months of the year, the IHS Markit/CIPS UK Construction PMI rose to 53 in February 2020
and residential property transactions were up 4%. The COVID-19 lockdown measures introduced in late March led to
the temporary closure of the majority of construction sites and prevented all but essential RMI activity. In early May,
construction activity began to resume with social-distancing measures in place and the market gathered momentum very
quickly through the second half. The PMI recovered to a level of 55 in December and the number of housing transactions
are at the highest level since 2007. This has been supported by the UK Government stamp duty holiday as well as the
additional time people are spending at home driving increased RMI activity. The recovery of the commercial market, to
which the division is less exposed, has lagged behind the residential market. Overall, COVID-19 has led to a significant
contraction in the UK and Ireland market in 2020 compared to 2019.
42
Tyman plcAnnual Report and Accounts 2020 silent, smooth operation, with only
a light touch required by the user to
open and close the window.
Outlook
Since lockdown measures were eased,
demand in the residential RMI and
new housing market has rebounded
quickly, in part due to pent-up
demand, the 'nesting' trend and UK
government measures to increase
the stamp duty threshold driving up
housing transactions. This momentum
is expected to continue through Q1,
supported by the continued high level
of housing transactions. Beyond this,
there remains significant uncertainty
over the impact of COVID-19 on
unemployment, consumer confidence
and thereby the housing market as
the stamp duty holiday and other
government support measures come
to an end.
In the commercial sector, the value
of construction project awards and
new project tender enquiries dropped
significantly during the lockdown, and
this is expected to impact activity
in 2021. However, this sector may
benefit from government stimulus
targeted at infrastructure projects.
Rising material and shipping costs
will create a headwind for 2021 and
pricing actions are being taken to
manage cost inflation. The division
is also closely monitoring port
congestion and amending order
patterns to minimise supply chain
disruption.
The division’s focus in 2021 will
continue to be driving momentum
with new product launches, optimising
the cost base through continued
integration and optimisation of the
Access 360 business and driving
online sales through its e-commerce
platform.
Business performance
and developments
The UK & Ireland division had a
strong start to the year, achieving
LFL revenue growth of 8% to the end
of February, with March also starting
strongly. This reflected increased
consumer confidence driving the
hardware business, as well as strong
project activity in the Access 360
business. From late March until early
May, all sites were temporarily closed.
Activity gradually resumed from May
as lockdown measures were eased.
Demand recovered much quicker
than anticipated through the second
half, driven by pent-up demand and
the increased RMI activity. LFL sales
in H2 2020 were 1% higher than H2
2019, despite Q4 2019 being a strong
comparator due to the buoyant market
and timing of commercial project
activity. Overall, LFL revenue for the
year was 13% lower than 2019.
Profitability was impacted by the sales
shortfall as well as additional bad
debt charges due to some customers
experiencing financial difficulty, high
freight costs due to global shipping
disruption in H2, and continued
strategic investments in smartware.
This was partially mitigated by tight
cost control measures, including
reductions in discretionary spend and
cancellation of the bonus scheme.
Hardware sales into both the OEM
and distribution channels were
strong in the first few months and
rebounded strongly once lockdown
restrictions were eased. The division
benefitted from exposure to trade
distributors who have a strong online
presence, given that lockdown has
accelerated the trend to online sales.
Manufacturing of multi-point locks
was transferred from the Far East to
the UK in the period, with inventory
benefits and cost-savings now being
realised. Further opportunities to
onshore manufacturing or assembly
of certain products are being explored
to reduce stock levels and ensure
robustness of the supply chain.
Access 360, the division’s commercial
access portfolio, achieved strong
revenue growth of 16% in the first
two months of the year, reflecting
the stronger projects pipeline
and operational execution. Since
construction activity recommenced in
early May, sales have recovered well,
although the commercial market has
lagged behind the residential market
as a result of reduced investment.
Good progress has been made in
better integrating and optimising the
Access 360 business, with work on
harmonising systems and streamlining
the footprint underway, and the
operational bottlenecks which arose
in Profab in H2 2019 largely resolved.
The business is also gaining traction
in the growing specification market,
having strengthened its engagement
with architects and specifiers through
enhancements to the website and
social media presence, and increased
online training.
The smartware offering continues
to gain momentum, with the ERA
Protect™ range being listed by a key
national distributor in Q3 2020. The
ERA website is being upgraded to
enable homeowners to easily select
an ERA accredited installer alongside
purchasing their ERA Protect™ home
security solution via the website. The
ERA Protect™ range was the first
home security portfolio to receive the
BSI IoT Kitemark. The division has
also enhanced its digital marketing
capabilities and is further developing
its digital strategy, to ensure it is well
placed to capitalise on the shift to
e-commerce.
In line with the Group’s strategy to
strengthen the base for future growth,
Ventrolla, the division’s sash window
renovation and installation business,
was divested on 5 November 2020 for
nominal consideration. This business
had been loss-making for a number
of years and was non-core to the
portfolio. Excluding Ventrolla from the
2020 results, the division would have
returned a 12.3% adjusted operating
margin.
New product development
NPD activities were impacted by
COVID-19 during the year and several
new product launches were delayed.
This includes several extensions to
the ERA Protect™ range, including the
WindowSense™ product, which will
now be launched in early 2021. This
is targeted at the OEM market as a
pre-installed product and therefore
expected to create further traction for
the rest of the integrated range, all
of which can be controlled through a
single smartphone app. Also due for
launch is the new TrueGlide custom-
engineered spiral balance for vertical
sliding sash windows, which provides
43
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Operational review CONTINUED
Tyman International
£m except where stated
Revenue
Adjusted operating profit
Adjusted operating profit margin
LFL revenue growth by quarter vs 2019
LFL revenue growth
2020
108.5
12.3
11.3%
Q1
-17%
2019
120.5
14.8
12.3%
Q2
-27%
Change
-10%
-17%
-100bps
LFL
-9%
-17%
Q3
+9%
Q4
-1%
Markets
The weakness seen in core markets in the second half of 2019 continued into early 2020, with challenging macroeconomic
conditions and core markets impacted by COVID-19 earlier than other geographies. As of early February, markets
were progressively impacted by COVID-19, with each market being affected at different times as the virus spread.
Construction activity and customer operations were suspended in most markets for varying time periods in line with the
lockdown measures imposed in each territory. The division’s three largest markets of Italy, Spain, and China were subject
to stringent lockdown measures between February and April.
Since restriction measures were eased, there has been a strong recovery in demand in core markets, supported by
consumers prioritising investment in the home and government stimulus in certain territories. The IHS Markit Eurozone
Construction PMI recovered to 46 in December from its low of 15 in April.
44
Tyman plcAnnual Report and Accounts 2020 Business performance
and developments
LFL revenue for the international
division declined 9% in 2020, with
slight foreign exchange headwinds
resulting in reported revenue
down 10%. The business had a
challenging start to the year due
to the weak market conditions
and was significantly impacted by
COVID-19. The division’s third largest
market, China, was impacted in early
February, followed by most other
core markets from mid-March. Since
lockdown measures have been eased
in each territory, momentum in sales
and order levels has built steadily. The
division’s largest market, Italy was
particularly impacted by COVID-19
and although there has been a strong
recovery through the second half,
it ended the year 20% below 2019.
Other major European markets
were similarly affected. China and
Australia, where the pandemic was
contained more quickly, achieved
growth, with government stimulus in
China driving strong project activity.
The move to a new distribution site
in China impacted timing of sales
between Q3 and Q4, with customers
bringing forward purchases into
September ahead of the planned
closure in October.
A reduction in overheads, including
savings from the reduction in
personnel costs which took effect in
the second half of 2019, combined
with additional cost management
actions taken and utilisation of
available government schemes
partially offset the impact of the sales
shortfall on adjusted operating profit.
LFL adjusted operating profit was 17%
below 2019 and adjusted operating
margin fell from 12.3% to 11.3%.
Despite some inevitable delays
caused by COVID-19, the division has
made good progress on its strategic
initiatives. Momentum continued
with the ‘all in one’ strategy, with
the launch of a new fully-integrated
SchlegelGiesse website that brings
together all of the division’s brands
and products and supports driving
further penetration of the portfolio
including showcasing new products.
During the lockdown period, webinars
and virtual innovation workshops
were delivered to distributors
and window makers to maintain
relationships and further progress the
channel expansion strategic initiative.
This enabled strong partnership
activity with System Houses, with
many agreements reached to develop
systems based on the innovative ‘Pull
and Slide’ system.
this in 2021. The division continues to
invest in developing and expanding its
range of innovative products as a key
driver of future growth.
Outlook
The recovery seen through the
second half is expected to continue
at least through the first quarter of
2021, driven by continued high levels
of building and remodelling activity
in core markets as well as market
share gain initiatives. There remains
uncertainty beyond the first quarter
due to the ongoing macroeconomic
impact of COVID-19 as government
support measures come to an end
and the risk of further lockdown
restrictions in various territories.
The main priorities of the
International division in 2021 are to
drive share gains in core markets
through new product launches and
continued channel expansion; and
to deliver further self-help initiatives
to create a stronger foundation for
growth.
Self-help initiatives were completed
as planned. The restructuring
programme to streamline operations
in Australia, China, Singapore and
New Zealand has been fully executed
with no customer disruption.
Manufacturing ceased and the
business transitioned to a distribution
model in both Australia and China,
and direct sales operations in
Singapore and New Zealand were
exited. These restructuring activities
have resulted in a reduced fixed
cost-base, the avoidance of significant
future capital expenditure and will
allow management bandwidth across
the region to be better focused.
The integration of Reguitti, which
was acquired in August 2018, has
progressed, albeit at a slower rate
than planned due to lockdown
measures. Reguitti’s performance was
particularly impacted by COVID-19
due to its location in Northern Italy.
The full functioning integration has
been completed, and cross-selling
activities have gained traction
following integration of the sales
force. A new mid-price point brand
for the German market has been
launched, to better align the product
offer with current market trends.
New product development
The division continues to focus on
innovation, although there have
been delays to the launch of certain
products due to COVID-19. New
products launched in the year included
the CHIC concealed door hinge range,
which completes the minimal frame
profile range for aluminium doors and
windows, providing a co-ordinated
modern aesthetic, and brighter
interiors, as a result of the higher
glass to frame ratio. The hinge also
allows easy installation, has a high
load capacity and is reversible for left
or right opening. The value-engineered
range of bespoke products for the
Chinese RMI market is also due for
launch in early 2021, which supports
the division’s focus on this growing
channel and will ensure it is well-
placed to capture share as this market
recovers. In addition, the Schlegel
seal range achieved sustainability
accreditation via the Cradle to Cradle™
certification in H2 2020, with other
product lines expected to achieve
45
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Financial review
Income statement
Revenue and profit
Reported revenue for the year
decreased by 6.7% to £572.8 million
(2019: £613.7 million), primarily
reflecting a volume reduction due
to the impact of COVID-19, the drag
through effect of the 2019 North
America footprint consolidation
related customer losses of c.£8.0
million, a reduction in US tariffs
of £2.9 million, adverse foreign
exchange movements of £3.4 million,
and the disposal of Ventrolla of £0.9
million, offset by an encouraging level
of customer wins. On a LFL basis,
revenue declined 6.0% compared to
the prior year.
Adjusted administrative expenses
decreased to £111.8 million (2019:
£120.2 million), largely due to
the benefit of cost-management
initiatives taken to mitigate the
impact of COVID-19, which included
the curtailment of discretionary
expenditure and cancellation of the
senior management bonus scheme,
and the receipt of government
support from various territories
outside the UK of £1.7 million. The
unfavourable impact of foreign
exchange was £1.3 million.
Adjusted operating profit decreased
by 6.0% to £80.3 million (2019:
£85.4 million). This was negatively
impacted by the reduction in volume
driven by COVID-19 and by c.£3.0
million from the drag through effect
of the 2019 North America footprint
consolidation customer losses, and
adverse foreign exchange movements
of £0.7 million. This was offset by a
reduction in input costs of £2.3 million
due to moderation of materials prices,
net cost savings of c.£5.0 million,
and productivity improvements
of c.£6.0 million. On a LFL basis,
adjusted operating profit declined
5.5%. The Group’s adjusted operating
margin increased by 10bps to 14.0%
(2019: 13.9%).
Adjusted profit before taxation
decreased by 3.7% to £68.4 million
(2019: £71.0 million) and declined
3.4% on a LFL basis, benefiting
from lower finance costs due to the
reduction in net debt and the interest
rate. Reported profit before taxation
increased by 91.9% to £47.6 million
(2019: £24.8 million), largely as a
result of a decrease in exceptional
items from £18.9 million to £1.8
million.
Materials and input
costs
The price of key raw materials
and input costs are tracked
closely by the Group to ensure
the divisions are procuring
product at the optimal price for
the quantities consumed and
are in a position to secure price
increases from customers where
required.
Four principal categories of raw
material are monitored at Group
level by reference to the division
with the highest usage: steel, oil
derivatives, zinc and aluminium.
Tyman’s largest raw material
and component purchase is steel
across many different types and
grades. Within this, stainless
steel is the Group’s largest steel
purchase so the pricing of US
stainless steel is monitored as
a proxy for the steel category.
Oil derivatives are used in
the manufacture of seal,
extrusion and injection-moulded
products. Zinc, aluminium and
associated alloys are used in
the manufacture of a number of
hardware products.
In addition, the Group monitors
the cost of a representative
basket of those products
sourced from the Far East by
Tyman Sourcing Asia into the
UK which is influenced by local
labour and overhead rates, raw
material price variations and
exchange rates.
Jason Ashton
Chief Financial Officer
Robust balance
sheet with
leverage
of 1.1x
46
Tyman plcAnnual Report and Accounts 2020 £m except where stated
Aluminium (Euro)
Polypropylene (Euro)
Stainless steel (US)
Zinc (US)
Far East components (UK)4
FY 2020
Materials (1) Average(2)
-6%
-21%
+1%
-11%
-4%
14.8
30.9
54.8
27.5
37.4
Spot(3)
+1%
-16%
-20%
+6%
+8%
(1) FY 2020 materials cost of sales for raw materials, components and hardware for overall category
(2) Average 2020 tracker price compared with average 2019 tracker price
(3) Spot tracker price as at 31 December 2020 compared with spot tracker price at 31 December 2019
(4) Pricing on a representative basket of components sourced from the Far East by Tyman UK & Ireland
Raw material costs moderated in 2020, with average prices across all commodity categories excluding stainless steel
lower than 2019. Costs across most categories began to rise towards the end of the year, with the spot prices for all
categories except polypropylene and stainless steel being higher than December 2019. Steel purchases in North America
continue to be impacted by the direct and indirect effect of US tariffs. Surcharges are in place to recover these costs.
Exceptional items
Certain items that are material and non-trading in nature have been drawn out as exceptional such that the effect of
these items on the Group’s results can be better understood and to enable a clearer analysis of trends in the Group’s
underlying performance.
£m
Footprint restructuring – costs
Footprint restructuring – credits
Footprint restructuring – net
M&A and integration - costs
M&A and integration - credits
M&A and integration - net
Loss on disposal of business
Impairment charges
Footprint restructuring
The footprint restructuring costs
in prior periods related to directly
attributable costs incurred in the
multi-year North American footprint
consolidation project, as well as
provisions for costs associated
with the closure of the Fremont,
Nebraska facility and streamlining the
international satellite operations which
commenced in 2019. These projects
were completed in 2020, with the small
credit arising due to the actual costs
being slightly less than estimated.
M&A and integration
M&A and integration costs of £0.8
million relate to costs associated with
the integration of businesses acquired
in 2018, predominantly Ashland.
M&A and integration credits of £0.6
million relate to the release of an
excess warranty provision made on a
previous acquisition.
Loss on disposal of business
This charge relates to a loss on the
disposal of the loss-making Ventrolla
business, which was divested on
5 November 2020 for nominal
consideration.
2020
-
0.2
0.2
(0.8)
0.6
(0.2)
(1.8)
-
(1.8)
2019
(7.1)
0.6
(6.5)
(5.3)
-
(5.3)
(1.7)
(5.4)
(18.9)
Impairment charges
Impairment charges in 2019 relate
to the write down of assets and
inventory associated with the slower
than expected uptake of the door seal
product in North America.
Non-cash movements charged to net
finance costs in the period include
amortisation of capitalised borrowing
costs of £0.5 million (2019: £0.5
million) and pension interest costs of
£0.2 million (2019: £0.3 million).
Interest rate swap contracts
Until June 2020, the Group fixed a
portion of floating rate borrowings
under the RCF agreement via interest
rate swap contracts. Due to the
current low prevailing interest rates,
these swaps were not replaced on
expiry.
The Group has issued US$100 million
in aggregate under its US Private
Placement programme, all of which
is held at fixed rates. In total, 43%
(2019: 46%) of the Group’s adjusted
debt excluding lease liabilities is held
at fixed rates of interest.
Finance costs
Net finance costs decreased to £12.1
million (2019: £15.7 million).
Interest payable on bank loans,
private placement notes and
overdrafts decreased to £8.9 million
(2019: £11.1 million), predominantly
reflecting the reduction in borrowings,
as well as lower interest rates
following reductions in the US federal
interest rate and UK official bank rate.
Interest on lease liabilities of £2.8
million reduced slightly, reflecting the
reduction in lease liabilities (2019:
£3.0 million).
The Group’s average cost of funds
and margin payable over the year
decreased by 50 bps to 3.4% (2019:
3.9%) reflecting lower interest rates
and a reduction in the US dollar
denominated borrowings which carry
a higher rate of interest.
47
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Financial review CONTINUED
Forward exchange contracts
At 31 December 2020, the Group’s
portfolio of forward exchange
contracts at fair value amounted to a
net liability of £0.2 million (2019: net
liability of £0.5 million). The notional
value of the portfolio amounted to
£23.7 million (2019: £34.1 million),
comprising US dollar and Chinese
renminbi forward exchange contracts
with notional values of US$23 million
and RMB60 million respectively (2019:
US$39 million and RMB45 million).
These contracts have a range of
maturities up to 19 March 2021.
During the year, a fair value gain of
£0.3 million (2019: fair value loss of
£0.8 million) was recognised directly
in the income statement.
Taxation
The Group reported an income
tax charge of £10.4 million (2019:
£7.1 million), comprising a current
tax charge of £14.1 million (2019:
£13.4 million) and a deferred tax
credit of £3.7 million (2019: £6.3
million). The increase in the income
tax charge reflects the increase in
profit before tax.
The adjusted tax charge was
£15.3 million (2019: £17.5 million)
representing an effective adjusted
tax rate of 22.4% (2019: 24.6%).
The reduction in the adjusted
effective tax rate of 230bps reflects
the release of an excess provision
and utilisation of available tax credits.
During the period, the Group paid
corporation tax of £13.8 million (2019:
£14.2 million). This reflects a cash tax
rate on adjusted profit before tax of
20.2% (2019: 20.0%).
Earnings per share
Basic earnings per share increased
by 109.9% to 19.1 pence (2019:
9.1 pence). Adjusted earnings per
share decreased slightly to 27.2
pence (2019: 27.5 pence) as a result
of the slight reduction in adjusted
profit after tax. There is no material
difference between these calculations
and the fully diluted earnings per
share calculations.
Taxation policy
The Group’s tax affairs are managed in accordance with relevant laws and
regulations in each jurisdiction in which the Group operates. The policy
ensures that the approach to taxation is aligned with Tyman’s commercial
activities worldwide.
Tyman follows the terms of double taxation treaties and relevant OECD
guidelines in dealing with issues such as transfer pricing, repatriation of
profits and the establishment of a taxable presence in countries where it
trades. The Group seeks to engage proactively with tax authorities in each
of its key jurisdictions to ensure that the Group’s tax affairs are clearly
communicated.
Tyman aims to maintain straightforward legal and commercial structures
to reduce risk and minimise compliance costs. Investments made in tax
reporting systems and personnel across the Group have ensured tax
reporting, compliance and disclosure that is more accurate and reliable.
The Group’s key transfer pricing arrangements comprise commercial
agreements relating to trade between Group entities, intragroup financing
and the recharging of shared-service administrative costs.
Several factors impact the Group’s taxation charge or credit in the income
statement, including:
• The international nature of the Group’s operations. In 2020, 74% of
Tyman’s adjusted operating profit before central cost allocations was
generated in North America, 11% in the UK, and 15% in the rest of
the world. The Group’s effective tax rate is therefore a function of the
interaction of currency movements with different country, state and
local taxation rates and allowances.
• The proactive capital investment programme in each of the Group’s
divisions. These investments are amortised for tax purposes in
accordance with the laws relating to capital allowances in each country,
which may not match the Group’s depreciation policy.
• Taxable losses generated by Group companies. Where these losses
can be relieved or carried forward to be relieved in future periods,
Tyman does so in accordance with the relevant laws. This treatment is,
however, broadly dependent on sufficient eligible taxable profits being
generated in the relevant jurisdiction.
• Certain expenses which cannot be relieved against taxable profits.
Such expenses most notably relate to the amortisation and impairment
of intangible assets and the write-off of goodwill arising on acquisition.
As the Group has developed through acquisition, these charges have a
material impact on the Group’s statutory tax charge as a proportion of
pre-tax profits.
• The changing attitude of tax authorities under the OECD BEPS
Project. Under Action 2 of the OECD BEPS Project the UK government
introduced new rules, the consequence of which is that more financing
income is brought into the Group’s UK taxable income.
• Ongoing developments in the international tax environment and global
tax audit activity gives rise to tax uncertainties for the Group.
• Local tax incentives such as research and development tax credits and
patent box regimes.
• Group share options and LTIPs will generate varying levels of tax relief
to the Group dependent on the vesting outcomes of awards and the
share price as at the date of vesting.
48
Tyman plcAnnual Report and Accounts 2020 Cash generation,
funding and liquidity
Cash and cash conversion
£m
Net cash generated from operations
Add: Pension contributions
Add: Income tax paid
Less: Purchases of property, plant and equipment
Less: Purchases of intangible assets
Add: Proceeds on disposal of PPE
Operational cash flow after exceptional cash costs
Exceptional cash costs
Operational cash flow
Less: Pension contributions
Less: Income tax paid
Less: Net interest paid
Less: Exceptional cash costs
Free cash flow
2020
95.9
1.7
13.8
(9.9)
(0.6)
-
100.9
4.2
105.1
(1.7)
(13.8)
(12.5)
(4.2)
72.9
2019
97.1
1.0
14.2
(10.7)
(0.8)
0.8
101.6
11.3
112.9
(1.0)
(14.2)
(15.0)
(11.3)
71.4
Operational cash flow in the period decreased by 6.9% to £105.1 million, predominantly due to a lower working
capital inflow following the focus on optimisation in 2019. This is after adding back £4.2 million (2019: £11.3 million) of
exceptional costs cash settled in the period, which primarily related to costs associated with the footprint realignments
provided for in 2019 and costs associated with the integration of Ashland. Operating cash conversion in 2020 continued to
be very strong at 130.9% (2019: 132.2%).
Free cash flow in the period was slightly higher than 2019 at £72.9 million (2019: £71.4 million), with the lower
operational cash flow being offset by the significant reduction in exceptional cash flows and reduction in interest
payments due to lower net debt.
Debt facilities
Bank and US private placement facilities available to the Group, as at 31 December 2020, were as follows:
Facility
2018 Facility
4.97 % USPP
5.37 % USPP
Other facilities
Currency Committed Uncommitted
£70.0m
–
–
–
Multicurrency
US$
US$
€
Maturity
Feb 2024
Nov 2021
Nov 2024
Various
£240.0m
US$55.0m
US$45.0m
€0.3m
The Group received eligibility in June 2020 to draw up to £100 million through the Bank of England CCFF, albeit the Group has
not made use of this and the Bank of England has announced this facility will be closed after 22 March 2021 and therefore this is
no longer available for use.
Liquidity
At 31 December 2020 the Group had gross outstanding borrowings of £224.1 million (2019: £273.5 million), cash balances
of £69.7 million (2019: £49.0 million) and committed but undrawn facilities of £143.1 million (2019: £102.8 million) as
well as potential access to the uncommitted £70.0 million accordion facility. US$55.0 million of the USPP debt is due for
repayment in November 2021 and is therefore classified as current. There is sufficient cash and committed but undrawn
amounts under the 2018 revolving credit facility to repay this.
Net debt at 31 December 2020 was £154.5 million (2019: £224.5 million). Adjusted net debt, which excludes lease
liabilities and unamortised finance arrangement fees was £100.6 million (2019: £164.5 million), with the reduction
reflecting the strong operational cash generation and that dividends were not paid during the year.
Covenant performance
At 31 December 2020
Leverage
Interest Cover
Test
< 3.5×
> 4.0×
Performance(1)
1.1x
10.5x
Headroom(1)
60.1m
57.9m
Headroom(2)
63.1%
62.1%
(1) Calculated covenant performance consistent with the Group’s banking covenant test (banking covenants set on a frozen GAAP basis and not
impacted by IFRS 16)
(2) The approximate amount by which adjusted EBITDA would need to decline before the relevant covenant is breached
At 31 December 2020, the Group retained significant headroom on its banking covenants. Leverage at the year end
improved significantly to 1.1x (2019: 1.7x), reflecting the lower level of net debt. Interest cover increased to 10.5x (2019:
9.0x), largely reflecting the lower interest expense.
In July 2020, in order to provide additional headroom during the period of uncertainty, the Group agreed a temporary
relaxation of the leverage covenant with its lenders from 3.0x adjusted EBITDA to 3.5x at December 2020 and 4.0x at
30 June 2021.
49
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Financial review CONTINUED
Balance sheet –
assets and liabilities
Working capital
£m
Inventories
Trade receivables
Trade payables
Trade working capital
FY 2019
88.6
60.5
(46.6)
102.5
Mvt
(3.3)
3.0
(8.8)
(9.1)
FX
(1.3)
(0.4)
0.3
(1.4)
2020
84.0
63.1
(55.1)
92.0
Trade working capital at the year end, net of provisions, was £92.0 million (2019: £102.5 million).
Inventories decreased by £4.6 million to £84.0 million (2019: £88.6 million), driven by the significant increase in demand
in the second half of 2020 following a period of reduced production due to COVID-19. The provision for slow moving and
obsolete inventory is slightly lower at £18.9 million (2019: £19.9 million).
Trade receivables increased by £2.6 million to £63.1 million (2019: £60.5 million) due to higher sales towards the end
of 2020 compared to the end of 2019. Trade payables increased by £8.5 million to £55.1 million (2019: £46.6 million)
reflecting higher purchases towards the end of the year in line with increased activity levels.
Of the decrease in trade working capital, £1.4 million related to exchange.
Capital expenditure
Gross capital expenditure decreased to £10.5 million (2019: £11.5 million) or 0.74x depreciation (excluding RoU asset
depreciation) (2019: 0.79x), as a result of tight management of capital expenditure early in the year due to COVID-19.
Net capital expenditure was £10.5 million (2019: £10.7 million). Included within 2019 net capital expenditure was £0.8
million of proceeds from disposal of property, plant and equipment.
Goodwill and intangible assets
At 31 December 2020, the carrying value of goodwill and intangible assets was £446.0 million (2019: £475.3 million). The
reduction in goodwill and intangible assets reflects amortisation of intangible assets through the income statement of
£20.3 million (2019: £25.0 million), offset by exchange movements of £6.0 million due to the impact of the strengthening
of sterling on the translation of the underlying US dollar denominated carrying values into the Group’s functional currency
at the year end.
Provisions
Provisions at 31 December 2020 reduced to £8.9 million (2019: £9.6 million), primarily reflecting settlement of provisions
related to the footprint realignments and the release of an excess warranty provision made on a previous acquisition,
which is no longer needed.
50
Tyman plcAnnual Report and Accounts 2020 Balance sheet –
equity
Shares in issue
At 31 December 2020, the total number of shares in issue
was 196.8 million (2019: 196.8 million) of which 0.5 million
shares were held in treasury (2019: 0.5 million).
Employee Benefit Trust purchases
At 31 December 2020, the EBT held 1.1 million shares
(2019: 1.4 million). During the period, the EBT purchased
0.1 million shares in Tyman plc at a total cost of £0.3
million.
Dividends
As a result of uncertainty surrounding the COVID-19
pandemic, the Board took the decision to cancel the 2019
final dividend of 8.35 pence per ordinary share that was
proposed with the 2019 results announcement on 5 March
2020. Furthermore, no interim dividend was declared in
2020.
As a result of the strong performance in the second half
of 2020 and the robust balance sheet position, the Board
considers it appropriate to declare a modest final dividend
for 2020. A final dividend of 4.0 pence per share (2019:
nil pence), equivalent to £7.8 million based on the shares
in issue as at 31 December 2020, will be proposed at the
Annual General Meeting (2019: £nil). The total dividend
declared for the 2020 financial year is therefore 4.0 pence
per share (2019: 3.9 pence), an increase of 2.6%. This
equates to a Dividend Cover of 6.8x. The Board intends
to return to a progressive dividend policy when conditions
allow.
The ex-dividend date will be 22 April 2021 and the final
dividend will be paid on 28 May 2021 to shareholders on
the register at 23 April 2021.
Only dividends paid in the year have been charged against
equity in the 2020 financial statements. No dividend
payments were made to shareholders during 2020 (2019:
£23.6 million).
Dividend policy
Tyman plc, the Parent Company of the Group, is a
non-trading investment holding company that derives
its distributable reserves principally from dividends
received from subsidiary companies.
The Group’s dividend policy targets a dividend cover
of 2.00× to 2.50× adjusted earnings per share
while being mindful of the Group’s near term capital
requirements.
The objective of this policy is to:
• align shareholder returns with growth in the
Group’s profitability;
• reinforce capital discipline; and
• help ensure that the Group’s shares appeal to a
wide range of investors.
While the Board’s aim is to deliver progressive
growth in dividends year-on-year, application of the
Group dividend policy may lead to dividends paid
to shareholders reducing in years where business
performance has been weaker than expected
or where other near term capital priorities are
considered to be of greater importance.
The Board considers a number of factors that
influence the level of dividend in any given year.
These include:
• the cyclical nature of the industry in which the
Group operates;
• the near-term capital requirements of the
business;
• the level of distributable reserves in the Parent
Company; and
• the availability of liquid cash resources across the
Group.
In 2020, the impact of COVID-19 on the performance
of the Group has influenced how the dividend policy
has been implemented.
Dividends are typically paid bi-annually. The interim
dividend, which is usually set at around one-third
of that year’s total dividend, is normally paid to
shareholders in September. The final dividend is
normally paid to shareholders in May following the
conclusion of the Annual General Meeting.
51
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Financial review CONTINUED
Other financial
matters
Return on capital employed
ROCE increased by 30 bps to 12.3% (2019: 12.0%) due to a significant reduction in average working capital resulting
from the lack of seasonal build due to COVID-19, lower capital expenditure, as well as a lower carrying value of intangible
assets through amortisation.
Returns on Acquisition Investment
£m
Ashland
Zoo Hardware
Profab
Reguitti
Acquisition
Date
March 2018
May 2018
July 2018
August 2018
Original
Acquisition
Investment
US$102.4m
£18.7m
£4.1m
€16.2m
ROAI
2020(1)
17.9%
18.6%
8.8%
5.2%
(1) See alternative performance measures on pages 183 to 188.
Ashland and Zoo Hardware have continued to perform well, with both exceeding the 14% minimum target return
threshold after two years of ownership, in March 2020 and May 2020 respectively. Ashland achieved the planned £5.0
million of annualised synergy benefits in 2020.
Profab reached two years of ownership in August 2020, achieving an LTM run rate ROAI of 9%, which is significantly below
the target threshold. The business suffered from operational bottlenecks in the second half of 2019, impacting productivity
and was significantly impacted in H1 2020 by COVID-19 lockdown measures. Productivity has improved markedly, and sales
rebounded well in the second half.
Reguitti reached two years of ownership in August 2020, achieving an LTM run rate ROAI of 5%, which is below the target
threshold. Performance was significantly impacted by COVID-19, given its location in Northern Italy. The full functional
integraion has been completed and cross-selling activities have gained traction following the integration of the sales force.
Currency
Currency in the consolidated income statement
The principal foreign currencies that impact the Group’s results are the US dollar, the euro, the Australian dollar and the
Canadian dollar. In 2020, sterling was stronger against the US dollar, Australian dollar and Canadian dollar, and weaker
against the euro when compared with the average exchange rates in 2019.
Translational exposure
Currency
% mvt in average rate
£m Revenue impact
£m Profit impact (1)
1c decrease impact (2)
(1) Adjusted operating profit impact
US$
0.5%
(1.9)
(0.4)
467k
Euro
(1.4%)
0.9
0.1
68k
AUS$
1.4%
(0.1)
-
6k
CA$
1.5%
(0.1)
-
5k
Other
Total
(3.0)
(0.5)
(4.2)
(0.9)
(2) Defined as the approximate favourable translation impact of a 1c decrease in the sterling exchange rate of the respective currency on
the Group’s adjusted operating profit
The net effect of currency translation caused revenue and adjusted operating profit from ongoing operations to decrease
by £4.2 million and £0.9 million respectively compared with 2019.
52
Tyman plcAnnual Report and Accounts 2020 Transactional exposure
Divisions that purchase or sell products in currencies other than their functional currency will potentially incur
transactional exposures. For purchases by the UK & Ireland division from the Far East, these exposures are
principally sterling/US dollar or Chinese renminbi. For purchases by the International division’s Australian business
from the US and the Far East, these exposures are principally Australian dollar/US dollar or Chinese renminbi.
The Group’s policy is to recover adverse transactional currency movements through price increases or surcharges.
Divisions typically buy currency forward to cover expected future purchases for up to around six months. The
objective is to achieve an element of certainty in the cost of landed goods and to allow sufficient time for any
necessary price changes to be implemented.
Foreign exchange hedges against the US dollar and renminbi held by the UK & Ireland division resulted in a gain of
£0.3 million in 2020 compared to a loss of £0.8 million in 2019. The Group’s other transactional exposures generally
benefit from the existence of natural hedges and are immaterial.
Currency in the consolidated balance sheet
The Group aims to mitigate the translational impact of exchange rate movements by denominating a proportion of total
borrowings in those currencies where there is a material contribution to adjusted operating profit. Tyman’s banking
facility allows for funds to be drawn in those currencies.
The Group’s gross borrowings (excluding leases) are denominated in the following currencies:
£m
US dollars
Euros
Gross borrowings
2020
2019
Gross
(108.2)
(62.1)
(170.3)
%
63.5
36.5
Gross
(146.7)
(66.8)
(213.5)
%
68.7
31.3
2021 summary guidance
The market outlook is cautiously optimistic, with momentum seen at the end of 2020 expected to continue into the first
half of 2021. There is however uncertainty beyond this as the full macroeconomic effect of COVID-19 is being masked
to an extent by government stimulus. There may also be ongoing disruption due to further lockdowns or COVID-19
outbreaks as the vaccine roll-outs progress across territories.
Reported revenue and operating profit will be negatively impacted by a weakening US dollar due to the translation effect
on the results of the US business.
The Group expects operating margin expansion due to increased volumes and the benefits of self-help activities, although
headwinds are expected due to rising raw material and freight costs. The Group will continue to take pricing actions as
necessary to recover input cost inflation.
Total working capital trough to peak for the year is expected to be c. £25–£30 million with the working capital peak
occurring around the half year, due to the need to rebuild depleted inventory levels ahead of the peak selling period. The
majority of this will unwind in the second half, with a moderate outflow across the full year.
Capital expenditure for the 2021 financial year is expected to be £22–£27 million, reflecting catch up of expenditure
deferred from 2020 and investment in new product development, operational excellence, and systems upgrades.
Operating cash conversion is expected to be c.75% - 85%, reflecting the investment in working capital, capital
expenditure and reinstatement of discretionary expenditure necessary. This follows two years of well above average
operating cash conversion. The Group’s long-term target remains at 90% per annum.
Leverage is expected to remain within the target range of 1.0× to 1.5× adjusted EBITDA.
The adjusted effective tax rate is expected to be c.23% - 25%.
Jason Ashton
Chief Financial Officer
4 March 2021
53
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Principal risks and uncertainties
Managing Risk
Effective risk management is
integral to how we manage
the Group and supports the
realisation of our strategic
objectives.
Risk management process
The Board is committed to protecting
and enhancing the Group’s reputation
and the interests of shareholders
and our wider group of stakeholders.
In doing so, the Board promotes a
strong ethical, risk aware culture
within the business which emphasises
the importance of effective risk
management and risk reporting
throughout the year and forms a key
element of our internal governance
and performance review processes.
Our risk management process,
based on the Four Lines of Defence
model, provides clarity on roles and
responsibilities for managing risk.
The Board has ultimate responsibility
for the Group’s system of risk
management and internal control with
responsibility for oversight delegated
to the Audit and Risk Committee
which is responsible for maintaining
and reviewing the effectiveness of
our risk management processes from
strategic, financial, operational and
regulatory/compliance perspectives.
The Audit Committee has been
renamed the Audit and Risk
Committee during the year to reflect
the widened remit of the Committee
for risk and assurance matters, both
financial and non-financial.
Group risk appetite
The Board also ensures that the
Group’s risk exposure remains
appropriate and links directly to the
effective delivery of our strategic
objectives. During the year we have
undertaken initial work to further
develop the Group’s risk appetite
methodology and this will continue
in 2021.
As an international Group, the business
faces a range of risks and uncertainties
where internal and external factors
influence the Group’s risk response
to managing these risks. The Group’s
key principal risks are those risks
that are considered material and
could have a significant impact of
the Group’s business activities and
operations. The Group considers
emerging risks regularly throughout
the year, both through the risk
management process and in ongoing
54
and established meetings embedded
in our performance management
system. We consider emerging risks as
those that may materialise or have an
impact on a longer timeframe of three
years or more. As we evolve our risk
management process in 2021, we will
continue to enhance our approach to
emerging risks.
The Group’s risks and uncertainties
have been considered in the
context of the broader geo-political
environment, including the COVID-19
pandemic and the dynamic nature of
the changing trading relationships
between the US and China and the
UK and the European Union (EU) that
took effect from 1st January 2021.
These have all remained prominent
themes of risk throughout the year
and we have focused on ensuring the
Group is mitigating these risks to the
extent possible.
The Directors confirm they have
carried out a robust assessment
of the principal risks facing the
Company, including those that would
threaten its business model, future
performance, solvency or liquidity.
The table on pages 57 to 60 sets out
the principal risks and uncertainties
facing the Group at the date of
this report and how they are being
managed or mitigated. The principal
risks do not comprise all the risks that
the Group may face.
In accordance with the provisions of
the Code, the Board has taken into
consideration the principal risks in
the context of determining whether
to adopt the going concern basis of
accounting and when assessing the
prospects of the Company for the
purpose of preparing the viability
statement. The going concern and
viability statement can be found on
pages 61 to 62.
Read more about the impact of
COVID-19 in the Chief Executive
Officer’s review on page 38.
Responsibilities for
and structure of risk
management
The Group’s risk framework defines
clear roles, responsibilities and
accountabilities for risk management
across the Group and continues to
develop in line with our strategy.
Building on the progress since
2019 in safety excellence with the
appointment of the Director of Health,
Safety and Sustainability, in 2020 the
Group has added specialist resources
into the Group that strengthen our
risk and assurance capabilities. These
include a Group Head of IT, a Group
Head of Internal Audit and Risk
Management and a General Counsel.
These key appointments will allow the
Group to continue the evolution of
our approach to managing cyber and
information security risks, evolving
our risk management and assurance
processes, and strengthening our
business ethics and compliance
culture in 2021.
The Group manages risk by operating
the Four Lines of Defence model.
Tyman plcAnnual Report and Accounts 2020 The Board
Formulates the Group’s strategy and has overall responsibility for risk management including definition of the Group’s risk
appetite and culture. The Board delegates oversight of risk management to the Audit and Risk Committee.
Audit and Risk Committee
Regularly monitors the nature, extent and management
of the Group’s principal and emerging risks.
Monitors and reviews the effectiveness of the Group’s
systems of risk management and internal control.
g
n
i
t
r
o
p
e
r
k
s
i
R
Executive Committee (2nd Line of Defence)
Comprises Executive Directors and Divisional Presidents overseeing
management of group-wide risks
Divisional Management
(1st Line of Defence)
Implementation of the
necessary systems of risk
assessment and internal control.
Regular review of risk registers
and implementation of
mitigation plans. Day-to-day
operational management of risk.
Corporate Functions
(2nd Line of Defence)
Corporate functions include:
Group Finance, Tax, Legal and
Secretariat, IT and Health,
Safety and Sustainability.
Responsible for Group level
design and maintenance of the
risk framework and internal
controls and providing specialist
support across the Group.
The first line of defence consists
of operational management
implementing and maintaining
effective risk identification, risk
mitigation, reporting and the
development and maintenance of
internal control systems. This ensures
that risk management and internal
control remain an integral part of day-
to-day operations yet facilitates the
escalation of significant risks as and
when they should arise. Each division
has an established organisational
structure, senior management team
and policies and procedures at a
divisional and location level, including
those risks relating to compliance
with laws and regulations in the
geographies in which they operate.
The second line of defence consists
of the corporate functions who
support operational management and
who are responsible for establishing
Group level policies and procedures
including the Delegation of Authority,
Code of Business Ethics, Accounting
policies. Corporate functions include
Group Finance, Tax, IT, Legal and
Secretariat, Health, Safety and
Sustainability and Risk Management.
Risk management is embedded in
many aspects of the Group’s leadership
and performance model where key
areas of risk are inherently considered.
Key governance mechanisms for
Lines of Defence
the management of risk include the
Executive Committee, the Finance
Leadership Team, the strategic planning
process, budgeting and forecasting
and the Business Performance Review
(BPR) process undertaken every month
for each division.
The BPR process covers key
aspects of our strategic, financial,
operational and compliance risks
including proactive monitoring of
key actions from month to month,
safety performance, business ethics,
legal matters, financial performance
(including budget and forecasts),
progress on strategic priorities,
organisational developments and risk
watchlist items. In addition, the BPR
meeting process is supplemented
by deep dive reviews from time to
time throughout the year including
divisional risk management reviews.
In addition, this line of assurance also
covers the operation of the Group’s
ethics ‘SpeakUp’ reporting system
which enables employees to raise
concerns over ethics and compliance
matters. All ‘SpeakUp’ reports
are investigated independently by
the General Counsel & Company
Secretary, or his nominated
investigator, who tracks the actions
and reports their outcome to the
Board as necessary.
Group
Internal
Audit
(3rd Line of
Defence)
External
Audit
(4th Line of
Defence)
The third line of defence is Group
Internal Audit providing independent
and objective assurance.
In 2020, the Board made the decision
to appoint a Group Head of Internal
Audit and Risk Management to
further evolve the Internal Audit
function bringing leadership of
this important function ‘in-house’
whilst utilising resources from a
professional services firm to support
the Internal Audit process. This will
allow the Group to facilitate the
ongoing development of the Group’s
risk management processes. The
Group Head of Internal Audit reports
directly to the Chair of the Audit
and Risk Committee, reinforcing
the importance of this function
maintaining its independence and
objectivity.
The fourth line of defence is the
Group’s external auditor, PwC.
Through the work of the Group Internal
Audit function and external auditors
and the reports to the Audit and Risk
Committee, the Committee is satisfied
that any audit issues raised by either of
the auditors are managed and resolved
effectively by management.
We will continue to evolve and develop
our Risk Framework as appropriate
throughout 2021 recognising the
dynamic nature of risk management.
55
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Principal risks and uncertainties CONTINUED
Our risk management process
The Group has policies and procedures in place to ensure that risks are properly identified, evaluated and managed at
the appropriate level within the business. The identification of risks and opportunities, the development of action plans
to manage the risks and maximise the opportunities, and the continual monitoring of progress against agreed plans are
integral parts of the core activities and performance review processes throughout the Group.
The Tyman Risk Management Process
1.
Risk
identification
Top down and
bottom up
identification
of the Group’s
risks ensuring
emerging and
arising risks
are assessed
2.
Evaluate
inherent
risks
Considers
the gross
level of risk
to the Group
in impact and
likelihood
terms
3.
Review
existing
controls
Identification
and assessment
of existing
controls to
manage the risk
4.
Risk
response
Further
mitigation is
considered in
line with the
Group’s risk
appetite
5.
Monitor
and review
actions
Regular review
and monitoring
of risks at a
Group and
divisional level
6.
Risk
Reporting
and oversight
Regular
reporting of
risk related
matters in core
governance and
performance
processes and
reporting to the
Audit and Risk
Committee
Each division maintains a
comprehensive risk register which
assesses all pertinent risks relevant
to that division, including strategic,
financial, operational, and compliance
risks. The risk assessment process is
dynamic and includes emerging and
retiring risks as each division’s risk
landscape shifts.
These risk registers are reviewed
on a regular basis by the senior
leadership team of each division.
Each risk is monitored in line with
the process above to assess the
likelihood and impact of the relevant
risks crystallising. Against this an
assessment is made of existing
controls that are in place to mitigate
the relevant risk and identifies further
actions to further manage each risk
to an acceptable level. Each division’s
risk register is formally reviewed four
times a year within the division, the
conclusions of which are discussed
at the Executive Committee and
submitted to the Audit and Risk
Committee at least twice per year.
A shorter register of Group principal
risks is specifically reserved for
review by the Audit and Risk
Committee. This is mainly, but
not exclusively, comprised of risks
above a certain threshold after
mitigation. These principal risks and
uncertainties are reported in the
Annual report.
Main developments in risk
As a result of this process, several
changes have been made to the
Group’s principal risks during the year
including:
• Business Interruption - COVID-19
was identified as an emerging risk
in the 2019 Annual report when the
main threat was seen to be to the
Group’s supply chain in China. As
the pandemic evolved into a global
crisis, the Group responded rapidly
to safeguard employees, protect
business operations, reduce
costs and preserve cash and
liquidity headroom. The pandemic
will remain a component of the
Group’s principal risks through
2021 and now forms a part of our
Group principal risk on business
interruption. Further details of
the impact of COVID-19 and the
Group’s response are set out in the
Chief Executive Officer's review on
page 38.
• Compliance with laws and
regulations – recognising the
Group is subject to the laws
and regulations of the countries
in which it operates has been
added as a Group principal risk.
The changing nature, breadth
and complexity of compliance
requirements is such that the
Group considers this a key area of
risk requiring proactive, ongoing
management.
Risk priorities in 2021
The risk priorities for the year ahead
are as follows:
• Continued focus on proactively
managing the impacts of the
COVID-19 pandemic to ensure
the safety and wellbeing of
our employees, continuity of
our operations and operational
resilience to enable us to meet our
customer needs.
• Continued assessment and
intensification of mitigation plans
relating to IT cyber security risks.
• Continued strengthening of
business continuity plans and
other key areas of operational
resilience given the need for
adaptability of the Group’s supply
chains, particularly in the context
of COVID-19 and changing geo-
political circumstances.
• Strengthening approaches for
monitoring market and competitive
trends given the challenging
market backdrop.
• Maintaining pricing discipline to
mitigate the risk of raw material
and other cost inflation.
• Project management rigour as
integration, rationalisation and
new product launch activities
support the Group’s organic
growth strategy.
• Continued review and response
to developments in corporate
governance including climate
change, ESG and corporate reform.
56
Tyman plcAnnual Report and Accounts 2020 Risk description
Mitigation
Risk
1
Business
interruption
(including
pandemic)
Trend after
mitigation
Link to strategy
2
Market
conditions
Trend after
mitigation
Link to strategy
The occurrence of an
event that may lead to
a significant business,
supply chain or market
interruption. This includes
events such as natural
disasters, pandemics
(including COVID-19),
significant IT interruption,
the loss of an operating
location or geo-political
events including significant
changes in trading
relationships such as
Brexit or US/China trade
developments. This results
in an inability to operate or
meet customer demand,
a reduction in market
demand or poses a health
risk to employees.
Demand in the building
products sector is
dependent on levels of
activity in new construction
and RMI markets. This
demand is cyclical and can
be unpredictable and the
Group has low visibility
of future orders from its
customers.
The Group has proactively managed its
response to the COVID-19 pandemic
throughout the year including extensive
health measures at operations; temporary
cost control measures; ongoing review
of demand and production levels, regular
review of supply chain ability to supply;
reviewing stock levels and responding;
increased contact with remote working
team members and weekly COVID-19
case reviews. More broadly the Group
reviews business continuity management,
IT disaster recovery, IT security as
appropriate throughout the year. The
Group also ensures appropriate insurance
cover is maintained.
Changes since
last Annual report
The most significant impact
throughout the year has
been the global impact of
the COVID-19 pandemic,
which was reported as a
watchlist risk in the last
Annual report and then
added to the Group’s
principal risks at the half
year. Given the duration,
uncertainty and widespread
impact of COVID-19, this
risk has been updated
to a broader business
interruption risk.
Risk assessment
High
Whilst there is a high degree of
economic uncertainty, in previous cyclical
downturns Tyman has proved effective in
responding to events through:
• monitoring of market conditions and
macroeconomic trends through both
annual strategic planning processes
and regular performance / forecasting
reviews;
• maintaining appropriate headroom
and tenor in the Group’s available
borrowing facilities;
• its geographic spread providing a
degree of market diversification;
• the ability to flex the Group’s cost
base in line with demand.
Markets have been
disrupted throughout the
year, predominantly in
H1 due to COVID-19. The
majority of the Group’s core
markets have rebounded
strongly throughout H2
with leading indicators
remaining positive. There
remains uncertainty over
medium to long-term
market conditions due
to wider macroeconomic
conditions.
Risk assessment
Medium
As part of its process for assessing the
ongoing viability of the Group, the Board
regularly stress tests Tyman’s financial
and cash flow forecasts over both a short-
and medium-term horizon.
Strategy Key
Trend after mitigation
Up
Same
Down
Margin expansion
Sustainable growth
Engaged people
Positive impact
57
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Principal risks and uncertainties CONTINUED
Risk description
Mitigation
Risk
3
Loss of
competitive
advantage
Trend after
mitigation
Link to strategy
4
Foreign
exchange risk
Trend after
mitigation
Link to strategy
Loss of competitive
advantage may adversely
affect the Group financial
performance or reputation
in the short to medium
term. The Group’s ability
to maintain its competitive
advantage is based on
a wide range of factors
including the strength
of the Group’s brands,
the breadth and depth
of our portfolio, the level
of quality and innovation
reflected in our products,
our supply chain flexibility,
excellent customer service
and technical support,
and the depth of customer
relationships we nurture,
all supported by fair and
competitive pricing. Failure
to perform on any one of
these aspects may lead
to erosion of competitive
advantage over time, and
in turn to loss of customers
to competition.
The Group operates
internationally and
is therefore exposed
to transactional and
translational foreign
exchange movements
in currencies other than
sterling. In particular
the Group’s translated
adjusted operating profit
is impacted by the sterling
exchange rate of the US
dollar and the euro. In
2020, 74% of the Group’s
adjusted operating profit
was derived from North
American operations which
are principally exposed to
the US dollar. The Group
is also exposed to interest
rate risks on its bank
borrowings.
Changes since
last Annual report
The overall risk from loss
of competitive advantage
across Tyman’s global
portfolio remains stable.
The disruption caused by
COVID-19 has put pressure
on service levels across the
industry. The flexibility of
the Group’s manufacturing
footprint allowed it to
respond quickly to closure of
certain facilities, delivering
better service levels than
some competitors and
enabling the Group to take
market share.
Risk assessment
Medium
Some of the Group’s markets are relatively
concentrated with two or three key
players, while others are highly fragmented
and offer significant opportunities for
consolidation and penetration.
Tyman continues to differentiate itself
through its wide range of products, its
focus on customer service including
technical support, its geographical
coverage, innovation capabilities and
the reputation of its brands. The Group
monitors the status of our competitive
advantage through feedback from
customers and close review of the market
positioning of our products.
The Group aims to minimise the impact
of competitve pricing pressures by
competitors through margin expansion
activities including continual sourcing
review, innovation and value engineering,
as well as building long-term relationships
with its customers based on value
creation, quality, service and technical
support.
The Group denominates a proportion of
its debt in foreign currency to align its
exposure to the translational balance
sheet risks associated with overseas
subsidiaries. Ancillary bank facilities are
utilised to manage the foreign exchange
transactional risks and interest rate
exposure through the use of derivative
financial instruments. Where possible the
Group will recover the impact of adverse
exchange movements on the cost of
imported products and materials from
customers.
Sterling exchange rates
remain volatile and the
Group continues to use
hedging to mitigate some
of this risk. This risk is
regarded as stable.
Risk assessment
Medium
Strategy Key
Trend after mitigation
Up
Same
Down
Margin expansion
Sustainable growth
Engaged people
Positive impact
58
Tyman plcAnnual Report and Accounts 2020
Risk
5
Liquidity and
credit risks
Trend after
mitigation
Link to strategy
6
Information
security
Trend after
mitigation
Link to strategy
7
Raw material
costs and
supply chain
failures
Trend after
mitigation
Link to strategy
Risk description
Mitigation
Changes since
last Annual report
The Group must maintain
sufficient capital and
financial resources to
finance its current financial
obligations and fund the
future needs of its growth
strategy.
The Group maintains adequate cash
balances and credit facilities with
sufficient headroom and tenor to mitigate
credit availability risk. The Group
monitors forecast and actual cash flows
to match the maturity profiles of financial
assets and liabilities. In the medium
term the Group aims to operate within its
revised target leverage range of 1.0× to
1.5× adjusted EBITDA.
During the year, the Group
has made good progress in
achieving its new medium-
term leverage target of
1.0× to 1.5× adjusted
EBITDA, finishing the year
at 1.1×.
Risk assessment
Low
The Group continues to develop and test
disaster recovery plans for all sites. The
Group undertakes regular penetration
testing of data systems and maintains
up-to-date versions of software and
firewalls. The Group periodically reviews
and improves IT system controls.
Information and data
systems are fundamental
to the successful operation
of Tyman’s businesses.
The Group’s digital assets
are under increasing risk
from hacking, viruses and
‘phishing’ threats. Sensitive
employee, customer,
banking and other data
may be stolen and
distributed or used illegally.
GDPR increases the cost of
any failure to protect the
Group’s digital assets.
Raw materials used in
the Group’s businesses
include commodities that
experience price volatility
(such as oil derivatives,
steel, aluminium and zinc).
The Group’s ability to meet
customer demands depends
on obtaining timely supplies
of high quality components
and raw materials on
competitive terms. Products
or raw materials may
become unavailable from
a supplier due to events
beyond the Group’s control.
The Group continues to invest in and
improve its sourcing and procurement
capability with dedicated supply chain
resources. The Group manages supply
chain risk through developing strong
long-term relationships with its key
suppliers, regular risk assessment
and audit of suppliers including
logistics providers, review of make or
buy strategies, dual-sourcing where
appropriate and maintaining adequate
safety stocks throughout the supply
chain. Where commodity and other
material cost increases materialise, the
Group seeks to recover the incremental
cost through active price management.
In August 2020, a Group
Head of IT was appointed
with responsibility for
the Group’s information
security policies and
controls. Training and IT
controls improvements
have continued to be
implemented during the
year.
Risk assessment
High
The Group has been
successful at recovering
input cost inflation and
foreign exchange volatility.
The Group continues to
proactively manage supply
chain risks, with current
focus in particular on
global shipping bottlenecks
and UK/EU supply chain
disruption.
Risk assessment
Medium
59
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT
Principal risks and uncertainties CONTINUED
Risk
8
Key executives
and personnel
Trend after
mitigation
Link to strategy
9
Compliance
with laws and
regulations
Trend after
mitigation
Link to strategy
Risk description
Mitigation
The Group’s future success
is substantially dependent
on the continued services
and performance of its
senior management and its
ability to continue to attract
and retain highly skilled
and qualified personnel at
Group, divisional and site
level.
The Group mitigates the risk of losing
key personnel through robust succession
planning, strong recruitment processes,
employee engagement and retention
initiatives, and long-term management
incentives.
A lack of understanding
or non-compliance with
laws and regulations in
any jurisdiction in which
the Group operates could
lead to significant financial
penalty and/or severe
damage to the Group’s
reputation. Legal and
regulatory requirements
can be complex and
are constantly evolving,
requiring ongoing
monitoring and training.
Keys mitigations include:
• A comprehensive and engaging Code
of Business Ethics and associated
training
• Supporting policies and standards that
set out the compliance requirements
in detail
• A group-wide ‘SpeakUp’
whistleblowing mechanism
• Risk framework to identify, assess and
monitor business and compliance risks
• Specific legal and compliance matters
reviewed by the Group General
Counsel as required
10
Execution
of major
programmes
Trend after
mitigation
Link to strategy
The Group has a range
of change management
programmes and strategic
initiatives underway to
support our ‘Focus, Define,
Grow’ Strategy. Failure
to effectively execute
these programmes could
adversely affect the Group’s
ability to deliver on key
elements of our strategy.
Oversight mechanisms to track the
progress of all strategic programmes
takes place on a monthly basis at Group
and divisional levels. In addition, each
programme has established project
governance disciplines in place including
project managers for each programme.
Changes since
last Annual report
Significant attention has
been paid to employee
wellbeing and engagement
through the COVID-19
pandemic, recognising the
additional strains this has
put on our workforce and in
particular on management
teams.
Risk assessment
Low
Whilst added as a Group
principal risk, there is no
year-on-year change in the
level of unmitigated risk.
A Group General Counsel
was appointed for the first
time in 2020. The General
Counsel led a process to
develop a new Code of
Business Ethics which will
be deployed in a series of
discussion sessions to all
employees in H1 2021.
Risk assessment
Low
Whilst added as a Group
principal risk there remains
no year-on-year change
in the level of unmitigated
risk.
Risk assessment
Medium
Strategy Key
Trend after mitigation
Up
Same
Down
Margin expansion
Sustainable growth
Engaged people
Positive impact
60
Tyman plcAnnual Report and Accounts 2020
Going concern and viability
Viability statement
Assessment of prospects
In assessing the long-term prospects
of the Group, the Board considers the
Group’s current position, including the
following factors:
• The Group has significant
headroom in borrowing facilities
and debt covenants at 31
December 2020, with liquidity
headroom of £213.0 million and
leverage of 1.1× compared to a
normal covenant of 3.0x adjusted
EBITDA (temporary relaxation at
31 December to 3.5×). A significant
deleveraging has been achieved in
2020 from 1.7× despite the effect
of COVID-19.
• Operations are highly cash
generative and drive a high
operating cash conversion ratio.
Cash conversion in 2020 is 131%
and over the longer term is c.90%.
• The performance through the
COVID-19 pandemic demonstrated
the ability of the Group to reduce
costs and preserve cash. The
strength of recovery through the
second half demonstrates the
resilience of the Group’s core
markets.
• The temporary relaxation of
covenants granted during 2020
indicates the support of the
Group’s lenders. In addition, the
Group has received an investment
grade rating through DBRS
Morningstar, indicating strong
creditworthiness.
In addition, the Board considers the
Group’s strategy and business model,
including the following factors:
• Favourable long-term
macroeconomics and megatrends
are expected to drive further
growth (see our markets section on
pages 16 to 18 for further details).
• Diversification across geographies
and markets provides resilience.
• Innovation capabilities quickly
allow the Group to adapt to
changing trends, such as
smartware and automation,
sustainability, fire integrity, and
anti-germ.
• There are high barriers to entry
through our deep customer
relationships, market-leading
brands, and domain expertise.
• The extensive portfolio of highly-
engineered, differentiated products
across hardware, smartware and
seals and extrusions, combined
with value-added support services.
• Co-development and customisation
services create long-term
partnerships.
• Sustainability in our operations,
culture, and solutions is a core part
of our strategy.
• Rationalisation of footprint and
other self-help activities are driving
margin expansion.
• The growth strategy is focused on
gaining market share through new
product introductions and channel
expansion initiatives.
The Group’s strategy and business
model are central to understanding
the future prospects and viability
of Tyman. Both are well established
and subject to regular monitoring
and development by the Board. See
further details of the Group’s strategy
on pages 20 to 30 and of the Group’s
business model on pages 14 to 15.
The principal risks related to the
business are also taken into account
by the Board when assessing the
long-term prospects of the Group,
particularly business interruption
(including pandemic), market
conditions, and loss of competitive
advantage risks. See further details
of the Group’s principal risks on pages
54 to 60.
Structured budgeting and
strategic planning process
Tyman’s longer term prospects are
assessed primarily through the
Group’s budgeting and strategic
planning process. The annual Group
budget is compiled in the autumn of
each year and generates a detailed
forecast for the year ahead. This
is reviewed and approved by the
Board. A strategic planning process
is also conducted, covering the next
three years on a rolling basis. This
process includes a review of divisional
strategic plans by the Tyman Executive
Committee as well as cross-divisional
initiatives. The Board participates
in the process through attendance
at a strategy day, at which Group
and divisional management present
strategic plans. The Board also
receives monthly strategy updates
from the Chief Executive Officer.
The output of the strategic plan
includes a consolidated set of
financial projections for the Group
covering a period of the next three
years, including a review of forecast
debt covenant compliance and
debt headroom. The strategic plan
reviewed as part of the assessment
of prospects in this report therefore
covers the three-year period ending
31 December 2023.
Key assumptions
The key assumptions underpinning the
2021 to 2023 strategic plan include:
• average market growth forecasts
in line with local consensus;
• no future loss of significant
customers;
• conservative forecasts of market
share growth, selling price
increases and the impact of new
product development;
• conservative forecasts of the
benefits from self-help and
continuous improvement activities;
and
• no future acquisitions or disposals.
Assessment of viability
In accordance with provision 31 of the
Code, the Directors have assessed
the future viability of the Group. This
assessment takes account of the
Group’s current trading position and
the potential impact of the principal
risks and the mitigating actions
documented on pages 54 to 60 of
the Annual report. Consistent with
previous years, the Directors have
determined that three years is an
appropriate timeframe over which to
provide a viability statement, as this
is the timeframe currently adopted
by the Board as its strategic planning
period.
A three-year period aligns with
the Group’s typical investment
time horizon. In addition, the
Directors consider that demand in
the Group’s business is ultimately
driven by consumer confidence and
discretionary spending patterns which
are difficult to project accurately
beyond a three-year time horizon.
The strategic plan therefore reflects
the Directors’ best estimate of the
future prospects of the business over
the three-year period.
In order to assess the Group’s
viability over this period, the strategic
plan has been flexed by overlaying
the cumulative financial impact of
a number of downside scenarios
to represent ‘severe but plausible’
circumstances that the Group might
experience. These scenarios are based
on the potential financial outcomes
of certain of the Group’s principal
risks crystallising such as the impact
of further lockdown restrictions
associated with the COVID-19
pandemic, a severe deterioration
in market conditions (which might
include the impact of deterioration in
global trading relationships), loss of
business to competitors, loss of major
customers, and raw material costs and
supply chain failures.
61
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Going concern and viability CONTINUED
The downside scenarios applied to the strategic plan are summarised below.
Severe but plausible downside scenario
The ‘severe but plausible’ scenario models the impact of a significant short-term contraction in revenue on the Group,
combined with a material one-off cash outflow. The scenarios reflect deterioration against the base case.
Strategic plan flexed
for combinations of the
following scenarios
Further COVID-19 lockdowns
or serious outbreak requiring
facility closure
Severe downturn in market
conditions
Aggressive competitor actions
resulting in a loss of market
share
Link to principal risks
and uncertainties
Level of
severity tested
Conclusion
Business interruption
Market conditions
Loss of competitive
advantage
17% fall in revenue in
year one followed by
only inflationary growth
in the following two
years
£8.0 million one-off
exceptional cash cost in
year one
This scenario reflects the equivalent
of the downturn experienced
in H1 2020 at the height of the
pandemic persisting for the entire
of 2021, with only nominal growth
in the following two years. This is
considered unlikely given current
trading levels.
Tyman, after undertaking
reasonable mitigating actions,
should be able to withstand the
impact of this severe but plausible
scenario.
Reverse stress test scenario
The ‘reverse stress test’ scenario models the impact of a larger short-term contraction in revenue which is sustained for
a period of time, together with a material one-off cash outflow.
Strategic plan flexed
for combinations of the
following scenarios
Further COVID-19 lockdowns
as well as more prolonged
impact on economy
Extreme downturn in market
conditions
Aggressive competitor actions
resulting in extreme loss of
market share
Link to principal risks
and uncertainties
Level of
severity tested
Conclusion
Business interruption
Market conditions
Loss of competitive
advantage
33% fall in revenue
in year one followed
by further 5% fall in
revenues in each of the
following two years
£20.0 million one-off
exceptional cash cost in
year one
This sustained level of performance
deterioration is considered highly
implausible and would make the
future viability of the Group less
certain.
The flexed models take account of the availability and likely effectiveness of mitigating actions available to the Group,
including the flexing of working capital, capital expenditure and discretionary spend. The models do not include significant
structural actions, such as mothballing facilities or divesting assets. The models also do not consider changes to the
Group’s capital structure it may be able to make through refinancing existing debt facilities and/or raising equity finance.
Viability statement
Based on their assessment of the prospects for the Group and principal risks and the viability assessment above, the
Directors confirm that they have a reasonable expectation that the Group will be able to continue in operation and meet
its liabilities as they fall due over the period to 31 December 2023.
Going concern
As a consequence of the work undertaken to support the viability statement above, the Directors have continued to adopt
the going concern basis in preparing the financial statements (see note 2.2 Going concern in the notes to the financial
statements).
62
Tyman plcAnnual Report and Accounts 2020 Non-financial information statement
The Group has complied with the non-financial reporting requirements contained in sections 414CA and 414CB of the
Companies Act 2006. The table below summarises where this information is included in the Annual report and Accounts:
Reporting requirement
Environmental matters
Employees
Human rights
Location
Sustainability performance on pages 68 to 79
Strategy on pages 20 to 30
Our people on pages 77 to 78
Diversity and inclusion section on page 78
Anti-corruption and anti-bribery matters
Ethics and compliance on page 77
Social matters
Business model
Principal risks
Non-financial KPIs
Community investment on page 78
Business model on pages 14 to 15
Risk management on pages 54 to 60
Lost time incidents and greenhouse gas emissions on page 33
63
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Section 172 statement
In accordance with the duties of Directors
under section 172 of the Companies Act
2006, the Board considers a number of
factors in its decision-making, including:
• the likely consequences of any decision in the
long-term;
• the risks to the Group and its stakeholders;
• the interests and wellbeing of our people;
• the Group’s relationships with its customers and
suppliers;
• the importance of our reputation for high standards
of business conduct; and
• the impact of our businesses on the environment
and the communities where we are present.
Tyman engages extensively with its stakeholders at
all levels of our business because we believe that the
understanding of such stakeholders through engagement
is vital to the Group’s success.
Some examples of direct engagement by the Board include
the Workforce Engagement NED’s skip-level meetings with
employees and their representatives; and conference calls
with customers, suppliers or shareholders.
Engagement may also be indirect, such as through Board
reports, employee surveys and feedback from investors
through analysts.
All such engagement has provided invaluable input to the
Board’s discussions leading to decision making.
This year the Board has carefully considered the impact
of the COVID-19 pandemic on all the stakeholder groups,
but in particular its impact on the health and safety of our
employees, their families and our communities.
This statement should be read in conjunction with: the
Chair’s statement on pages 34 to 35; the CEO review on
pages 36 to 37; the Financial review on pages 46 to 53; the
risk section on pages 54 to 60; the sustainability section on
pages 68 to 79; and the Governance and Directors' reports
on pages 83 to 88.
64
Employees
Customers and End-users
Partners
Why it is important to engage with this
stakeholder group
We are proud of our committed employees and aim
to make them proud of their employer because an
engaged workforce is also a productive one and
better able to attract and retain the best talent.
By understanding the broad spectrum of our
employees’ talents, ambitions, needs and concerns,
we aim to foster diverse and inclusive workplaces in
which every employee can attain their full potential
and achieve job satisfaction.
How did Tyman engage in 2020?
• Employee surveys, including dedicated focus
groups to support the development of the
Group’s purpose and values during 2020 (see
pages 6 to 7)
• Training and development (e.g. Safety Leadership
Programme, see pages 68 to 69)
• Skip-level meetings with the designated
Workforce Engagement Non-executive Director,
Pamela Bingham (see page 86)
• Skip-level meetings with the Group Chief
Executive and divisional senior management
• Site visits by members of the Board (conducted
physically and online)
• All-employee communications from the Group
Chief Executive, including a video from the
Executive Committee at the start of 2020, which
was presented in hosted discussion forums, and
periodic letters during the year (see page 78)
• Whistleblowing hotlines (see page 77)
Why it is important to engage with this
Why it is important to engage with this
stakeholder group
We want to continually deliver the best relevant
products to our customers on time every time.
Engaging with our customers enables us to better
stakeholder group
We engage with our suppliers to ensure that our
values are not compromised as well as security of
supply, value for money and speed to market. For
evaluate our past performances and to understand
these reasons, we establish lasting relationships
their current and future needs. Engagement
also highlights opportunities for innovation and
improvement to our products and processes.
By doing so, we aim to build enduring relationships
with our customers and continually attract new ones.
How did Tyman engage in 2020?
• Ongoing management of customer relationships
• Participation in industry forums and events
• Meetings to discuss sustainability objectives (see
(see page 14)
page 20)
• Insight into the Group’s customer and end-user
base through regular Board updates, including
the Group Strategy Day (see page 61).
with carefully selected high-quality suppliers
who can ensure that our businesses continue to
deliver sustainable market-leading products that
meet or exceed our customers’ expectations and
requirements and are delivered on time in full.
How did Tyman engage in 2020?
• Ongoing management of supplier relationships
(see pages 14 and 79)
• Insight into the Group’s supplier base through
regular Board updates, including the Group
Strategy Day (see page 61).
Tyman plcAnnual Report and Accounts 2020 Employees
Customers and End-users
Partners
Why it is important to engage with this
stakeholder group
We want to continually deliver the best relevant
products to our customers on time every time.
Engaging with our customers enables us to better
evaluate our past performances and to understand
their current and future needs. Engagement
also highlights opportunities for innovation and
improvement to our products and processes.
By doing so, we aim to build enduring relationships
with our customers and continually attract new ones.
How did Tyman engage in 2020?
• Ongoing management of customer relationships
(see page 14)
• Participation in industry forums and events
• Meetings to discuss sustainability objectives (see
page 20)
• Insight into the Group’s customer and end-user
base through regular Board updates, including
the Group Strategy Day (see page 61).
Why it is important to engage with this
stakeholder group
We engage with our suppliers to ensure that our
values are not compromised as well as security of
supply, value for money and speed to market. For
these reasons, we establish lasting relationships
with carefully selected high-quality suppliers
who can ensure that our businesses continue to
deliver sustainable market-leading products that
meet or exceed our customers’ expectations and
requirements and are delivered on time in full.
How did Tyman engage in 2020?
• Ongoing management of supplier relationships
(see pages 14 and 79)
• Insight into the Group’s supplier base through
regular Board updates, including the Group
Strategy Day (see page 61).
Why it is important to engage with this
stakeholder group
We are proud of our committed employees and aim
to make them proud of their employer because an
engaged workforce is also a productive one and
better able to attract and retain the best talent.
By understanding the broad spectrum of our
employees’ talents, ambitions, needs and concerns,
we aim to foster diverse and inclusive workplaces in
which every employee can attain their full potential
and achieve job satisfaction.
How did Tyman engage in 2020?
• Employee surveys, including dedicated focus
groups to support the development of the
Group’s purpose and values during 2020 (see
pages 6 to 7)
• Training and development (e.g. Safety Leadership
Programme, see pages 68 to 69)
• Skip-level meetings with the designated
Workforce Engagement Non-executive Director,
Pamela Bingham (see page 86)
• Skip-level meetings with the Group Chief
Executive and divisional senior management
• Site visits by members of the Board (conducted
physically and online)
• All-employee communications from the Group
Chief Executive, including a video from the
Executive Committee at the start of 2020, which
was presented in hosted discussion forums, and
periodic letters during the year (see page 78)
• Whistleblowing hotlines (see page 77)
65
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Section 172 statement CONTINUED
Investors
Society
Why it is important to engage with this
stakeholder group
As a company that is premium-listed on the London
Stock Exchange’s Main Market, an issuer of private
debt placement notes in the USA and a borrower
of bank debt, we want to help our shareholders
and lenders develop a strong understanding of how
the Group’s businesses are managed to generate
sustainable returns and long-term success.
The support of our investors, and our ability to attract
new ones, enables us to finance our growth activities
and build a stronger Group.
How did Tyman engage in 2020?
• Meetings and other communications with current
and potential shareholders (see page 87)
• Meetings and other communications with current
and potential lenders (see page 49)
• Meetings with analysts and brokers’ sales teams
(see page 87)
Why it is important to engage with this
stakeholder group
We want to be a good employer and responsible
neighbour in the communities in which we operate.
We aim to create positive outcomes through our
involvement in society.
By caring for our communities and environment, our
businesses will be better placed to deliver long-term
success.
We aim to be a responsible corporate citizen in each
country that we operate by seeking its success.
We constructively engage with industry bodies to
share our expertise and help shape new regulations
and standards in security and insulation.
How did Tyman engage in 2020?
• Engagement with authorities on repayment of
state aid (see page 95)
• Membership of trade associations and industry
• Addressing enquiries from institutional and retail
bodies
investors
• The 2020 AGM and 2019 Annual report and
Accounts
• Regulatory announcements (see page 87)
• Corporate website
66
Tyman plcAnnual Report and Accounts 2020 Case study
Transforming
‘Le Grenier des Arts’
Le Grenier des Arts is a media library in Magnanville,
France. It has been named in honour of the Grenier
family, the last family to have lived in this elegant 18th
century building. The desire was to sympathetically
extend the old stone-built family house with two new
glass structures, combining the new cultural vocation of
the house with its family past.
It was important for the modern extension to subtly
complement the historic stone building, and this was
achieved by using a 417 m2 glass façade that blended in
to the surrounding park.
Minimal-sightline aluminium profiles were used for
the all-glass façade, and requirements including wide
emergency exits and European thermal regulations had
to be addressed. This required window hardware that
would provide excellent performance in a tight space.
Profils Systèmes, one of the foremost system houses
in France, was appointed to supply and install the glass
structures of the library. Giesse has collaborated with
Profils Systèmes since 2013 on such projects, with
the relationship strengthening as the market trend for
minimal hardware and handles has grown. Giesse CHIC
concealed hinges and NP Ultra minimal handles are
designed to address this trend.
Giesse developed an exclusive NP Ultra handle variant
for the project and this enabled Profils Systèmes to use
their aluminium top-hung windows, which offer a very
high degree of light input, while also providing high
performance even with minimal profiles. This achieved
the objective of a modern design and standards, while
being sympathetic to the history of the building.
The objective was to create
a peaceful, light-filled place
for users, connected to the
natural surroundings. The
two glass extensions meet
these objectives. The interior
is flooded with light. Each of
the rooms enjoys a 360° view,
that was a specific feature of
this project. There’s a direct
connection, a constant play,
between interior and exterior.
When you look at it from the
outside there’s a continuity
across all the facades: the
big glass-covered facades
rise elegantly, with very little
aluminium joinery in view.”
Pierre Duhan
Architect
Axis Architecture
67
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Sustainability performance
Sustainability performance
Tyman health and safety management system
Divisional CEOs
report performance
monthly to Tyman
CEO at BPR
meetings
Local management
report on health and
safety performance
at least weekly to
divisional CEOs
Health and safety
management
systems provide
feedback to local
management on
effectiveness of
health and safety
arrangements
Group HSS Director
• Reports to the CEO
• Works with the
ExCo, senior leaders
and divisional HSS
managers to drive
health and safety
performance
• Develop group-wide
programmes and
strategies
Group HSS Forum
• Monthly review
chaired by Group
HSS Director with
divisional HSS leads
• Health and safety
performance
• Share incident
learnings and track
corrective actions
• Develop and deploy
best practice
Board of Directors
Chief Executive Officer
Overall accountability
for health and safety
performance across the
Group
Executive Committee
• CEO accountability
discharged to local
management through
the Executive
Committee
• Divisional CEOs
regularly review
performance and
effectiveness of
arrangements
Local Management
• Responsible for
health and safety
performance
• Adherence to Group
and divisional health
and safety policies,
standards, reporting
requirements
• Compliance with
health and safety
regulations
Health and Safety
Management Systems
• Health and safety
committees
• Identify, assess and
take action to control
risks, including safe
working practices
• Employee training &
engagement
• Audit and
management review
Sustainable operations
22%
reduction in lost time incident
frequency rate vs 2019
Targets have been established for
GHG emissions, water and waste
Safety excellence
Safety is our first language. It is a
focus at every level of the Group from
the Board and Executive Committee
to divisional leadership teams, site
management and individual teams.
Local management is responsible
for health and safety performance
with oversight provided by dedicated
Health, Safety and Sustainability (HSS)
leads in place in each division.
All our businesses have health and
safety management systems in place to
identify, control and take action on risks
in the workplace, alongside training,
audits and local management reviews.
Where considered appropriate for their
particular markets, our businesses
also seek external certification
to international health and safety
standards. Three plants in the UK
(Harrogate, Henlow and Newton Aycliffe)
are certified to ISO 45001.
During the year, the Group focused
on four areas to help build a common
culture of safety excellence across its
operations:
• Greater attention on leading
indicators of performance such as
hi-potential near miss incidents and
safety leadership tours (see table
opposite) in addition to increased
rigour injected into root cause
analysis for incident investigation
and higher levels of focus on the
risk control hierarchy.
• Engaged all our people under
the banner of safety is our first
language through a structured
programme of video, golden rules,
focus groups, CEO all-employee
communications and a common
suite of communications materials.
• Deployed new group-wide safety
standards for Lock-Out Tag-Out,
electrical safety and machinery
safety (with more to follow in 2021
including working at height and
manual handling).
• Launched a two-day safety
leadership programme to shift
mindsets towards a behavioural
approach to safety excellence.
68
Tyman plcAnnual Report and Accounts 2020 Full roll out of our safety leadership programme was delayed by the COVID-19 pandemic. By year end 192 senior leaders,
managers, supervisors and team leaders completed the course and we expect deployment of the programme to be
complete by the end of Q1 2021. This leadership programme has been well received by participants and has contributed to
a more cohesive and accountable culture across the Group with its focus on coaching, employee engagement and mindful
leadership.
Safety Performance – Leading and Lagging Indicators (employees/agency)
Metric
Lost Time Incident Frequency Rate
(LTIFR)
Total Recordable Incident Rate
(TRIR)
Number of fatalities
Number of serious incidents3
Number of lost time incidents
Number of Hi-potential near miss
incidents4
Number of safety improvement
opportunities (unsafe act/condition)
Number of safety leadership tours
Hours worked (employee/agency)
Targets
2020
2019
2018
2017
2016
<1.0 by 2022
<3.0 by 2026
zero
3.121
7.452
0
1
23
24
4.00
7.56
0
4
34
21
4.81
6.15
5.85
n/a
0
n/a
44
n/a
n/a
0
n/a
49
n/a
n/a
0
n/a
44
n/a
7,384
1,635
7,377,6965
10,065
1,363
8,598,679
9,756
n/a
9,141,132
7,994
n/a
7,962,376
7,998
n/a
7,527,146
1. Lost Time Incident Frequency Rate per 1 million hours worked (incidents resulting in one or more days away from work, excluding
the day of the incident) including 12 COVID-19 cases resulting from workplace transmission at one location in a North American
community hotspot. All 12 employees testing positive for COVID-19 following workplace transmission have returned to work following
completion of self-isolation. The 2020 LTIFR excluding COVID-19 cases for a like-for-like comparison to previous years is 1.49.
2. Total Recordable Incident Rate for all work-related injuries or illnesses to employees (incl. agency staff) that causes fatality,
unconsciousness, lost workdays, restricted work activity, job transfer or medical care beyond first aid, per 1 million hours worked.
Includes 12 COVID-19 workplace transmission cases. The 2020 TRIR excluding COVID-19 cases for a like-for-like comparison to 2019
is 5.83.
3. Serious incidents are those deemed life threatening or life changing due to their severity
4. Hi-potential (HiPo) incidents did not cause serious injury but could have done under different circumstances.
5. Revised definition excluding all types of absence such as holiday, furlough and other non-working time.
Despite this progress, the Group is
disappointed to report one serious
injury in 2020 (2019: four). This injury
took place in our plant in Owatonna,
where the flesh part of an employee’s
finger was severed in a machinery
incident. Corrective and preventative
action has been put in place, including
a group-wide machinery safety
standard.
Health surveillance programmes are
in place across the Group for routine
exposures such as noise and airborne
dust/fume from painting and welding.
No occupational health exposures
resulted in lost time during the year
(2019: zero).
Lessons learned from HiPo and other
incidents are shared across the Group
and where appropriate Group safety
alerts issued and corrective actions
tracked to closure. Our safety KPIs
are all trending positively, with the
exception of safety improvement
opportunities. Factory closures and
social distancing restrictions due to
COVID-19 reduced the number of
safety improvement opportunities
typically identified through direct
engagement with employees,
resulting in a drop in 2020 to 7,384
(2019: 10,065).
The Group is pleased to report
continued improvement in its core
safety metric, the LTIFR, with a 22%
reduction in 2020 to 3.12 (2019: 4.0)
and a 32% reduction in absolute
terms to 23 lost time incidents (2019:
34). Zero recordable incidents/
fatalities were reported during the
year involving contractors and visitors
working at our sites.
Lost time incidents
20
19
18
17
16
3.12
23
4.00
34
4.81
44
6.15
49
5.85
44
••—— Lost Time Incident Frequency Rate (LTIFR)
Lost time incidents by
cause 2020 vs 2019
Repetitive
motion/strain
Slips, trips
and falls
5
2
2
7
0
0
0
Burns and
scalds
Manual
handling
Pinch/cut/
contact
Other
1
0
COVID
0
6
6
2020
2019
16
12
69
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Sustainability performance CONTINUED
Automated temperature checks based on facial recognition
are used to control entry in our Wolverhampton site
Perspex screens between operators to mitigate
social distancing challenges in Budrio
70
COVID-19
In January 2020, the Group
established a global cross-functional
COVID-19 crisis team to prepare
for the pandemic as it started
to pick up momentum in China.
Business continuity arrangements
were activated when the flow of
components from China were
disrupted and mitigation plans were
also deployed to make our facilities
around the world COVID-19 secure.
Experience gained from dealing with
the pandemic in China and then Italy
was invaluable in helping the plants in
the UK and North America make their
preparations. COVID-19 protocols
were continually updated in light of
experience and guidance from local
health authorities and the World
Health Organisation.
Controls were established around
business travel and visitor access to
our sites. Strict hand and respiratory
hygiene protocols, workstation
cleaning and social distancing
measures were deployed. Changes
were made to shift patterns and
factory layouts, plastic screens
installed where social distancing was
impractical, canteen arrangements
adapted and office-based employees
worked from home. Temperature
monitoring, testing and audit regimes
were also put in place, as well as
employee communication campaigns
to encourage the right behaviours
outside of work as well as inside.
Wellbeing
The COVID-19 pandemic has
heightened societal awareness
of mental health and wellbeing.
We continue to run mental health
awareness courses for our managers
to improve the early identification
and management of mental health
concerns. In 2020, six volunteers
received training to become Tyman
UK’s first mental health first
aiders. A major research study into
mental health and wellbeing was
completed by our operations in Italy
in partnership with the University of
Padua. Focus groups representing
44% of the combined workforce in
our Agnosine and Budrio plants were
held to understand personal beliefs,
organisational culture and barriers
to improved mental health and
wellbeing. Improvements identified
included raising awareness of the
workforce as a whole, equipping
our leaders with the skills to better
manage mental health and well-being
issues, increasing opportunities for
personal development and enhancing
interdepartmental planning and
collaboration.
Tyman plcAnnual Report and Accounts 2020 Environment
Our businesses have policies and
programmes in place for managing
the environment, including
compliance with local regulations.
These policies and management
systems cover areas such as the
use of materials, including the
principles of reduce, re-use and
recycle and ongoing energy and
water efficiency programmes. These
measures help improve production
efficiencies, deliver compliance with
legal obligations, reduce costs and
minimise our environmental impacts.
Where considered appropriate
for their particular markets, our
businesses also seek external
certification to international
environmental standards. Eight
locations in the UK and Italy have
environmental management systems
in place that are externally certified
to the ISO 14001 international
standard, representing 22% of the
Group’s revenue (2019: 21%). We
believe our approach to a more
sustainable future is best served
through the targets and ambitions set
out in our sustainability roadmap (see
pages 20 to 29) rather than extending
the procedural elements of ISO 14001
to other locations.
Energy and greenhouse
gas emissions
The Group is required to measure
and report its global Greenhouse Gas
('GHG') emissions according to the
Companies Act 2006 (Strategic report
and Directors’ reports) Regulations
2013 in the UK. We have included
full reporting for Scope 1 and 2 and
select Scope 3 reporting in line with
best practice. We apply the GHG
protocol as the basis for reporting
emissions of greenhouse gases from
facilities over which the Group has
operational control.
Scope 1 and 2
Scope 11 direct emissions TCO2e
Scope 22 indirect emissions TCO2e
Total Scope 1 & 2 emissions TCO2e
Intensity ratio (Scope 1 & 2) TCO2e per
£m revenue
Global energy consumption used to calculate
above emissions kWh3
Scope 3
Employee business travel (flights) TCO2e
Water use TCO2e
Purchased raw materials TCO2e
Total Scope 34 emissions TCO2e
2026 Target
Energy and GHG emissions
2019
2020
12,4815
11,605
30,0025
28,790
42,483
40,395
2018
13,988
33,327
47,315
2017
12,046
26,376
38,423
2016
12,115
16,064
28,179
34.61
70.52
69.22
79.99
73.51
61.58
126,633,405
228
493
187,560
188,281
1,163
544
n/a
1,707
–
–
–
Notes:
1. Direct emissions through combustion of fuels and process emissions using DEFRA GHG and IEA conversion factors.
2. Indirect emissions through consumption of electricity (location-based method) using DEFRA GHG and IEA conversion factors.
3. Required by the UK Government’s Streamlined Energy and Carbon Reporting (SECR) using DEFRA conversion factors for natural gas
and combustion of fuel for heating and process use, electricity consumption and transport fuel (from quantities consumed) across our
global operations.
4. Estimate based on emissions associated with employee business travel (flights) and consumption of water from 2019 onwards and
major purchased raw materials from 2020 (aluminium, zinc, steel and polypropylene).
5. Restated with updated data.
71
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Sustainability performance CONTINUED
Lockdowns in response to the
COVID-19 pandemic in many
of our markets in Q2 impacted
our operations and reduced our
absolute emissions associated with
our consumption of energy and
business travel, with flights and
vehicle use significantly down. A
number of smaller facilities were
also closed part way through the
year in Australia, China and the
US (Fremont). Our Scope 1 and 2
emissions in TCO2e per £m revenue
increased by 1% in 2020 to 70.52
(2019: 69.22), with reduced sales
over the year impacting the Group’s
performance against this intensity
measure.
Scope 1 and 2 GHG emissions
TCO2e / £m revenue
20
70.52
19
18
17
16
69.22
79.99
73.51
61.58
A number of energy saving projects
were introduced during the year,
including:
• LED lighting upgrades in Agnosine
(Italy), Athens, Barcelona, Dubai,
Mexico, Henlow and Newton
Aycliffe in the UK and Owatonna in
the US.
• Compressed air system upgrade in
Statesville.
• New more efficient fluidisation
furnace reducing natural gas
consumption in Monterrey.
• Expanded use of video
conferencing in preference to
business travel.
For the first time we have estimated
the Scope 3 emissions arising
from purchasing our four main raw
materials (aluminium, steel, zinc and
polypropylene). While only an initial
estimate, these materials accounted
for more than 80% of our overall
calculated Scope 1-3 footprint.
We will improve the quality of this
data as part of our commitment to
developing a Science Based Target
for all three scopes. See page 23
for further details of our plans to
reduce our use of energy and GHG
emissions.
72
Tyman plcAnnual Report and Accounts 2020 Climate risks and opportunities
As part of the Group’s preparations for new disclosure requirements for UK listed companies under the Task Force for
Climate-related Financial Disclosures (TCFD), we completed an initial assessment of climate-related financial risks and
opportunities (see table below). The Group will benefit from the decarbonisation of the built environment with more
energy efficient windows and doors being part of the solution. Areas of risk that need to be explored further include
the potential disruption of our supply chains due to climate change, impacts on material costs and availability over
the long-term. During 2021, more detailed preparations will be made to ensure we can report more fully on the TCFD
requirements.
Transition risks
Policy and legal
Physical risks
Acute (event driven)
• Low risk (carbon pricing, litigation, product regulation)
• The Group is not subject to carbon emissions trading
schemes such as the EU Emissions Trading Scheme
• TCFD will require additional disclosures in 2022
• Current impact of extreme weather events on own
operations is limited
• Assessment required to determine the potential for
disruption to Group’s supply chains from extreme
weather events
Technology
Chronic (longer-term shift in climate patterns)
• Own locations not vulnerable to sea level rise
• Assessment needed against other flooding risks
impacting the Group’s operations
• Water availability may be an issue in the long-term in
some locations (e.g. Mexico). Water stress mapping to
be undertaken (sustainability roadmap)
• Asia will experience significant changes in climate (e.g.
typhoons in China and extreme heat in India) which
could disrupt our supply chains. Further assessment of
this risk to be undertaken
• Investment is needed to deploy low carbon
technologies, renewables and energy efficiency
measures to achieve the Group’s carbon reduction
targets
• Investment may also be needed to research
alternative lower carbon materials
Market
• In the medium to long-term, OEMs are likely to source
lower carbon components to reduce the embodied
carbon in the manufacture of windows and doors
• Material costs could also increase as primary
producers of metals and polymers are subject to
carbon pricing increases
• Freight costs may also increase
Reputation
• Increasing investor expectations for credible carbon
reduction plans are now reflected in the Group’s
sustainability roadmap
• Risk of stigmatisation of the sector considered low
given that windows and doors are part of the solution
to combatting climate change
Opportunities
Resource efficiency
Products and services
• Improved resource efficiency in production and
distribution, through recycling of waste and reduction
in water usage will lower costs
• The Group has established reduction targets for
Scope 1 and 2 emissions (see pages 23 and 71),
water use and waste (see page 76)
• The Group is well placed to benefit from the low
carbon transition through increased demand for
existing products for windows and doors, together
with innovation opportunities to build on existing
energy saving products such as seals and thermally
insulated roof hatches
Energy sources
• With over 70% of our operational footprint derived
from our use of electricity we can benefit from green
procurement tariffs and the deployment of on-site
renewable energy technologies, where available
• These measures will improve the Group’s resilience to
increases in fossil fuel prices
• With the Group’s sustainability roadmap driving
product innovation, we may be able to increase access
to investment capital, including ESG and impact funds
73
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Sustainability performance CONTINUED
The Task Force for Climate-related Financial Disclosures (TCFD)
The Group welcomes the introduction of the TCFD recommendations with its focus on understanding the implications of
a changing climate on business. During the year we have raised awareness of the climate-related risks and opportunities
across our senior leadership population, completed an initial assessment of these risks and opportunities and established
targets to reduce the greenhouse gas emissions associated with our operations. Work will continue over the coming year
to report more fully against the TCFD framework.
Disclosure
Governance
Commentary
a. Describe the Board’s
• The CEO is the main Board member with overall accountability for sustainability
oversight of climate-related
risks and opportunities.
b. Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
matters, including climate-related risks and opportunities.
• The Board is responsible for approving the Group’s sustainability roadmap and
approach for managing climate-related risks and opportunities. They have
oversight of the roadmap execution including progress towards its targets.
• The day-to-day operational control of climate-related risk is delegated to the
Executive Committee with guidance provided by the Group Health, Safety and
Sustainability Director, reporting to the CEO.
• Work commenced during the year on engaging the divisional senior leadership
teams on the implications of climate-related risks and opportunities and the
development of action plans to mitigate our impacts and build on the opportunities
available.
• See page 73. Areas of risk that need to be explored further include potential
disruption to our supply chains due to climate change over the medium term
(5+ years), impacts to material and energy costs, and availability over the
medium to long term (5-10+ years).
• Decarbonisation and net zero goals will drive increased demand for more energy
efficient windows and doors in both new build and retrofit, as well as increased
demand for energy saving seals, thermally insulated roof hatches and adaptation
solutions such as extreme weather protection products.
• Further work will be undertaken in 2021 to build a deeper understanding of how a
changing climate will impact our operations, supply chain, financial planning and
future product revenues.
• Work on climate-related scenarios will begin in 2021.
• The Board has overall responsibility for risk management and delegates oversight
to the Audit and Risk Committee. Climate change was identified as a risk priority
through our established risk management process (see page 56).
• An initial assessment of climate-related financial risks and opportunities
against the TCFD framework was undertaken by the Group Health, Safety and
Sustainability Director in 2020 (see page 73), and action plans will be further
developed during 2021.
• Business continuity plans are in place to respond to extreme weather events
impacting our operational portfolio and supply chains.
• Each division maintains risk registers for a range of strategic, financial,
operational and compliance risks including those relating to business and supply
chain disruption.
• These risk processes will be further strengthened in 2021 through a deeper
assessment of a broader set of climate-related risks under the TCFD framework.
Strategy
a. Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium and
long term.
b. Describe the impact of
climate-related risk and
opportunities on the
organisation’s businesses,
strategy, and financial
planning.
c. Describe the resilience of the
organisation’s strategy taking
into consideration different
climate related scenarios
including a 2°C or lower
scenario.
Risk Management
a. Describe the organisation’s
processes for identifying and
assessing climate-related
risks.
b. Describe the organisation’s
processes for managing
climate-related risks.
c. Describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
74
Tyman plcAnnual Report and Accounts 2020 Disclosure
Commentary
Metrics and targets
a. Disclose the metrics used
by the organisation to
assess climate-related risks
and opportunities in line
with its strategy and risk
management process.
b. Disclose Scope 1, 2 and
if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the
related risks.
• The Group reports on a range of consumption and intensity metrics relating to
energy, carbon, water and waste on pages 71 and 76.
• Our climate-related metrics cover Scope 1, 2 and selected Scope 3 emissions in
metric tonnes (CO2e) together with an intensity metric based on TCO2e per £m
revenue for Scope 1 and 2 emissions.
• In anticipation of the importance of our upstream impacts in our overall footprint,
we have started to collect embodied carbon and recycled content data for major
raw materials (metal and polymer) to lay the foundations for a more circular
approach to resource usage going forward.
• Scope 1,2 and selected Scope 3 GHG emissions are reported on page 71.
c. Describe the targets used by
the organisation to manage
climate-related financial
risks and opportunities and
performance against targets.
• The Group has established targets for our own greenhouse gas emissions as part
of our sustainability roadmap (see page 20). These include a 50% reduction in
Scope 1 and 2 emissions per £m revenue by 2026 and carbon neutrality for our
own operations by 2030 (Scope 1 and 2 emissions).
• We will develop a Science Based Target for the Group in 2022, extending our
ambitions to Scope 3 emissions across the value chain.
• The Group has also set targets to increase its revenues of products that positively
contribute to the UN SDGs with year-on-year improvement from a 17% baseline
in 2020, including products that directly contribute to energy efficiency and
adaptation solutions as part of a growing green economy (see pages 28 and 79).
75
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Sustainability performance CONTINUED
Water stewardship
The Group’s consumption of water decreased by 2% in 2020 to 818m3 per £m revenue (2019: 836m3). Water use in our
manufacturing operations is dominated by our Owatonna plant (77% of the Group’s 2019 total) where it is used to cool
die-cast zinc components. Significant reductions are anticipated from 2021 as the full impact of a new water recovery and
closed-loop cooling system installed at the plant in December 2020 take effect.
Water sources
Municipal authorities (m3)
Ground water (m3)1
Total water usage (m3)
Water use m3 per £m revenue
1. Two plants (Mexico and Brazil)
2. Restated
2022 Target
502
2020
450,956
17,426
468,382
818
2019
493,369
19,965
513,3342
836
2018
510,973
14,985
525,958
889
2017
464,570
n/a
464,570
889
2016
451,935
n/a
451,935
988
Plans will be developed going forward to conduct a water stress mapping exercise for the Group’s global operations to
help prioritise where future water reduction efforts should be directed.
Waste management
The Group generated 6,990 tonnes of waste in 2020, of which 36% was sent to landfill (2019: 36%) and 64% was
recycled/recovered (2019: 64%). This is the second year that the Group has reported its waste arisings and effort
was focused on improving the quality of our data and setting a zero waste to landfill target for 2026. Hazardous waste
represents a relatively small proportion of the total (8%) comprising materials such as lead contaminated dust from
window renovation, oil contaminated rags, cutting fluids, chemicals and fluorescent light tubes.
Tonnes non-hazardous waste to landfill
Tonnes hazardous waste to landfill
Tonnes non-hazardous diverted from landfill (recycling, incineration, composting etc)
Tonnes hazardous diverted from landfill (recycling, incineration)
Tonnes total waste arising
% total waste to landfill
Intensity ratio: total waste (non-hazardous and hazardous) Tonne per £m revenue
1. Data restated following improvements to data quality.
2026 Target
Zero
2020
2,091
413
4,331
155
6,990
36
12.20
20191
2,301
432
4,744
148
7,625
36
12.42
76
Tyman plcAnnual Report and Accounts 2020 Sustainable culture
We are committed to inspiring,
growing and investing in our people,
building an ethically-led and high-
performing business culture.
Ethics and compliance
The Group believes that high
standards of business ethics make
excellent business sense and are
integral to the development of the
Group’s culture and its future growth.
We seek to maintain a reputation for
fairness in all our business dealings,
and our relationships with authorities,
regulators and our workforce so the
Group’s Code of Conduct underpins all
that we do. Each division is expected
to maintain high standards of integrity
in all their business dealings.
Over the year, and closely aligned
with the Group’s purpose and values
work, the Group took steps to further
strengthen its cultural cohesion by
preparing a comprehensive and
robust business integrity and ethics
programme for launch in 2021. This
programme covers activities that will
educate, examine and enforce ethical
behaviours throughout the Group. Its
design was overseen by the Group’s
first General Counsel & Company
Secretary, who joined the Company at
the end of March.
At the heart of the business integrity
and ethics programme is a new Code
of Business Ethics, which will replace
the existing Code of Conduct. To
ensure that the new Code builds on
the existing cultural strengths of the
divisions, it has been drafted with the
support of the Ethics Steering Group
– a geographically and culturally
diverse cross-functional team drawn
from across the divisions – and has
been shaped by input from group-
wide employee focus groups at the
Group’s Global Leadership Conference
in June 2020.
The Code’s drafting process has
generated a strong sense of shared
ownership across the divisions and,
together with the detailed training
on the Code, the Group’s new cross
divisional network of 'Integrity
Champions' and the development
or refinement of divisional policies,
will provide a strong framework for
how we do business and empower
our colleagues to excel in their work.
All of the Group’s employees shall be
required to sign up to the new Code
after the completion of their training.
Speak up
The Board is advised by the General
Counsel & Company Secretary in
exercising its oversight over the
development, implementation and
effectiveness of the Code in relation
to ethical behaviour.
The Group sees the freedom to
raise concerns as a core component
of a high-performing, sustainable
and ethical business culture where
employees are confident that they will
be supported to 'do the right thing'.
Therefore, in line with established
best practice, the Group continues to
operate confidential whistleblowing
helplines through external operators,
which are available to all employees
and our business partners. Thirteen
'Speaking up' reports were raised in
2020 (2019: 27). Each allegation was
independently investigated, and the
findings of each investigation and any
corrective action taken are reported
to the Board.
Our people
Training and development
Training and development
programmes across the Group
prioritised health protection measures
during the COVID-19 pandemic,
on-going safety compliance training
and the deployment of the Group’s
safety leadership programme (see
pages 68 to 69). The number of
hours of COVID-19 and other safety-
related training recorded during
the year was 23,656 (2019: 7,850).
Talent assessment training was also
rolled out to all our facilities in North
America to prepare the way for
succession planning. In support of
the Group’s values and growing our
talent, a talent excellence roadmap
will be developed in 2021.
The pandemic also impacted our
apprenticeship programmes,
suspending those in place in Brazil
and delaying the introduction of
new programmes in Italy and the
UK. Apprenticeship programmes will
be resumed in Budrio and Newton
Aycliffe in 2021 to complement those
on-going at Wolverhampton and Ware
in the UK and at a number of plants in
the US.
77
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Sustainability performance CONTINUED
Diversity and inclusion
To support our growth, we draw on
the skills, experiences and insights
of a diverse workforce. Tyman’s
employment policies and practices
require that an individual’s skills,
experience and talent are the sole
determinants in recruitment and
career development rather than
age, beliefs, disability, ethnic origin,
gender, marital status, religion
and sexual orientation. The Group
is committed to supporting
employment opportunities and non-
discrimination, and complies with
relevant local legislation and accepted
employment practices.
As at 31 December 2020, the Board
had female representation of 50%
(2019: 50%). Female representation
at senior management level across
the Group was 30% with 54 managers
(2019: 30%). Across the global
workforce, 1,683 workers were
female, representing 41% of our total
headcount (2019: 39%).
Employee engagement
All locations carry out
communications programmes to
engage their employees around
important topics including expected
behaviours and business updates.
Traditional employee communication
methods include town hall meetings,
team briefings, noticeboards, training
sessions, newsletters, Works Council
meetings, employee engagement
focus groups, skip-level meetings and
employee recognition events.
The COVID-19 pandemic accelerated
a re-think on how we communicate
across the Group and like many
companies, we moved a lot of
engagement online through video
conferencing and webinars, including
the Group’s senior leadership
conference, safety leadership
programme and focus groups to
develop the Group’s purpose and
values. Video messages were a
particularly effective way of staying
connected with a disperse workforce
including those working from home.
We started the year with the Group’s
first CEO-led video message,
introducing employees to the
Executive Committee and through
the 'Your Voice Matters' campaign
encouraged them to share their
thoughts on what was good about
working at the company and where
we could improve. This was followed
up later in the year with two separate
values surveys (before and after the
first lockdowns), where all employees
were asked what type of company
they wanted to work for and how this
78
should be reflected in the behaviours
that will guide the Group’s purpose.
In the first survey, we had a response
rate of 77% and received a Net
Promoter Score of +16 (measured
-100 to +100). In the second survey,
we asked employees how we were
doing in controlling the spread of the
virus. Our response rate was 66% and
84% of respondents agreed that the
company has put the right measures
in place to protect our people.
Pamela Bingham, in her role as
Non-executive Director and Board
member responsible for employee
engagement, continued meeting
employees at all levels in the business
to understand local challenges,
identify best practices and promote a
direct link to the board. Nine virtual
meetings were held during the year
with cross functional representatives
from sites in Italy, the UK and the US
(2019: nine).
28% of our employees belong to
a recognised trade union (2019:
24% restated). In addition to trade
union representation, a number of
Works Councils exist where required
by legislation, together with other
employee consultation groups
including safety committees. The
Group continues to have positive
and constructive relationships with
our trade unions that collectively
represent our employees. This was
brought into focus during constructive
consultation in developing COVID-19
controls in our Italian plants.
Our communities
The management of community
programmes is undertaken locally,
with each business focusing on
those causes and relationships
important to them. Examples have
included donations to food banks
and educational supplies to schools,
fundraising for emergency relief,
medical research, work placements
for the unemployed and contributions
to other charitable organisations. The
COVID-19 pandemic impacted our
fundraising efforts during the year,
reducing the Group’s total community
investment to £68,384 (2019:
£74,640).
Community Investment 2020:
£68,384
Company cash donation to charity
£43,367
Employee cash donation to charity
£20,930
Value of staff time volunteered in
company hours £3,203
In-kind contributions to local
communities £884
Tyman plcAnnual Report and Accounts 2020 Sustainable solutions
We estimate that
17%
of 2020 revenues positively
contribute to the UN SDGs
Developing more sustainable
products will contribute to
business growth
In 2020, we estimate that 17% of the
Group’s revenues were through more
sustainable products and services.
Going forward, we have set ourselves
the ambition of increasing year-on-
year our revenues from products that
have demonstrable sustainability
benefits versus one or more of the UN
SDGs. See page 28 for further detail
on how we break down our product
contribution against the goals.
2020 Sustainable Product
Revenues (£98m)
Crime reduction
22%
Energy saving
52%
Fire protection
12%
Hurricane
protection 1%
Inclusive living
3%
Health and safety
protection 10%
Reducing crime to makes cities,
safer, resilient and sustainable
Anti-social and criminal behaviour is a concern for many residents living
on community housing estates. Our high security locks and other security
products fitted to windows and doors meet high performance standards
recognised by the Secured by Design (SBD) national police crime reduction
initiative in the UK and are proven to reduce neighbourhood crime rates.
A study of 1,520 properties on two Nottingham City Homes estates in
2010 and 2012-13 showed that SBD accredited windows reduced burglaries
by 58% over a two-year period following the installation of replacement
windows with high security locks versus pre-installation. This reduction in
crime was achieved despite a slight rise in burglaries in non-Nottingham
City Homes properties on the same estates that did not have their
windows replaced.
Q-Lon seals reduce energy
losses from windows and doors
Seals minimise the energy loss through the gap between the window/door
and the frame. Independent tests of Q-Lon (to EN12667:2001), demonstrate
that this seal has a lower thermal conductivity than standard seal types and
combined with its long-life, provides the optimum level of energy saving in a
window or door. The thermal conductivity (U-value) of Q-Lon is 0.04 W/m2K
versus a standard EPDM seal at 0.25 W/m2K, making it a better insulation
product. The lower the value, the less heat is lost through the seal leading to
lower CO2 emissions from less wasted energy.
Hurricane protection products help
communities adapt to climate change
Our Type S and NB steel and aluminium roof hatches are specifically
designed and tested to withstand the most severe weather conditions,
including hurricanes, typhoons and high winds. These products are required
to withstand a sequence of demanding laboratory tests to gain Miami-Dade
County’s Notice of Acceptance (NOA). Tests include a uniform static air
pressure test per TAS 202, the TAS 201 impact test, and the TAS 203 wind-
pressure loading test.
The Group has commenced work to
develop more sustainable packaging
solutions through optimisation to
reduce the amount of packaging
used, moving to more sustainable/
renewable/fully recyclable packaging
and avoiding single use plastic
packaging where possible. Where
single use plastic is unavoidable we
will look to source plastics with the
highest levels of recycled content and
which can be recycled or composted
via arrangements that are widely
available.
Following a successful trial in
2020, our Access360 business has
eliminated the use of polystyrene
packaging inserts by switching to
a starch-impregnated cardboard
alternative. Polystyrene is not only
environmentally problematic, it is
extremely flammable and costly
versus the new solution. Our Zoo
hardware distribution business has
also eliminated the use of plastic
bubble wrap by shredding cardboard
waste on site and re-using it as filler.
This has reduced cardboard recycling
and bubble wrap costs by £10,000 per
annum.
Product integrity
The Group values its relationships
with its customers and suppliers and
seeks honesty and fairness in all its
dealings with them. The Group aims
to supply and procure goods and
services efficiently, in accordance
with specifications and compliance
with applicable regulations,
without compromising quality and
performance. To achieve such aims,
the Group welcomes transparent
dialogue with its customers and
suppliers in respect of any quality or
performance issues.
Each division is responsible for
negotiating the terms and conditions
of trade with its suppliers. We require
all our suppliers to adhere to our
Code of Conduct or a comparable set
of principles of business conduct and
we reserve the right to terminate
a business relationship and take
appropriate action against any
supplier that breaches any part of our
code.
Operating units are encouraged to
gain and maintain accreditation to
specific standards required by the
markets they serve, with quality and
production accreditations gained
throughout the Group’s operations.
For example, 94% of our revenues are
derived from facilities with ISO 9000
certification for quality (2019: 74%).
The Strategic Report has been
approved by the Board and signed on
its behalf by
Peter Ho
General Counsel &
Company Secretary
4 March 2021
79
Annual Report and Accounts 2020Tyman plcSTRATEGIC REPORT Board of directors
Nicky Hartery
Non-executive Chairman
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Pamela Bingham
Non-executive Director
Helen Clatworthy
Non-executive Director
Paul Withers
Non-executive Director
N
R
Appointment to the Board
Nicky Hartery was appointed to the
Board as a Non-executive Director on
1 October 2020 and as Chair of the
Board and Chair of the Nominations
Committee on 1 December 2020.
Skills and qualifications
Nicky is a Chartered Engineer with
an electrical engineering degree
from University College Cork and an
MBA from the University of Galway.
He has extensive operational and
general management experience
gained in international manufacturing
companies, which he later leveraged
to setup a Lean Six Sigma business
transformation consultancy,
Prodigium. He has strong experience
of North American markets, both
as an Executive and Non-executive
Director.
Relevant past experience
From 2012 to 2019, Nicky was the
Chair of CRH plc, the global building
materials FTSE 100 company, and has
also been a Non-executive Director of
Eircom Ltd. Nicky spent his executive
career at General Electric, Verbatim /
Eastman Kodak and Dell Inc, including
being based in the US for ten years.
External appointments
Nicky is currently Chair of the
Musgrave Group, a Non-executive
Director of Finning International Inc
and Chair of Horse Racing Ireland.
Appointment to the Board
Jo joined Tyman on 1 March 2019 and
was appointed Chief Executive Officer
with effect from 1 April 2019.
Appointment to the Board
Jason joined Tyman on 29 April 2019
and was appointed Chief Financial
Officer on 9 May 2019.
Skills and qualifications
Jo is a Chartered Engineer with
an engineering degree from the
University of Cambridge and an MBA
from INSEAD. She has extensive
international management experience
focused on business transformation
through organic and acquisitive
growth in the global industrial and
consumer sectors, achieved through
establishing and leading strategic
clarity and execution.
Relevant past experience
Jo was previously Business Group
Director for Spectris plc, where she
had responsibility for a portfolio
of global industrial technology
businesses. Prior to this, Jo led the
Invensys heating controls business. Jo
has also held senior commercial roles
with the Bosch Group in the UK and
Germany and ten years with Procter
& Gamble in Germany, the USA and
Asia.
Jo is a former Non-executive Director
of Norcros plc.
External appointments
None.
Skills and qualifications
Jason is a Chartered Accountant and
has a degree in Economics from the
University of Manchester. His career
in international manufacturing-
based businesses includes significant
experience of commercial finance,
M&A, investor relations and tax and
treasury functions.
Relevant past experience
Jason was formerly Interim Group
Chief Financial Officer of Nomad
Foods Limited, the UK-headquartered,
NYSE-listed frozen foods group.
Prior to this, he was Group Finance
Director for the Iglo Group, leading
the business through its €2.6bn
acquisition by Nomad Foods and
subsequent €0.7bn acquisition of
the Findus Group. Jason has also
held senior finance and commercial
positions with Mondelēz (Kraft),
Plum Baby and Cadbury plc, based
variously in the UK, Belgium, Poland,
Russia and Turkey. His early career
included roles with Diageo plc, Tetley
Group and KPMG.
External appointments
None.
A
N
R
A
N
R
A
N
R
Appointment to the Board
Appointment to the Board
Appointment to the Board
Pamela Bingham was appointed
Helen Clatworthy was appointed to
Paul Withers was appointed to the
to the Board in January 2018 as a
the Board in January 2017 as a Non-
Board as a Non-executive Director
Non-executive Director. She is the
executive Director. She was appointed
in February 2020 and as Chair of the
Non-executive Director responsible
Chair of the Audit and Risk Committee
Remuneration Committee and Senior
for employee engagement across the
in May 2017.
Independent Director from April 2020.
Group.
Skills and qualifications
Skills and qualifications
Skills and qualifications
Helen is a Fellow of the Chartered
Paul qualified as a Mechanical
Pamela has a law degree from the
Institute of Management Accountants
Engineer, is a Sloan Fellow of
University of Edinburgh and holds an
and has significant operational and
the London Business School and
MBA from Warwick Business School.
corporate experience particularly
holds a DPhil in Mathematics
She practised as a solicitor before
in cost management, acquisition
from Oxford University. He has
moving into general management.
integration, information technology
extensive experience in international
Pamela has a proven track record
and change management.
as a commercial leader, focusing on
strategic direction and leading cross-
cultural teams to deliver growth and
business expansion. She has worked
in the engineering, mining, renewable
energy and oil and gas sectors.
Relevant past experience
Helen is a former member of the
executive committee of Imperial
Brands plc, where, as Business
Transformation Director, she led
Paul’s executive career was spent at
integration activities for Imperial’s
BPB plc, the international building
Relevant past experience
enlarged US business and a group-
materials business where he was
Pamela was most recently Managing
wide strategic cost optimisation
Group Managing Director.
Director of Weir Minerals Europe. She
programme. Helen held a number
previously held senior management
of other senior roles at Imperial
roles with Rotork plc, David Brown
including Finance Director for Western
Group Ltd and CSE-Servelec Ltd.
Europe and Group Supply Chain
Director.
Paul is a former Non-executive Director
of Premier Farnell plc, Hyder Consulting
plc and Keller Group plc, and he was
Senior Independent Director and Chair
of the Remuneration Committee for
manufacturing businesses and, in
particular, strong knowledge of US
markets, both as an Executive and
Non-executive Director.
Relevant past experience
External appointments
Devro plc.
Helen is Chair of the Imperial Tobacco
Pension Fund.
External appointments
None.
Her early career was spent as in-
house counsel for English Welsh
and Scottish Railway Ltd and for the
Yorkshire Building Society.
External appointments
Pamela is currently Managing
Director, Infrastructure Products
Group, Europe & Australia, at CRH.
Committee membership key
A Audit and Risk Committee
N Nominations Committee
R Remuneration Committee
Committee chair
80
Tyman plcAnnual Report and Accounts 2020
Nicky Hartery
Jo Hallas
Non-executive Chairman
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Pamela Bingham
Non-executive Director
Helen Clatworthy
Non-executive Director
Paul Withers
Non-executive Director
N
R
A
N
R
A
N
R
A
N
R
Appointment to the Board
Appointment to the Board
Appointment to the Board
Nicky Hartery was appointed to the
Jo joined Tyman on 1 March 2019 and
Jason joined Tyman on 29 April 2019
Board as a Non-executive Director on
was appointed Chief Executive Officer
and was appointed Chief Financial
1 October 2020 and as Chair of the
with effect from 1 April 2019.
Officer on 9 May 2019.
Board and Chair of the Nominations
Committee on 1 December 2020.
Skills and qualifications
Skills and qualifications
Jo is a Chartered Engineer with
an engineering degree from the
Skills and qualifications
Jason is a Chartered Accountant and
has a degree in Economics from the
Nicky is a Chartered Engineer with
University of Cambridge and an MBA
University of Manchester. His career
an electrical engineering degree
from INSEAD. She has extensive
in international manufacturing-
from University College Cork and an
international management experience
based businesses includes significant
MBA from the University of Galway.
focused on business transformation
experience of commercial finance,
He has extensive operational and
through organic and acquisitive
M&A, investor relations and tax and
general management experience
growth in the global industrial and
treasury functions.
gained in international manufacturing
consumer sectors, achieved through
companies, which he later leveraged
establishing and leading strategic
to setup a Lean Six Sigma business
clarity and execution.
Relevant past experience
Jason was formerly Interim Group
Chief Financial Officer of Nomad
transformation consultancy,
Prodigium. He has strong experience
of North American markets, both
as an Executive and Non-executive
Director.
Relevant past experience
Foods Limited, the UK-headquartered,
Jo was previously Business Group
NYSE-listed frozen foods group.
Director for Spectris plc, where she
Prior to this, he was Group Finance
had responsibility for a portfolio
Director for the Iglo Group, leading
of global industrial technology
the business through its €2.6bn
Relevant past experience
businesses. Prior to this, Jo led the
acquisition by Nomad Foods and
From 2012 to 2019, Nicky was the
Invensys heating controls business. Jo
subsequent €0.7bn acquisition of
Chair of CRH plc, the global building
has also held senior commercial roles
the Findus Group. Jason has also
materials FTSE 100 company, and has
with the Bosch Group in the UK and
held senior finance and commercial
also been a Non-executive Director of
Germany and ten years with Procter
positions with Mondelēz (Kraft),
Eircom Ltd. Nicky spent his executive
& Gamble in Germany, the USA and
Plum Baby and Cadbury plc, based
career at General Electric, Verbatim /
Asia.
Eastman Kodak and Dell Inc, including
being based in the US for ten years.
External appointments
Nicky is currently Chair of the
Musgrave Group, a Non-executive
Director of Finning International Inc
and Chair of Horse Racing Ireland.
Jo is a former Non-executive Director
of Norcros plc.
External appointments
None.
variously in the UK, Belgium, Poland,
Russia and Turkey. His early career
included roles with Diageo plc, Tetley
Group and KPMG.
External appointments
None.
Appointment to the Board
Pamela Bingham was appointed
to the Board in January 2018 as a
Non-executive Director. She is the
Non-executive Director responsible
for employee engagement across the
Group.
Skills and qualifications
Pamela has a law degree from the
University of Edinburgh and holds an
MBA from Warwick Business School.
She practised as a solicitor before
moving into general management.
Pamela has a proven track record
as a commercial leader, focusing on
strategic direction and leading cross-
cultural teams to deliver growth and
business expansion. She has worked
in the engineering, mining, renewable
energy and oil and gas sectors.
Relevant past experience
Pamela was most recently Managing
Director of Weir Minerals Europe. She
previously held senior management
roles with Rotork plc, David Brown
Group Ltd and CSE-Servelec Ltd.
Her early career was spent as in-
house counsel for English Welsh
and Scottish Railway Ltd and for the
Yorkshire Building Society.
External appointments
Pamela is currently Managing
Director, Infrastructure Products
Group, Europe & Australia, at CRH.
Appointment to the Board
Helen Clatworthy was appointed to
the Board in January 2017 as a Non-
executive Director. She was appointed
Chair of the Audit and Risk Committee
in May 2017.
Appointment to the Board
Paul Withers was appointed to the
Board as a Non-executive Director
in February 2020 and as Chair of the
Remuneration Committee and Senior
Independent Director from April 2020.
Skills and qualifications
Helen is a Fellow of the Chartered
Institute of Management Accountants
and has significant operational and
corporate experience particularly
in cost management, acquisition
integration, information technology
and change management.
Relevant past experience
Helen is a former member of the
executive committee of Imperial
Brands plc, where, as Business
Transformation Director, she led
integration activities for Imperial’s
enlarged US business and a group-
wide strategic cost optimisation
programme. Helen held a number
of other senior roles at Imperial
including Finance Director for Western
Europe and Group Supply Chain
Director.
External appointments
Helen is Chair of the Imperial Tobacco
Pension Fund.
Skills and qualifications
Paul qualified as a Mechanical
Engineer, is a Sloan Fellow of
the London Business School and
holds a DPhil in Mathematics
from Oxford University. He has
extensive experience in international
manufacturing businesses and, in
particular, strong knowledge of US
markets, both as an Executive and
Non-executive Director.
Relevant past experience
Paul’s executive career was spent at
BPB plc, the international building
materials business where he was
Group Managing Director.
Paul is a former Non-executive Director
of Premier Farnell plc, Hyder Consulting
plc and Keller Group plc, and he was
Senior Independent Director and Chair
of the Remuneration Committee for
Devro plc.
External appointments
None.
81
Annual Report and Accounts 2020Tyman plcGOVERNANCE
Chair’s introduction to governance
Engagement with
stakeholders
During my induction into the business,
I was pleased to find that Tyman’s
strong governance framework
incorporates the consideration of its
stakeholders’ needs while supporting
its federated operating structure.
The Group’s strong corporate culture
enabled Senior Management to adapt
quickly to steer the Group through
the evolving challenges of the
pandemic.
For example, throughout the crisis,
the Board received regular reports of
the Group’s financial performance and
scenario modelling as well as reports
of the health and safety measures
that were decisively implemented
to safeguard our employees, their
families and local communities. The
satisfaction of the Group’s employees
with the measures taken was affirmed
through reports to the Board, surveys
and the Workforce Engagement NED,
Pamela Bingham.
We know that our AGM provides our
shareholders with another valuable
opportunity to engage with us. Last
year, we were disappointed that we
had to restrict attendance at our AGM
because of the movement restrictions
in force and our articles of association
did not allow us to organise a virtual
AGM under English law. However, we
will be able to organise a 'hybrid' AGM
under our new articles of association,
which our shareholders approved
last year. Under this format, all
shareholders will be able to vote and
submit questions electronically in
advance and join the AGM online to
hear from me, ask questions of the
Board and vote on our resolutions.
Information on how to participate
digitally, both in advance and on the
day, can be found in the Notice of the
Company's AGM. We look forward to
your participation at the AGM.
Thank you for your support.
Nicky Hartery
Non-executive Chair
4 March 2021
Dear Shareholder
I am delighted to present the
Group’s Corporate Governance
Report for the financial year ended
31 December 2020. This is my first
report since succeeding Martin Towers
as the Chair of Tyman’s Board on
1 December 2020.
The aim of this report is to explain
Tyman’s governance framework
and how it was applied on a day-to-
day basis in the year under review,
with particular emphasis on how we
have applied the 2018 UK Corporate
Governance Code (the Code). More
details on the membership of the
Board and the Board Committees
and the work carried out during the
year may be found in the Audit and
Risk Committee report, Nominations
Committee report and Remuneration
Committee report.
Areas of focus for the Board
The Board values good corporate
governance and recognises the
important role that it plays in
supporting our long-term success and
sustainability.
In 2020, the Board’s focus has been
on safeguarding our colleagues
and communities and servicing our
customers during the pandemic. The
Board quickly embraced the move
to online meetings and met more
frequently than originally scheduled
to enable quick review and response
to the developing situation.
In spite of the pandemic, over the
course of 2020, the Board has also
overseen the continued strengthening
of the Group and the progression of
its strategic growth initiatives. In the
year, this was focused on fostering a
cohesive Group culture to underpin
a federated operating model and
included the steps taken to frame
and launch the Group’s purpose and
values, 'Business Integrity & Ethics
Programme' and 'Sustainability
Roadmap' in 2021.
Directors of the Board had over a
hundred meetings with the Company’s
shareholders and lenders to gain
a better understanding of their
concerns, including their sustainability
objectives and priorities. Through
such meetings, we were able to
incorporate material sustainability
topics into the Group’s 'Sustainability
Roadmap', which can be found on
pages 20 to 29.
Nicky Hartery
Non-Executive Chair
Continuing
to promote
long-term and
sustainable
success
82
Tyman plcAnnual Report and Accounts 2020 Statement of governance
The Board
UK Corporate Governance Code
As a company that is premium-listed
on the London Stock Exchange,
Tyman is required to explain how it
has applied the main principles of the
2018 UK Corporate Governance Code
(the Code), which is available at www.
frc.org.uk, and the Code’s provisions
throughout the financial year.
For the year ended 31 December
2020, and up to the date of this
report, the Company has applied
the main principles of the Code
and has complied with all the
relevant provisions set out in the
Code throughout the period under
review, except in relation to the mis-
alignment of the Chief Executive's
pension payments with the wider
workforce, which is being addressed
through the proposed changes to
the Chief Executive's remuneration,
see page 102. This Governance
and Directors’ report, the Strategic
report, the Sustainability report and
the Remuneration report describe
how the Company has applied the
principles contained in the Code, and
the statements required by sections
7.1 and 7.2 of the Disclosure Guidance
and Transparency Rules.
Role of the Board
The Board is responsible for the
overall leadership, strategy, culture,
development and control of the
Group in order to achieve its strategic
objectives. The Board also ensures
that there is an effective system of
controls to safeguard the Group’s
assets and to enable risks to be
properly assessed and managed.
The Board is the body responsible for
making decisions on all significant
matters, as detailed in the schedule
of matters reserved for the Board,
and is accountable to shareholders
for creating the sustainable long-term
success of the business.
The areas for specific consideration
by the Board include: overseeing
the Group’s values and standards;
approval of the Group’s strategic plan;
ensuring maintenance of a sound
system of internal control and risk
management, including approval of
the Group’s risk appetite statements;
responsibility for the review of
the Group’s corporate governance
arrangements; and ensuring the
Group has the necessary financial
and human resources, processes
and controls to deliver the long-term
strategy of the Group.
Matters not specifically reserved
for the Board, including the day-to-
day management of the Group, are
delegated to the Executive Directors.
Stakeholder engagement
The Board is responsible for engaging
with and understanding the views
of the Group’s key stakeholders.
This includes the need to foster the
Group’s business relationships with
its employees, customers, investors
and societies in the countries that
the Group operates. The Board keeps
engagement mechanisms under
review so that they remain effective.
The Directors take their duties under
section 172 of the Companies Act
2006 very seriously and consider
that they have acted in the way they
consider, in good faith, would promote
the success of the Company for the
benefit of its members as a whole,
having regard to the stakeholders
and matters set out in section 172
(1) (a-f) in the decisions taken during
the year ended 31 December 2020.
The full statement, together with how
Tyman engages with key stakeholders
can be found on pages 64 to 66.
Governance framework
A schedule of Board meeting dates
is set a year in advance, to ensure
the Board meets at regular intervals
throughout the year, at times that
align with the operations of the
different business divisions and the
financial and reporting requirements
of the Group as a whole.
To ensure relevant topics are given
appropriate consideration, the Board
has delegated certain roles to three
principal Committees: Audit and
Risk, Remuneration and Nominations.
Membership of these Committees
is made up of the Non-executive
Directors. The Chair is also a member
of the Nominations and Remuneration
Committees.
The work of these Committees in
2020 is explained in more detail
on pages 89 to 121. Each of the
Committees’ terms of reference may
be found on the Group’s website.
All Directors have access to the
services of the General Counsel
& Company Secretary who is
responsible for ensuring the Group’s
governance framework is observed
and the Board and Committees
receive the necessary support in
fulfilling their responsibilities.
If thought appropriate, Directors
may obtain independent professional
advice in respect of their
responsibilities, at the Company’s
expense. No such advice was sought
in the year.
Board composition
The names and biographical details
of all the current Directors, as at the
date of this report, are set out on
pages 80 to 81 and at the Group’s
website.
The following Directors served during
the year ended 31 December 2020:
Board
member
Nicky Hartery
Jo Hallas
Jason Ashton
Paul Withers
Pamela Bingham
Helen Clatworthy
Martin Towers
Mark Rollins
Appointed to
the Board
October 2020
April 2019
May 2019
February 2020
January 2018
January 2017
December 2009
April 2015
Independence of
Non-executive Directors
Through the work of the Nominations
Committee, the Board has ensured
that its members have an appropriate
mix of skills, diversity of backgrounds,
experiences and relevant industry
experiences such that they can
challenge and support the work
of Executive Directors. Each Non-
executive Director has sufficient
knowledge of the Company, which has
enabled them to discharge their duties
and responsibilities during the year.
As part of the performance
evaluation, the Board reviewed the
independence of the Directors. Having
reviewed the other positions held by
the Non-executive Directors and the
possibility of any potential conflicts
of interest, the Board continues
to consider that each of the Non-
executive Directors is independent,
as defined against the independence
criteria as set out in the Code,
believing each to be independent of
character and judgement.
The Board had specific deliberations
regarding the tenure of the Chair,
Martin Towers, who had served on the
Board for eleven years, and as Chair
for the past four years. In accordance
with Provision 19 of the Code, the
Board requested that he sought re-
election at the 2020 AGM so as to
pursue an orderly transition to a new
Chair following the replacements of
the CEO and CFO in 2019, and the SID
in 2020. Accordingly, Martin was re-
elected with 96.82% of the votes cast
by the Company’s shareholders at the
2020 AGM. Paul Withers led the Chair
recruitment process, which culminated
in the appointment of Nicky Hartery
as Martin’s successor before Martin’s
retirement from the Board.
83
Annual Report and Accounts 2020Tyman plcGOVERNANCE Statement of governance CONTINUED
Director induction
Upon appointment, all new Directors receive a comprehensive and tailored induction programme, providing them with
the opportunity to learn about the operations, making specific site visits and meeting divisional and local management.
Despite the travel and movement restrictions in force this year, Nicky and Paul’s inductions were successfully conducted
online, using a combination of remote meetings, briefing notes and video tours of facilities.
Key responsibilities
Chair
Responsible for the leadership and effective running of the Board and its decision-making processes.
Sponsors and promotes the highest standards of corporate governance.
Sets the Board agenda in consultation with the Chief Executive Officer and the General Counsel &
Company Secretary, ensuring that they are aligned to the Group’s strategic objectives.
Sets the style and tone of Board discussions, facilitating contribution from all Directors.
Leads the Board in determining the strategy and the overall objectives of the Group, while
ensuring that the Board determines the nature and extent of the principal risks associated with
implementing this strategy.
Leads the performance evaluation of the Board and ensures its effectiveness in all aspects of
its role.
Ensures effective communication with the Company’s shareholders and other stakeholders.
Chief Executive
Officer
Responsible for the day-to-day management of the Group.
Promotes the Group’s culture and values.
Leads the Executive team and develops and implements the Group’s strategic objectives, with
assistance from the Executive Committee.
Responsible for sustainability.
Brings matters of particular significance or risk to the Chair for discussion and consideration by
the Board where appropriate.
Chief Financial
Officer
Responsible for the financial reporting and management of the Group, in addition to the finance,
audit, tax and treasury functions.
Responsible for the day-to-day management of all investor relations matters and for contact with
shareholders, as well as with financial analysts.
Responsible for providing the Board with details of feedback received from institutional
shareholders and any key issues raised.
Senior Independent
Director
Is available for shareholders to voice any concerns which may not be appropriate for discussion
through the normal channels of Chair, CEO or CFO.
Provides a sounding board for the Chair and supports him in his leadership of the Board.
Leads the Chair’s performance appraisal by the other Non-executive Directors and serves as an
intermediary for the other Directors with the Chair as necessary.
Non-executive
Directors
Bring complementary skills and experience to the Board.
Constructively challenge the Executive Directors on matters affecting the Group.
Board and Committee attendance
The following table shows the attendance record of the Directors at the scheduled Board and relevant Committee
meetings held during the year.
Board member
Nicky Hartery1
Jo Hallas
Jason Ashton
Paul Withers2
Pamela Bingham
Helen Clatworthy
Martin Towers (Chair)3
Mark Rollins4
Board
3/3
8/8
8/8
7/7
8/8
8/8
7/7
2/2
Audit
–
–
–
4/4
5/5
5/5
–
2/2
Remuneration
1/1
–
–
3/3
4/4
4/4
4/4
2/2
Nominations
1/1
–
–
3/3
3/3
3/3
2/2
1/1
1. Nicky Hartery was appointed as a Non-executive Director on 1 October 2020 and succeeded Martin Towers as Chair of the Board on
1 December 2020. He has attended all meetings since his appointment.
2. Paul Withers was appointed to the Board on 1 February 2020 and has attended all meetings since his appointment.
3. Martin Towers stepped down from the Board on 30 November 2020.
4. Mark Rollins stepped down from the Board on 31 March 2020.
84
Tyman plcAnnual Report and Accounts 2020 Attendance at Board meetings
Eight scheduled Board meetings were held during the year, with one held in SchlegelGiesse’s Budrio site before travel and
movement restrictions came into force. The Board also met on an ad hoc basis on four further occasions to consider the
Group’s responses to the pandemic and other corporate matters. The Board also delegated a number of administrative
and completion matters to a duly-appointed sub-Committee of the Board.
Work of the Board during 2020
The Board’s principal matters during 2020 are summarised below:
Principal matter
Health and
Safety
Strategy and
Sustainability
• Reviewed and debated the health and safety impact of COVID-19 on business operations,
and the measures necessary to manage and mitigate the impact on employees, their
families and communities (see page 70)
• Received details of every health and safety lost time incident, including remedial actions
taken, lessons learned and future preventative measures (see page 68 to 69)
• Oversaw the launch of the Group’s Safety Leadership Programme (see page 68 to 69)
• Reviewed and approved the updated Group strategy (see pages 20 to 30)
• Reviewed and approved the Group’s 'Sustainability Roadmap' (see pages 20 to 29)
• Reviewed and discussed updates on trading performance, markets and strategic initiatives,
including presentations from the Group’s senior management
• Received reports on new product development and launches
• Received reports on the impact of COVID-19 on the Group’s business and oversaw the
business responses to the pandemic (see page 38 and 70)
Governance
• Recruited and inducted a new Chair of the Board and Nominations Committee (see page 80)
• Inducted a new Chair of the Remuneration Committee and Senior Independent Director (see
page 81)
• Conducted an internally-facilitated Board evaluation (see pages 86 to 87)
• Received reports from the Chairs of the Nominations, Audit and Remuneration Committees
Purpose, Values
and Group Culture
• Reviewed and discussed the outcomes of employee surveys on safety, purpose and values,
ethics and overall satisfaction (see page 78)
• Received reports from the General Counsel & Company Secretary on general governance
updates, material legal matters and whistleblowing events
• Received a paper from the General Counsel & Company Secretary on plans to establish a
group-wide Business Integrity & Ethics Programme
• Reviewed and approved the Group’s Modern Slavery Act statement
• Reviewed and approved the reductions applied to the fees and salaries of the Board (see
page 100)
Financial
• Actively monitored trading performance conditions, ongoing scenario modelling and
supported management’s actions in responding to the pandemic (see page 38)
• Approved the amendments to the leverage covenants of the Group’s revolving credit facility
and its USPP notes
• Approved application to confirm eligibility for the UK Government’s COVID-19 Corporate
Financing Facility
• Approved the voluntary repayment of the money received under the UK Government’s Job
Retention Scheme and repayments of foregone salaries to the Group’s employees, excepting
the Executive Directors (see page 112)
• Approved the budget for 2021 and set KPIs (see pages 31 to 33)
• Reviewed and approved the half-year 2020 and full-year 2019 annual results, viability and
going concern statements and the 2020 AGM notice
• Reviewed the Group’s risk register and the effectiveness of the systems of internal control
and risk management (see pages 54 to 60)
Investor
Relations and
Communications
• Received presentations from the Company’s brokers and financial advisors on the
Company’s shareholder profile and market perception
• Received feedback from proxy advisors in respect of the 2020 AGM resolutions
• Received reports and feedback from analysts and shareholders following meetings with
them (see page 66 and 87)
Employee
Engagement
• Visits to sites and discussions with management, conducted in person or remotely (see page
86)
• Reviewed and discussed the outcomes of employee surveys (see page 78)
• Received and discussed reports from the Workforce Engagement NED, Pamela Bingham,
following her skip-level meetings with employees across the divisions (see page 86)
85
Annual Report and Accounts 2020Tyman plcGOVERNANCE Statement of governance CONTINUED
Board visits to the
operations
As part of the Board’s work, the
Directors visit operating units
each year to meet with divisional
management and to see these
businesses first-hand. In 2020, the
Board was able to visit the Budrio site
in person but subsequent movement
restrictions prevented travel to other
sites. The Group adapted by providing
virtual tours of sites for the new Chair
and Senior Independent Director’s
inductions, conducting video
conference calls with senior managers
located at sites and receiving reports
on developments at these sites.
Both the Chief Executive and the
Workforce Engagement NED had
skip-level employee meetings in
2020. For example, before the
onset of movement restrictions, the
Chief Executive met with over 50
managers and supervisors from the
Bilco and AmesburyTruth sites where
they conveyed their passion for the
business, their appreciation for the
intense focus on safety and their
desire to strengthen company culture,
including greater collaboration
across sites.
Later in the year, the Workforce
Engagement NED had separate online
meetings with diverse employees and
employee representatives across the
Group’s UK, Italy and US businesses.
The meetings provided her with
opportunities to better understand
local challenges and practices,
opportunities for improvement and to
promote a direct link into the Board.
Board performance
evaluation
The Board undertakes a formal
evaluation of its performance, and
that of each Director, on an annual
basis. The three principal Committees
of the Board also undertake an annual
evaluation of their effectiveness,
in accordance with their respective
terms of reference.
For the third consecutive year, the
Board participated in an internal
review. An external evaluation was
not considered an appropriate use
of the Company’s funds at this time
because the new Chair was able to
provide an external party’s view when
facilitating the Board evaluation.
The Board plans to undertake an
externally-facilitated review in the
year to 31 December 2021.
86
The key observations, developments
and recommendations arising from
the evaluation are set out below:
• The Directors expressed that
they missed being able to engage
with stakeholders in face-to-
face meetings but feel that they
have otherwise been effective in
operating virtually.
• The Board agreed that the
continual strengthening of the
Group’s risk framework is a
priority.
• The Directors would welcome
opportunities to develop deeper
insight into the Group’s corporate
structure, business and strategy,
and specialist subject areas such
as sustainability, cyber-security
and e-commerce so as to support
more informed debate.
• The Board was pleased with
the continuing evolution of the
Organisation Capability Review and
recent hires, and is supportive of
the plans to continue strengthening
the Group’s talent base.
Board, Committee and
Directors’ evaluation process
1 Questionnaire
A comprehensive questionnaire is
completed by each Director
2 Evaluation
The Company Secretary or an
external facilitator compiles the
results and performs some analysis
3 Discussion
The Chair has one-to-one
discussions with each of the
Directors and provides feedback
4 Action Plan
The Board discusses the consolidated
results and formulates an action plan
Tyman plcAnnual Report and Accounts 2020 As part of the Board evaluation
process, the Chair reviewed the
performance of each Director; these
reviews were followed up with one-
to-one meetings. Following these
reviews, the Chair has confirmed
that the Board and its Committees
continue to operate effectively
and that each of the Directors
has demonstrated their continued
commitment to their roles by the
time spent on Company business
and through their full participation in
Board and Committee meetings.
The Senior Independent Director
would usually lead the other
Directors to carry out a review of
the Chair’s performance. Feedback
from these personal reviews would
then be discussed on a one-to-one
basis with the Chair. Such reviews
would be taken into consideration
when confirming whether the Chair
continues to fully discharge his duties
and demonstrates full commitment to
the role as evidenced by the progress
made in all areas of the Board’s work
and time spent on Company business.
However, as Nicky Hartery has only
been Chair for one Board meeting,
it was not considered appropriate
to evaluate his performance on this
occasion.
Investor relations
programme
The Board is fully committed to
maintaining good communications
with the Company’s shareholders
through its investor relations
programme.
Tyman operates a planned schedule of
communications and investor relations
activities throughout the year. The CEO
and CFO have day-to-day responsibility
for all investor relations matters and
for contact with shareholders, as well
as with financial analysts.
The Group CEO provides the Board
with details of feedback received from
institutional shareholders and any
key issues raised. Regular dialogue
with institutional shareholders and
financial analysts is principally
maintained through:
• meetings and calls involving the
Chief Executive Officer and the
Chief Financial Officer;
• four scheduled releases to the
market of updates on the financial
performance of the Group, and
four additional announcements to
provide further updates during the
pandemic; and
• the Chair regularly engaging with
larger institutional shareholders to
discuss matters including the Board,
strategy, corporate governance and
succession planning.
The Board considered that during this
period of uncertainty caused by the
pandemic, our stakeholders would
benefit from a better understanding
of the actions that were being taken
in response and the Group’s ongoing
performance. To make up for the
prohibition on face-to-face meetings,
the Board significantly increased its
efforts to engage with the Company’s
shareholders and prospective
shareholders: a total of 119 (2019:
66) separate meetings were held
by members of the Board in 2020
with a variety of shareholders and
prospective shareholders (including
institutions, wealth management and
private client brokers), analysts and
equity salesforces. Most of these
meetings were conducted online
because of movement restrictions
under the pandemic.
In addition, the Company actively
engages with individual shareholders
who periodically contact the
Company.
Copies of all announcements and
presentations made at investor events
are published on the Group’s website in
order to ensure that all shareholders,
whether private or institutional, have
equal access to information.
It is currently envisaged that a
similar shareholder engagement
programme will be run during the
2021 financial year.
A table setting out the Company’s
major shareholders can be found on
page 123.
2020 AGM
The Company’s AGM is a key date for
the Board, as it provides the Directors
with the opportunity to meet with
shareholders, private and institutional
investors and the Board welcomes
their participation.
However, to comply with movement
restrictions in the UK in force at
the time, which prohibited public
gatherings of more than two people,
only the Chair and the General
Counsel & Company Secretary
were able to attend the 2020 AGM
in person, in their capacities as
shareholders of the Company. The
Company’s articles in force at the
time did not allow for it to count in
the AGM’s quorum such shareholders
who could only participate remotely.
Nonetheless, the Company provided
shareholders a channel to submit
questions to the Board through a
dedicated form on the website and a
conference call was organised to allow
shareholders to dial-in to the AGM.
To ensure that any incidents similar
to the pandemic do not prevent the
Company’s conduct of an AGM, the
Company proposed (and received
shareholder approval for) new articles
of association that will allow for future
AGMs to be convened in 'hybrid'
formats that allow both physical and
remote participation of Directors and
shareholders.
Access to the Chair and
Non-executive Directors
The Chair and Non-executive
Directors make themselves available
to attend meetings with major
shareholders at their request. The
Chair attended a number of such
meetings during the year to cover
areas such as the Board, strategy,
corporate governance and succession
planning. As face-to-face meetings
were neither practical nor possible
for most of the year, most of the
meetings were conducted online or
over telephone calls.
Internal control and risk
management
The Directors acknowledge that
they are responsible for the Group’s
internal control and risk management
systems and for reviewing their
effectiveness. Details of this review
process are set out in the Audit and
Risk Committee report on pages 92
to 98.
Directors’ insurance cover
The Company maintains, at its
expense, a Directors’ and Officers’
liability insurance policy to afford an
indemnity in certain circumstances
for the benefit of Group personnel
including, as recommended by the
Code, the Directors. This insurance
policy does not provide cover where
the Director or Officer has acted
fraudulently or dishonestly.
87
Annual Report and Accounts 2020Tyman plcGOVERNANCE Statement of governance CONTINUED
The Directors are responsible for
the maintenance and integrity of the
Group’s website. Legislation in the
UK governing the preparation and
dissemination of financial statements
may differ from legislation in other
jurisdictions.
The Directors consider that the Annual
report and Accounts, taken as a whole,
is fair, balanced and understandable
and provides the information
necessary for shareholders to assess
the Group’s and the Company’s
position and performance, business
model and strategy.
Each of the Directors, whose names
and functions are listed in the Annual
report and Accounts, confirms that, to
the best of their knowledge:
• the Company financial statements,
which have been prepared in
accordance with UK GAAP, give a
true and fair view of the assets,
liabilities, financial position and
profit of the Company;
• the Group financial statements,
which have been prepared in
accordance with IFRSs as adopted
by the European Union and
applicable law, give a true and
fair view of the assets, liabilities,
financial position and profit of the
Group; and
• the Directors’ report includes a
fair review of the development
and performance of the business
and the position of the Group and
the Company, together with a
description of the principal risks and
uncertainties that the Group faces.
By order of the Board
Nicky Hartery
Non-Executive Chair
4 March 2021
Directors’ responsibilities
statement
The Directors are responsible for
preparing the Annual report and the
financial statements in accordance
with applicable law and regulation.
English company law requires
the Directors to prepare financial
statements for each financial year.
Accordingly, the Directors have
prepared the Group’s financial
statements in accordance with IFRS
as adopted by the European Union
and the Company financial statements
in accordance with UK GAAP. Under
English company law, the Directors
must not approve the financial
statements unless they are satisfied
that they give a true and fair view
of the state of affairs of the Group
and the Company and of the profit or
loss of the Group and the Company
for that period. In preparing the
financial statements, the Directors
are required to:
• select suitable accounting policies
and then apply them consistently;
• state whether applicable IFRSs
as adopted by the EU have been
followed for the Group financial
statements and United Kingdom
Accounting Standards, comprising
FRS 101, have been followed for
the Company financial statements,
subject to any material departures
disclosed and explained in the
financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group and the Company will
continue in business.
The Directors are also responsible
for safeguarding the assets of the
Group and the Company and hence
for taking reasonable steps for the
prevention and detection of fraud and
other irregularities.
The Directors are responsible for
keeping adequate accounting records
that are sufficient to show and
explain the Group and Company’s
transactions and disclose with
reasonable accuracy at any time the
financial position of the Group and the
Company and enable them to ensure
that the financial statements and
the Directors’ remuneration report
comply with the Companies Act 2006
and, as regards the Group financial
statements, Article 4 of the IAS
Regulation.
88
Tyman plcAnnual Report and Accounts 2020 Nominations Committee report
Nicky Hartery
Chair, Nominations Committee
Ensuring the
appropriate
organisational
capability is in
place to deliver
on the strategic
objectives
3
Meetings held
Board evaluation
The Committee assists the Board
in evaluating the Board’s balance
of skills, diversity, knowledge
and experience. In doing so, the
Committee is responsible for the
identification and nomination of
candidates to fill Board positions,
recommending the reappointment
of Non-executive Directors and the
re-election of Directors. Further
information about the Board and
Committees’ evaluations can be found
on page 86.
The Committee ensures all Board
appointments are made in line with
the Group’s stated employment
policies and practices. These make
provision for equal opportunities
and non-discrimination and aim to
ensure that an individual’s skills,
experience and talent are the sole
determinants in recruitment and
career development.
The full terms of reference for
the Committee can be found at
www.tymanplc.com
Dear Shareholder
I am pleased to present the
Nominations Committee’s report for
the year ended 31 December 2020.
Board changes
The Committee’s main activities
in 2020 were the recruitment and
induction of a new Chair of the Board
and Nominations Committee and the
induction of the new Board Chair and
Dr. Paul Withers, who succeeded Mark
Rollins.
Following a rigorous recruitment
process, I joined the Board as a
Non-executive Director on 1 October
2020 and succeeded Martin Towers as
Chair of the Board and Nominations
Committee on 1 December 2020.
Role of the Committee
The Committee supports the Board
within the Group’s governance
framework by reviewing and making
recommendations to the Board on the
size, structure and composition of the
Board and Committees. In compliance
with the Code, it also ensures that
plans are in place for the orderly
succession to both Board and senior
management positions, including
overseeing the development of a
diverse pipeline for succession that
is appropriate to ensure the Group’s
continued success.
Committee membership
The members of the Nominations Committee during the year ended
31 December 2020 were as follows:
Nominations
Committee member
Nicky Hartery (Chair)1
Paul Withers
Pamela Bingham
Helen Clatworthy
Martin Towers (Chair)2
Mark Rollins
Appointed to
the Committee
October 2020
February 2020
January 2018
January 2017
December 2009
April 2015
Retired from
the Committee
N/A
N/A
N/A
N/A
November 2020
March 2020
1. Nicky Hartery was appointed Chair of the Nominations Committee on 1 December 2020.
2. Martin Towers retired from the Nominations Committee on 30 November 2020.
The Nominations Committee membership includes all of the Non-executive
Directors. All members of the Committee are independent Non-executive
Directors. The Chair was considered independent on appointment. Meetings of
the Committee are attended by the Chief Executive Officer by invitation, when
appropriate.
89
Annual Report and Accounts 2020Tyman plcGOVERNANCE Nominations Committee report CONTINUED
Induction of the new
Non-executive Directors
In 2020, Paul Withers and I joined the
Board as Non-executive Directors.
Both of us received tailored induction
programmes relevant to our skills and
experience and our respective roles
on the Board.
My induction included an overview of
the Group’s operations and activities,
the role of the Board and matters
reserved for its decision, the Group’s
corporate governance practices and
procedures as well as the operating
and financial performance of
the Group.
As movement restrictions have
prevented Paul Withers and
me from travelling to visit the
Group’s operating sites since our
appointment, we have had virtual
tours of key sites across the business.
Via video conference and telephone
calls, we have each also met with
senior management teams across
the business. Each of us has also
met with a range of key institutional
shareholders and advisors of the
Group.
Organisation Capability
Review (OCR)
This is the second year the Group has
performed a structured OCR. The
OCR’s objectives are to:
• identify where there are capability
gaps that need to be addressed to
be able to successfully execute the
Group’s strategic plans;
• identify what organisation
structure changes may be required
to support this;
• assess the Group’s leadership
talent and how this supports
succession plans across the Group;
and
• understand areas of key talent risk
and any mitigation actions that
may be required.
The OCR is undertaken annually as
a key element of the Group’s talent
management programme and will be
used to strengthen the development
of a diverse executive pipeline.
The Committee reviewed the findings
and the recommendations of the OCR
undertaken in 2020. The Committee
also engaged directly with Senior
Management at the Board strategy
meeting on 14 October 2020, which
was conducted online. At that
meeting, the Committee received
strategy updates and updates on
progress against divisional strategic
initiatives from the divisional
leaders. This direct engagement
and exposure is extremely valuable
to the Committee in identifying and
developing the talent pipeline for
senior leadership positions.
Diversity of the Board
The aim of the Committee is to ensure
that the Board is well-balanced and
appropriate for the needs of the
business and the achievement of its
strategy, comprising of Directors
who possess appropriate experiences
and are independent in character
and judgement. Therefore, before
recommending new candidates to the
Board, the Nominations Committee
takes account of the balance of skills,
knowledge, experience, diversity of
background and cultural fit.
Although Tyman is not a member
of the FTSE 350, the Committee is
mindful of the Hampton-Alexander
Review targets in respect of gender
diversity and keeps this under review
when considering appointments to
the Board and is pleased to confirm
continued adherence to these
recommendations. At 31 December
2020, the Board had 50% female
representation.
The Committee is also aware of the
Parker Review’s recommendation
that each board should have at least
one Director from an ethnic minority
background by 2024. In accordance
with our policy on diversity and
inclusion, the Committee will continue
to ensure ethnic and all other aspects
of diversity are considered for each
appointment.
Committee evaluation
The Committee’s performance was
considered as part of the Board
effectiveness review, as outlined
in the Statement of Governance
on page 86. It was concluded
that the Committee had operated
effectively. It was also concluded that
good progress had been made on
furthering the work of the Committee
through the new Organisation
Capability Review described above.
We also reviewed the independence
of our Non-executive Directors and
considered the Board’s diversity and
any potential conflicts of interest.
Key activities of the
Committee in the last
twelve months
The Committee held three formal
meetings during the year to
consider the following:
• The Board succession planning
strategy for Martin Towers,
which led to the search and
selection process for the
new Chair of the Board and
Nominations Committee.
• The search and selection
process for a new Chair of
the Board and Nominations
Committee which culminated
in my appointment being
recommended to the Board.
• The induction of each of the two
Non-executive Directors who
joined the Board in 2020.
• A review of succession work
being undertaken to ensure that
the Group has the appropriate
organisation capability in
place to deliver on its strategic
objectives.
• A review of the Committee’s
terms of reference.
• The review of the Nominations
Committee report for inclusion in
the Annual report and Accounts.
• The performance evaluation of
the Committee.
• The consideration of the
Committee’s priorities for 2021.
New Director appointment
process
Prior to initiating the recruitment
of the new Chair of the Board
and the Nominations Committee,
the Committee, led by the Senior
Independent Director and in discussion
with the Chief Executive Officer,
agreed the required skills, knowledge,
experience and personal attributes
relevant to the Group’s strategy. The
Committee engaged Russell Reynolds,
a signatory to the Voluntary Code of
Conduct for Executive Search firms,
with whom the Group has previously
worked but otherwise has no
connection, to undertake the search.
The Chief Executive and the Senior
Independent Director met with the
shortlist of candidates, after which
the preferred candidates met with the
other members of the Committee.
Following careful consideration
of feedback from interviews and
references that had been taken,
the Committee recommended my
appointment to the Board.
90
Tyman plcAnnual Report and Accounts 2020 Committee priorities
for 2021
The priorities of the Committee for
2021 are set out below:
• The creation of a skills matrix for
the Board.
• Consideration of whether share
ownership guidelines would be
appropriate for the Non-executive
Directors.
• The recruitment of a North
American Non-executive Director
to strengthen the Board’s
geographical diversity.
• Continue to ensure the right
organisation capability is in place
for the Group to deliver on its
strategic priorities, including
reviewing senior management
succession planning and the
strengthening of talent pipelines.
• Oversee the external Board
evaluation process to be
undertaken during 2021.
On behalf of the Nominations
Committee
Nicky Hartery
Chair, Nominations Committee
4 March 2021
91
Annual Report and Accounts 2020Tyman plcGOVERNANCE Audit and Risk Committee report
Dear Shareholder
I am pleased to present an update
on the work of the Audit and Risk
Committee during the year as it
continues to support the Board in
development of the Group’s risk
management framework, as well as
ensuring the integrity and quality
of external financial reporting and
internal controls.
This report sets out the activities
of the Committee during 2020 and
the Committee’s priorities for the
year ahead.
In the last year, changing geo-
political circumstances and the global
impact of COVID-19 have driven
considerable uncertainty. During this
period, the Audit and Risk Committee
has remained focused on the core
aspects of governance within the
Group, including its system of risk
management, internal control and
financial reporting. Recognising
the Committee’s wider remit in
considering non-financial and
emerging risks, in 2020, the Audit
Committee was renamed the 'Audit
and Risk Committee'.
As the Group evolves, it continues
to develop its risk management
systems, internal controls and
approach to assurance. After many
years of outsourcing internal audit
to BDO, a Group Head of Internal
Audit and Risk Management was
appointed during the year, a key
step in enhancing the approach to
group-wide risk management and
developing a risk-based internal
audit function. In addition, a Group
Head of IT was appointed; he will
focus on strengthening the IT control
environment, particularly the Group’s
response to cyber risks. Our General
Counsel & Company Secretary,
who joined the Group at the end of
March 2020, will focus on further
reinforcing our business ethics and
compliance culture. Together, these
changes will significantly enhance the
Group’s control framework.
The main areas of focus for the
Committee in 2021 will be the
continued evolution of the Group’s
risk management processes and
reviewing the risks facing the Group.
In addition, the Committee will focus
on the progress made in establishing
the revised Group internal audit
function and the tender for co-
sourced internal audit services later in
the year.
The Committee will also oversee
and approve the completion of the
external audit tender process during
2021.
Role of the Committee
The Board has delegated
responsibility to the Committee
for the oversight of the Company’s
financial reporting, monitoring the
integrity of the financial statements
and other financial communications
of the Company. It is responsible for
ensuring that effective governance
and appropriate frameworks
are in place for the oversight of
the Company, major subsidiary
undertakings and the Group as a
whole, and for considering whether
accounting policies are appropriate.
The Committee operates under
terms of reference approved by the
Board. These terms of reference have
been reviewed and updated by the
Committee and may be found on the
Group website.
In 2020, the Committee met five
times, with meetings timed to
coincide with key dates in the
financial reporting and audit cycles
of the Company. To provide the
appropriate focus on key priorities, an
annual schedule of Committee activity
is set out a year in advance.
In addition to the Committee
members, the Chair, the Chief
Executive Officer and the Chief
Financial Officer regularly attend
Committee meetings at the invitation
of the Committee Chair. Other
attendees include the Group Financial
Controller and members of the
finance team, senior representatives
from the external auditors, PwC, as
well as BDO and the Group Head of
Internal Audit and Risk Management.
In advance of meetings, the
Committee is provided with reports
from the Chief Financial Officer,
the Group finance function, PwC
and internal audit. These reports
provide the Committee with detailed
information on accounting and
audit matters, and the progress the
Group is making in respect of risk
Helen Clatworthy
Chair, Audit and Risk Committee
Continuing to
enhance risk
management
systems,
internal controls
and approach to
assurance
5
Meetings held
92
Tyman plcAnnual Report and Accounts 2020 management activities and internal
control related matters.
The Committee meets separately
with the external auditors and the
Group Head of Internal Audit and Risk
Management during the course of the
year, without Executive management
being present. The Chair of the
Committee has also met with PwC
outside of Committee meetings to
keep appraised of the year-end audit
process and audit matters in general.
The Committee is authorised to seek
independent advice should it wish to
do so; however, this was not required
during the year.
Committee membership
The members of the Committee
during the year ended 31 December
2020 were as follows:
Committee
member
Helen Clatworthy
(Chair)
Paul Withers1
Pamela Bingham
Mark Rollins2
Appointed to
the Committee
January 2017
February 2020
January 2018
April 2015
1. Paul Withers joined the Board and
Committee on 1 February 2020.
2. Mark Rollins stepped down from the
Board and Committee on 31 March
2020.
All members are independent Non-
executive Directors.
Under provisions of the Code the
Committee should have at least one
member with recent and relevant
financial experience and competence
in accounting and/or auditing, and the
Committee as a whole should have
competence relevant to the sector
in which the Company operates.
The Board considers that Helen
Clatworthy has recent and relevant
financial experience.
Each member of the Committee has
the requisite competence including
significant international, commercial
and operational skills and experience
which are relevant to an international
manufacturer and distributor of
engineered components to the
building industry.
Financial reporting
Key activities of the
Committee in the last
twelve months
• Review of the financial results
for the half-year ended 30 June
2020 and recommendation of
results announcement.
• Review of the financial results
for the full-year ended 31
December 2020, results
announcement, and the Annual
report and Accounts.
• Review of the significant
judgements and estimates that
impact the financial statements.
• Consideration of
appropriateness of accounting
policies.
93
Annual Report and Accounts 2020Tyman plcGOVERNANCE Audit and Risk Committee report CONTINUED
Significant judgements and estimates
The Committee is responsible for monitoring the integrity of the financial statements including significant judgements and
estimates. In undertaking this review, the following significant issues and judgements were discussed with management
and the external auditors:
Area of focus
Audit and Risk Committee review
Conclusions
Carrying value
of goodwill and
intangibles
See note 10 to the Group
financial statements
The Group has goodwill and intangible assets of £446.0 million.
The assessment of the carrying value of intangible assets
involves significant estimates related to drivers of future cash
flows, long-term growth rates and discount rates.
The Committee received a detailed report from management
outlining the valuation methodology, key assumptions used,
headroom, comparison to external market information and
sensitivity analysis.
The Committee was
satisfied that the
methodology and
assumptions used in the
impairment testing were
appropriate and that no
impairment charge was
required.
The Committee discussed the report with management and PwC
and considered whether the key assumptions were appropriate
and the extent to which the valuation was sensitive to changes
in these assumptions. Particular consideration was given to the
additional uncertainty arising from COVID-19 on estimated cash
flows and discount rates in sensitivity analysis.
Going concern and
viability assessment
See note 2 to the Group
financial statements and
pages 61 to 62
The Board is required to satisfy itself that the Company will
continue as a going concern for a period of at least twelve
months from the date of the financial statements. It is also
required to consider the longer-term viability of the Group.
This assessment requires significant estimates in determining
future cash flows and COVID-19 has created additional macro-
economic uncertainty which could affect these cash flows.
In addition to the scenario planning reviewed by the Board
throughout the year, the Committee received a detailed report
from management outlining key assumptions used in the going
concern and viability assessments, and liquidity headroom and
covenant compliance under a base case and severe but plausible
downside scenarios.
The Committee
was satisfied that
assumptions used were
reasonable and it was
appropriate to prepare
the financial statements
on a going concern basis.
It was also satisfied that
the viability statement
was appropriate (see
pages 61 to 62).
Carrying value of
provisions
See note 20 to the Group
financial statements
The Group holds provisions related to restructuring, properties,
warranty claims and tax exposures of £8.9 million. There is
inherent judgement involved in assessing the level of provision
required.
The Committee discussed the key assumptions used in
determining these provisions with management and with PwC to
assure themselves as to the adequacy and appropriateness of
the provisions.
Alternative
performance measures
(APMs) and exceptional
items
The Group uses a number of alternative performance measures
and draws out certain significant, non-recurring items as
exceptional. The selection of APMs and classification of items as
exceptional is judgemental.
Further information on
APMs can be found on
pages 183 to 188 and on
exceptional items in note
6 to the Group financial
statements
The Committee considered the use of these measures as part
of its assessment of whether the Annual report is fair, balanced
and understandable. This included considering whether the
APMs are useful to users and present a faithful representation
of underlying trading, the consistency of APMs used and their
calculation, and the disclosure of reconciliations to GAAP
numbers which were enhanced in the current year.
The Committee received reports from management outlining
details of exceptional items and discussed the appropriateness
of drawing these out with management and PwC. Specific
consideration was given to the classification of the loss on
disposal of the Ventrolla business as exceptional.
The Committee was
satisfied that the
judgements exercised
were appropriate and
that the provisions
were fairly stated in the
annual accounts.
The Committee was
satisfied that APMs are
appropriate and provide
useful information to
users, changes made
to the definitions
were appropriate and
transparent, and these
are clearly reconciled
to the nearest GAAP
number where
appropriate.
The Committee
considered that the items
drawn out as exceptional
were in accordance with
the Group’s accounting
policy and disclosures in
the financial statements
were appropriate.
94
Tyman plcAnnual Report and Accounts 2020 Area of focus
Audit and Risk Committee review
Conclusions
Carrying value of
accounts receivable
See note 14 to the Group
financial statements
IFRS 9 requires the Group to estimate the expected credit
loss on receivables, taking into account past experience and
expectations about future losses. The expected credit loss rates
are a significant estimate made by management.
The Committee reviewed the assumptions used by management
in determining the expected credit loss rates. This included
reviewing the ageing of accounts receivable and historical
write-offs, and considering the current and forecast market
environment in each of the key markets the Group operates in.
Particular consideration was given to the impact of COVID-19 on
expected credit loss risks.
Carrying value of
inventory
See note 13 to the Group
financial statements
Inventories are stated at the lower of cost and net realisable
value, with due allowance for excess, obsolete or slow-moving
items. Management exercises judgement in assessing net
realisable value and provisions required for slow-moving and
obsolete inventory.
Taxation
See note 8 to the Group
financial statements
The Committee considered the basis for the provisions made
by management for obsolete and slow-moving inventory, which
included consideration of the ageing of inventory, assessments
of future demand, market conditions and new product
development initiatives.
Taxation represents a significant cost to Tyman in both cash and
accounting terms. The Group is exposed to differing tax regimes
and risks which affect both the carrying values of tax balances
(including deferred tax) and the resultant income statement
charges. There is an element of judgement in the assessment of
tax provisioning and in the calculation of deferred tax balances
together with the associated probability of crystallisation. The
Committee gave particular focus to developments in respect of
the EU State Aid ruling since this was first made in 2019.
The Committee reviewed reports from management on the
status of the EU investigation and emerging practice regarding
the accounting for the potential liability arising from the ruling.
The Committee also reviewed the tax charge for the half-
year and the full-year, including the underlying tax effect, the
appropriateness of and movement in tax provisions recognised
and the risks associated with them.
The Committee was
satisfied that the
expected credit loss
rates used were
appropriate and the
resultant carrying value
of trade receivables was
reasonable.
The Committee was
satisfied that the
inventory valuation
was consistent with
the Group’s accounting
policy and previous
practice and that the
resultant valuation was
reasonable.
The Committee was
satisfied that the
taxation accounting
and disclosures are
appropriate, and that
no provision is required
in the accounts for the
potential EU State Aid
liability due to the level
of uncertainty over the
amount and timing of
any payment due.
Following discussions with the auditors and considerations set out above, the Committee was satisfied that the financial
statements dealt appropriately with each of the areas of significant judgement. PwC also reported to the Committee on
any misstatements that they had found in the course of their work and confirmed that no material amounts remained
unadjusted.
Fair, balanced, and understandable assessment
In accordance with the Code, the Committee reviewed the Annual report and was able to confirm to the Board that the
Committee considered the Annual report and Accounts, taken as a whole, was fair, balanced and understandable and
provided the information necessary for shareholders to assess the Group’s performance, business model and strategy.
95
Annual Report and Accounts 2020Tyman plcGOVERNANCE Audit and Risk Committee report CONTINUED
Risk and control
Key activities of the
Committee in the last
twelve months
Risk
• Review of the risk
management framework, the
Group’s appetite to
risk and the principal risks
and uncertainties facing the
Group including how those risks
evolved during the year.
• Participation in in-depth risk
management discussions and
received presentations on risk
management.
Going concern and viability
• Review of the going concern and
viability assessments prepared
by management, including key
assumptions.
• Review of the viability statement
and recommendation of
approval to the Board.
Internal control and internal
audit
• Assessed the effectiveness of
internal control.
• Approval of the appointment of
the Group Head of Internal Audit
and Risk Management.
• Review of divisional internal
control representations.
• Approval of the internal audit
plan for the year.
• Review of the internal audit
reports, recommendations and
mitigating plans.
• Assessed effectiveness of
internal audit.
The Group’s assessment of its
principal risks and uncertainties is
set out on pages 54 to 60. The key
elements of risk management and
internal controls are detailed on
page 56 of the risk management
section of this Annual report.
Risk
During the year, the Committee
promoted continuous improvement in
the Group’s risk management system,
which included reviewing the risk
management structure, risk appetite
and principal risks and uncertainties
facing the Group.
In line with the priorities set out in the
2019 Annual report, the Committee
set aside additional time for risk-
based discussions during the year,
including a focus on cyber risks
96
and emerging risks. This included
review of the Group and divisional risk
registers. The Committee monitored
how risks had evolved during the year,
with specific attention being given to
the assessment of emerging risks.
The Committee confirmed to the
Board it had carried out a robust
assessment of the principal risks.
Internal control
The Committee receives regular
reports throughout the year to assure
itself that the Group’s internal control
systems are robust, including reports
from the Chief Financial Officer
and the Group Head of Internal
Audit and Risk Management. The
Committee reviewed the bi-annual
representations of compliance with
the Group’s Accounting Policies
and Procedures and considered the
impact of exceptions noted on the
effectiveness of the Group’s internal
controls. The Group’s policies and
procedures have been reviewed in
the year and areas for enhancement
have been identified. These will be
addressed in 2021 as an integral part
of the Group’s review of the system
of internal control, and as part of
this a more comprehensive controls
self-assessment process will be
developed.
As outlined in the risk management
section of this report on pages 54 to
60, risk management is embedded
in many aspects of the Group’s
leadership model where key areas of
risk are inherently considered.
Key governance mechanisms for
the management of risk include the
Executive Committee, the Finance
Leadership Team, the strategic
planning process, budgeting and
forecasting and the Business
Performance Review (BPR) process.
The BPR process, which is undertaken
every month for each division
is chaired by the Group Chief
Executive and covers key aspects
of strategic, financial, operational
and compliance risks. This includes
proactive monitoring of key actions
from month to month, safety
performance, business ethics, legal
matters, financial performance,
progress on strategic priorities,
organisational developments and risk
watchlist items. The BPR meetings
include a review of organisational
capabilities and twice a year include
a deep dive into divisional risk
management. The key points arising
from this process are then reviewed
by the Board.
The Committee confirms it has
carried out its annual review of the
effectiveness of the system of internal
control as operated throughout the
year ended 31 December 2020 and up
to the date of approval of the Annual
report and Accounts. The Committee
also confirms that no significant
failings or weaknesses were identified
from that review.
Tyman plcAnnual Report and Accounts 2020 Internal audit and internal audit
effectiveness
As outlined in the Committee’s 2019
report, internal audit had been
outsourced to BDO since 2013 and
given the evolution of the Group
over this period, a tender was
planned to ensure the approach
remained appropriate. However,
given the importance of this
function in providing independent
and objective assurance to the Audit
and Risk Committee and the Group’s
commitment to continually improving
its risk management capabilities, in
early 2020 it was decided that the
internal audit function should be
brought ‘in house’.
In August 2020, the Group appointed
an experienced Group Head of
Internal Audit and Risk Management,
who will focus on further developing
and facilitating the Group’s
risk management process and
developing a risk-based internal
audit function. BDO will continue to
provide co-sourced internal audit
services reporting to the Head of
Internal Audit and Risk Management
until completion of the external audit
tender during 2021, at which point a
tender for co-sourced internal audit
services will be undertaken.
BDO (until July 2020) and the Group
Head of Internal Audit and Risk
Management (since his appointment
in August 2020) have attended
every meeting of the Audit and
Risk Committee. They have had
ongoing contact with the Audit and
Risk Committee throughout the
year, including meetings without
management being present. The
Group Head of Internal Audit and
Risk has monthly meetings with the
Chair of the Committee. The Head of
Internal Audit and Risk Management
has had access to the Chair of the
Board.
The 2020 internal audit plan was
completed, albeit the number of
audits was reduced, based on risk,
due to the impact of COVID-19.
Government restrictions and
preserving safety meant internal
audits were conducted remotely in
most cases.
The Committee reviewed the activity
of internal audit throughout the
year, including progress in delivering
the 2020 audit plan, audit reports,
completion of audit recommendations
and approved the 2021 internal
audit plan.
The focus of internal audit in the year
has been on a range of risk areas
and included reviews of key financial
controls, IT general controls, GDPR,
payroll, and business continuity
plans. In addition, internal audit
has maintained a follow up audit
process throughout the year to
assess the completion of previously
raised findings. This process has
complemented the ongoing review
and tracking of recommendations.
The Audit and Risk Committee
reviewed the effectiveness of
internal audit for the financial year
and concluded the function had been
effective in discharging its duties and
resourced appropriately.
Moving into 2021, the Committee
looks forward to supporting the
Group Head of Internal Audit and Risk
Management in further establishing
the Group internal audit function
and moving the risk and assurance
agenda to the next stage in its
development.
External audit
Key activities of the
Committee in the last
twelve months
• Review and approval of PwC’s
terms of engagement and
audit plan, including audit fees,
scope, risk assessment and the
threshold levels of materiality
for the Group financial
statements.
• Consideration of the
independence and objectivity of
PwC.
• Review of PwC’s report following
completion of the audit and the
management representation
letter.
• Review of the effectiveness and
independence of PwC.
• Review and approval of the
policy on the provision of non-
audit services by the external
auditors.
• Recommendation to the Board
of the reappointment of PwC as
auditors at the 2020 AGM.
The Committee is responsible for
managing the relationship with and
the performance of the external
auditors, which includes making
recommendations in respect of the
appointment, reappointment and, if
necessary, removal of the external
auditors.
Appointment of the external
auditors
Following a competitive tender
process, PwC were appointed the
Group’s auditors in December 2011
and have therefore served as the
Group’s auditors since the conclusion
of the 2012 AGM.
Although Tyman is not a FTSE
350 company and is therefore not
required to comply with the provisions
of the CMA Order, the Audit and
Risk Committee considered that it
was desirable for the Company to
follow these recommendations. As
previously reported, the Committee
confirms that it plans to commence
a formal competitive audit tender
process during the financial year
ending December 2021. The
Committee confirms Tyman has
complied with the provisions of the
CMA Order for the financial year
under review.
The Committee confirms there are no
contractual restrictions on the Group
with regard to PwC’s appointment.
Accordingly, the Committee has
recommended to the Board that PwC
should be reappointed as the Group’s
auditors at the 2021 Annual General
Meeting.
External audit effectiveness
A key responsibility of the
Committee is ensuring the continued
effectiveness of the external audit.
Due to the impact of COVID-19 and
personnel changes, no externally
facilitated formal feedback process
was completed in respect of the 2019
audit. The Committee discussed
feedback on the audit process with
Group management and with PwC
during private sessions and was
satisfied there were sound working
relationships between the Group’s
finance teams and the audit team
and that enhanced planning activities
undertaken had continued to improve
the audit process.
Having considered feedback, the
robustness and quality of the work
performed and the contents of
the reports on audit findings the
Committee was satisfied that PwC
continues to provide an effective audit.
97
Annual Report and Accounts 2020Tyman plcGOVERNANCE Audit and Risk Committee
priorities for 2021
The priorities for the Committee for
2021 are set out below:
• Continue to review the
developments of our Group-wide
risk management and internal
control processes, including the
principal and emerging risks facing
the Group, the impact of the
ongoing COVID-19 pandemic, cyber
risk management and emerging
areas of risk management
including those relating to
sustainability, climate change and
the wider environmental, social and
governance (ESG) agenda.
• Monitor and respond to changes in
corporate governance and financial
reporting requirements including
those recommendations made by
BEIS on corporate reform (e.g.
Brydon).
• Oversee the completion of the
external audit tender process.
• Support the Group Head of Internal
Audit and Risk Management
in developing the in-house
internal audit function, including
the adoption of appropriate
professional standards such as
the recommendations of the IIA’s
Code of Practice for Internal Audit
and oversee the internal audit co-
sourcing tender process.
• Ensure focused training on evolving
governance matters, throughout
the year.
The results of the work on these
priorities will be reported in the 2021
Annual report.
On behalf of the Audit and Risk
Committee
Helen Clatworthy
Chair, Audit and Risk Committee
4 March 2021
Audit and Risk Committee report CONTINUED
Auditors’ independence
and objectivity
The Committee recognises the
importance of auditors’ independence
and receives reports from PwC
during the year in respect of their
compliance with the fundamental
principles of objectivity, integrity
and professional behaviour, including
independence. PwC has provided
their annual independence letter to
the Audit ad Risk Committee in March
2021. The Committee reviews the
policy on auditors’ independence and
non-audit services annually and takes
into consideration the nature, scope
and appropriateness of non-audit
services supplied by the external
auditors, while taking into account
that the provision of certain non-
audit services can be most effectively
provided by the Group’s external
auditors.
The policy on auditors’ independence
and non-audit services was reviewed
and approved during the year, with no
significant changes made. The policy
had been updated in November 2019
to reflect the requirements of the
FRC’s revised Ethical Standard which
became applicable on 1 January 2020.
A copy of this policy may be found at
the Group’s website.
The Committee continues to be
satisfied with the external auditors’
independence and objectivity.
Audit and non-audit fees
The Committee regularly reviews
the audit fees to ensure these are
appropriate to enable an effective and
high-quality audit to be conducted.
The fee for the 2020 Group audit is
£0.9 million (2019: £0.8 million). The
increase in the fee is primarily driven
by an increase in audit market rates,
offset by a reduction in the number
of legal entities requiring statutory
audits. Further information in respect
of the audit fee can be found in note 4
to the Group financial statements.
During 2020 non-audit fees paid to PwC
were 6.3% (2019: 5.1%) of the annual
Group audit fee. This work related
entirely to the provision of compliance
or regulation services customarily
performed by external auditors,
including the interim review which is
classed as a non-audit service.
The Committee is satisfied that the
provision of such services does not in
any way prejudice the objectivity and
independence of the external auditors.
Governance and Committee
effectiveness
Key activities of the
Committee in the last
twelve months
• Review of the Committee terms
of reference.
• Reviewed and considered the
Group’s compliance with the UK
Corporate Governance Code as
well as considering potential
developments being considered
by BEIS in relation to the
recommendations made in the
Brydon Report.
• Reviewed compliance with non-
financial reporting practices
and procedures, including
sustainability and stakeholder
engagement.
• Provided oversight to the
Group’s whistleblowing
mechanisms.
Governance
The Committee assessed compliance
with the revised UK Corporate
Governance Code, which included
receiving a report from management
outlining how each of the
requirements of the Code had been
addressed.
The Committee also reviewed the
Group’s non-financial reporting
practices and disclosures and
assessed compliance with the s172
requirements. This included review of
the sustainability report, stakeholder
engagement disclosures, and s172(1)
statement.
The Committee is satisfied that
the Group has complied with the
revised UK Corporate Governance
Code and non-financial reporting
regulations, except in relation to the
misalignment of the Chief Executive's
pension payments with the wider
workforce, which is being addressed
through the proposed changes to the
Chief Executive's remuneration, see
page 102. Developing the Group’s
sustainability and stakeholder
engagement agenda will remain a
focus area for the Group in 2021.
Committee effectiveness
The Committee effectiveness was
included as part of the overall
Board effectiveness evaluation, with
no specific matters noted. A full
Committee effectiveness evaluation
will be completed in 2021.
98
Tyman plcAnnual Report and Accounts 2020 99
Annual Report and Accounts 2020Tyman plcGOVERNANCE The context for
remuneration in 2020
As for many others, the COVID-19
pandemic posed unprecedented
challenges for Tyman in 2020. On
behalf of the Committee, I would like
to add my thanks for the ongoing
commitment and dedication of all
our colleagues to delivering a set of
positive results, while continuing to
take steps to protect our business in
a challenging and uncertain economic
climate.
At the initial stages of the pandemic,
the Group’s immediate focus was
on the safety of our people and
on cash preservation, to ensure
we would be able to withstand
a prolonged period of reduced
trading. The Board supported senior
management’s prompt and wide-
ranging set of actions to ensure the
safety of our colleagues, including:
implementing enhanced hygiene
and social distancing measures
across the Group (and changing shift
patterns to facilitate this), and moving
employees to remote home working
where possible. To support cash
preservation, Tyman elected to use
government employee programmes,
tax relief and other measures as they
became available in our geographies.
As 80% of the Group’s UK workforce
was placed on furlough, the Group’s
senior management and most of the
Group’s global workforce voluntarily
agreed to salary reductions of up to
20%, and the Group cancelled the
2020 Management Bonus Scheme.
At the same time, and to reflect the
wider stakeholder experience, all the
members of the Board voluntarily
agreed to take a 25% reduction to
their fees and base salaries from 1
April 2020 until the Group was able
to restore the salary levels of its
employees.
Dear Shareholder
On behalf of the Board, I am delighted
to present my first report as Chair
of the Company’s Remuneration
Committee for the year ended
31 December 2020, having taken over
from Mark Rollins in March 2020.
This report is set out in three sections:
• this Annual statement, which
summarises the key decisions
made by the Remuneration
Committee during the year and
how they were arrived at;
• our proposed 2021 Remuneration
policy, which reflects changes to
our existing policy and which is
being submitted for approval by
the Company’s shareholders at
the 2021 Annual General Meeting
(AGM); and
• the Annual Report on Directors’
remuneration, which describes
the implementation of our existing
policy in 2020, and how we intend
to implement our proposed 2021
Remuneration policy this year. This
section of the report will be put
to shareholders, for an advisory
vote, at the 2021 AGM (pages 112
to 121).
Changes to the Board and
Remuneration Committee
composition
A number of changes have taken
place in the year:
• Mark Rollins retired from the Board
and Committee on 31 March 2020.
I succeeded Mark Rollins as Senior
Independent Director and Chair of
the Remuneration Committee from
that date.
• Martin Towers retired from the
Board and Committee on 30
November 2020. Martin Towers
was succeeded by Nicky Hartery,
who was first appointed to the
Board and Committee on 1 October
2020 as a Non-executive Director.
Nicky was appointed Chair of the
Board and Chair of the Nominations
Committee from 1 December 2020.
The remuneration arrangements
relating to these role and incumbent
changes are covered in the Annual
report on Directors’ remuneration on
pages 112 to 121.
Remuneration report
Annual statement
Paul Withers
Chair, Remuneration Committee
Delivering
our ambitions
through
appropriate
incentives and
fair rewards
4
Meetings held
100
Tyman plcAnnual Report and Accounts 2020 Incoming Chair
Nicky Hartery was appointed to the
Board as a Non-executive Director on
1 October 2020, with his base fee set
at £49,250, in line with the 2020 Non-
executive Director fee rates applicable
at the time.
As part of this recruitment process,
the Committee also determined
the fee payable to Nicky Hartery
from his appointment as Chair.
The Committee considered the
total remuneration paid for the
position should be commensurate
with the scope, complexities and
international nature of the Chair’s
role, and similar to Chair roles at
companies of comparable scale
to Tyman. As a result, the annual
fee payable to Nicky Hartery from
the commencement of his role as
Chair of the Board and Nominations
Committee was £190,000 per annum.
In evaluating all their decisions,
the members of the Board and the
Committee have been very aware
of, and sensitive to, the experiences
of our stakeholders resulting from
the pandemic. It was in the context
of the cash preservation measures
described above that the Board also
decided that it would be appropriate
to withdraw its recommendation
of a final dividend for the financial
year ended 31 December 2019 and
declined to recommend an interim
dividend for the 2020 financial year.
As the Group’s operations were
gradually allowed to resume from late
April, trading recovered better than
expected. North American orders
were particularly strong, driven
in part by a sharp recovery in the
market, but also reflecting both the
strong turnaround in the business’s
customer standing over the course
of last year and agility demonstrated
through the pandemic. Together with
a recovery in our other markets,
these developments in the second
half of 2020 have resulted in the
Group significantly outperforming its
base case financial models.
Supported by the Group’s strong
trading and high levels of cash
generation at the end of the year,
in December 2020, the Group was
pleased to repay the support that it
received from the UK Government’s
Job Retention Scheme and the
salaries voluntarily forgone by the
Group’s employees (including the
employees of the Group’s divested
Ventrolla business) from the
beginning of April to the end of July.
Adjusted profit before taxation
decreased by 4% and adjusted
earnings per share decreased by 1%
over the prior year to 27.2 pence,
although we experienced strong
recovery in H2 2020, as evidenced by
the Group’s growth of 5% against H2
2019. In keeping with previous years,
the Group’s cash generation was
very strong. Consequently, leverage
at the year-end was 1.1×, which was
significantly better than the prior
year’s 1.7×.
To demonstrate leadership and in
recognition of the financial impact
on the business, the stakeholder
experience and the societal impact
of the pandemic, the Board and the
Executive Directors did not accept
the repayment of the fees and
salaries that they had voluntarily
forgone between the start of April
and the end of July. Furthermore,
although the Executive Directors
demonstrated strong delivery
against their objectives for 2020
in an unprecedented market and
despite many difficult challenges, the
Committee agreed that it would not
be appropriate to reinstate the 2020
bonus.
Performance and reward
in 2020
Full details of the Directors’
remuneration for 2020 are set
out in the Annual report on Directors’
remuneration on pages 112 to 121.
Explanations for some of the key
aspects of 2020 remuneration are as
follows:
2020 annual bonus
In light of the uncertainty brought
about by the pandemic, and as
announced to the market on 3 April
2020, the 2020 management bonus
scheme was cancelled.
Long Term Incentive Plan
The LTIP awarded in 2018 was
subject to a performance condition
of cumulative three-year underlying
EPS of between 92.00 pence (25%
vesting) and 109.00 pence (100%
vesting). In addition, for the Executive
Directors the award was subject
to discretionary underpins based
on three-year relative TSR and
2020 ROCE. The actual cumulative
underlying EPS outcome for the
three years, 2018 to 2020, was 82.36
pence, which was below threshold.
Consequently, the 2018 LTIP (in which
neither Jo Hallas nor Jason Ashton
participated) did not vest.
101
Annual Report and Accounts 2020Tyman plcGOVERNANCE Remuneration report CONTINUED
Annual statement
Proposed revisions to Remuneration Policy
Context
Since her appointment (on broadly
similar terms with the outgoing
CEO, consistent with our policy
on recruitment), Jo Hallas has
demonstrated an impressive
performance track record. As well as
handling the legacy issues in North
America and the unprecedented
challenges created by the pandemic,
Jo Hallas has at the same time
initiated a significant Group
realignment and started delivering
against our ambitious growth
strategy. In light of Jo Hallas’ ongoing
strong performance, the Committee
now believes that an adjustment to Jo
Hallas’ package is appropriate to align
her total remuneration opportunity
more closely with levels for CEOs
of companies of similar scale and
complexity to Tyman today.
The Committee – and wider Board
– is mindful that these proposals
follow a challenging year for Tyman’s
stakeholders as well as society more
generally and, as reported above, this
important context has underpinned
the Committee’s decision-making
throughout 2020. However, Tyman
continues to deliver against its
strategy, and the Committee is
keen to ensure that the Executive
Directors – the CEO in particular – are
appropriately incentivised and fairly
rewarded for delivering our short- and
longer-term ambitions, and leading
the Group through the next stage of
its growth. Against this backdrop, the
Remuneration Committee is therefore
proposing a number of changes to
the Remuneration Policy for 2021. We
consulted shareholders representing
c.75% of issued share capital in early
2021. On behalf of the Committee,
I would like to thank shareholders
for their time and valuable feedback
during this process, and the strong
support expressed for these proposals.
Summary of proposals
Element
Annual bonus
Summary of changes
Policy: limit increased from 125% to 150% of salary. No other changes.
2021 implementation: it is proposed that the CEO’s annual bonus opportunity be increased to
150% of salary (CFO: unchanged at 125% of salary). The bonus will continue to be based 70% on
adjusted profit before tax and 30% on cash generation. 50% of any bonus earned will be deferred in
Tyman shares for three years.
Policy: normal maximum opportunity increased from 125% to 150% of salary.
Exceptional award limit of 200% of salary removed. No other changes.
2021 implementation: it is proposed to increase the CEO’s annual LTIP opportunity from 125%
to 150% of salary (CFO: unchanged at 125% of salary). 2021 LTIP awards to be based on: EPS
(weighted 40%), ROCE (25%), Relative TSR (20%) and ESG (15%).
Policy: no change, except for clarification of proposed implementation (see below).
2021 implementation: no change.
2022 implementation: the CEO’s pension contribution will be reduced to 7% of salary (in line with
the CFO and majority of the wider workforce), with effect from 1 January 2022.
Policy: no change.
2021 implementation: it is proposed to increase the CEO’s salary by 4.5% (in line with other high
performers across the Group) to £477,500 p.a., with effect from 1 January 2021. The Committee
awarded Jason Ashton an increase of 1.5% (to £330,890 p.a.), in line with the average increases for
the Group’s UK, USA and Europe-based employees.
2022 implementation: subject to continued good performance of the Company and the CEO, it is
proposed to increase her salary to £550,000 p.a. with effect from 1 January 2022.
LTIP
Pension
Salary
102
Tyman plcAnnual Report and Accounts 2020 Closing remarks
The Committee is grateful for the
strong levels of shareholder support
it has received for remuneration-
related resolutions in recent years,
most recently when the Policy was
submitted for approval at the 2020
AGM. We hope that our decision-
making in the truly unprecedented
year of 2020, together with our
proposals for 2021 and beyond,
demonstrate a balanced and mindful
approach to executive remuneration
that is at the same time fair,
proportionate and closely aligned with
the interests of all stakeholders.
The Committee looks forward to
your continued support at the 2021
AGM, where I will be happy to answer
questions or receive feedback on any
aspect of the Group’s remuneration.
Paul Withers
Chair, Remuneration Committee
4 March 2021
Further background to some of these
proposals is set out below:
Incentive opportunities
By design, a significant proportion
of Tyman Executive Director
remuneration is variable, with
outcomes linked to stretching short-
and long-term performance targets.
Both the annual bonus and LTIP
also provide strong alignment with
shareholders: 50% of any annual
bonus earned is deferred in Tyman
shares for three years, whilst the
LTIP is denominated in shares that
vest only after three years and are
thereafter subject to a mandatory
2-year holding period.
Our proposal to increase the CEO’s
annual bonus and LTIP opportunities
reflects the Committee’s continued
belief that a significant proportion
of executive remuneration should be
at-risk and linked to the successful
delivery of our growth strategy.
Paired with the proposed two-stage
increase in salary, the Committee
considers that the revised CEO
package will be competitive, but
not excessive, when compared
to companies of similar size,
internationality and complexity to
Tyman. Removal of the exceptional
award limit reflects prevailing market
practice.
The LTIP rules will be amended to
accommodate the proposed changes
to Policy set out above, and subject to
a separate binding resolution at the
2021 AGM.
LTIP measures
During its review of Policy, the
Committee also reviewed the LTIP
framework and concluded that it
would be appropriate to introduce
ESG and Relative TSR alongside the
existing measures of ROCE and EPS
growth. The Committee believes this
scorecard maintains an appropriate
balance between growth and returns
(but with returns split between ROCE
and Relative TSR), while introducing
ESG reflects Tyman’s strategic focus
on delivering performance responsibly
and sustainably.
ESG measures have been selected
(and targets set) to measure progress
against defined, ambitious, long-term
targets linked to our sustainability
agenda. Relative TSR, which is
currently used as an underpin to the
LTIP, will be measured over the 3-year
performance period and reward
above-median TSR relative to the
FTSE250 Index (excluding investment
trusts). Further details of the
performance measures and targets
are set out on page 114 of the Annual
report on remuneration.
Fixed Pay
In light of ongoing strong
performance in the role, the
Committee now believes that an
adjustment to Jo Hallas’ salary
is appropriate to align her total
remuneration more closely with
comparable levels for other CEOs
of companies of similar scale and
complexity to Tyman today. However,
the Committee is mindful of the optics
of a large increase in the current
environment and the need to ensure
that any salary progression over
time remains warranted by continued
strong performance. For these
reasons, the Committee proposes to
increase Jo Hallas' salary over the
course of two years, subject to her
performance in role, and weighted to
2022 to reflect the proposed increase
to incentive opportunities for 2021.
Jo Hallas' current pension contribution
of 15% of salary was agreed on
her appointment, in line with our
Policy at that time and prior to the
evolving market focus on aligning
executive pensions with the majority
of employees. The Committee
supports this principle (as evidenced
through our commitment to alignment
for new executive Directors in the
existing policy and the CFO’s pension
contribution rate), and has agreed
with Jo Hallas as part of these
proposals to reduce her contractual
pension contribution to 7% of salary
from 1 January 2022.
103
Annual Report and Accounts 2020Tyman plcGOVERNANCE Remuneration report CONTINUED
Remuneration policy Report
This section sets out the proposed Remuneration policy for Executive and Non-executive Directors that will be put to
shareholders for approval at the forthcoming AGM. If approved by shareholders then this new policy will be effective from
the date of approval until the Group’s 2024 AGM.
The 2018 UK Corporate Governance Code sets out principles against which the Committee should determine the Policy for
executives. A summary of these principles, and how the proposed Policy reflects these, is set out below:
Principle
Clarity
Simplicity
Risk
Predictability
Proportionality
Alignment to
culture
Our approach
We remain committed to transparent Director pay decisions, with the rationale for decisions,
awards and in particular, incentive targets and outcomes, published in detail.
Our Policy consists of fixed remuneration, annual and long-term incentive components only. The
share incentive and bonus schemes were designed with simplicity and shareholder preference in
mind.
The combination of reward for short-term business performance (50% deferred into shares
for three years) and long-term, sustainable earnings performance and returns ensures the
incentives drive the right behaviours for the Group, its shareholders, employees and customers.
Formulaic outcomes produced by the performance conditions can be overridden where, in the
Committee’s opinion, they do not reflect the true performance of the business or individual
Directors’ contributions.
Furthermore, all variable pay awards are subject to malus and clawback provisions.
There are defined threshold and maximum pay scenarios, which we have disclosed on page 111.
There is a clear and direct link between Group performance and individual rewards under the
annual bonus and LTIP. No variable remuneration is payable for performance below a defined
threshold level.
The Remuneration Committee has worked hard to formulate a Policy and incentive plans that
support a performance culture, driving sustainable growth while also rewarding appropriate
short-term business performance, without encouraging excessive risk taking or unsustainable
Company performance.
Financial and non-financial incentive measures reflect and support business strategy. Our
assessment of annual performance considers both what is delivered and how the Executive
Directors have delivered it.
Details of the key revisions proposed to Policy (compared with that approved by shareholders in 2020) are set out in the
Annual Statement, and summarised again below for ease of reference:
• Increase in the maximum annual bonus opportunity under Policy limits, to 150% of salary
• Increase in the normal LTIP award opportunity under Policy limits, to 150% of salary
• Removal of the exceptional LTIP award limit (previously 200% of salary)
• Commitment in our policy on pensions that the Chief Executive’s pension will be aligned with the majority of the wider
workforce (currently 7% of salary) from 1 January 2022
We have also made a minor amendment to our policy on Non-executive Director remuneration, to permit the payment
of a travel allowance to Non-executive Directors for intercontinental travel from the Directors’ home location to attend
Board meetings.
104
Tyman plcAnnual Report and Accounts 2020 Link to strategy
Operation
Maximum
opportunity
Metrics
Base salary
To pay Executive Directors
at a level commensurate
with their contribution
to the Company
and appropriately based
on skill, experience
and performance achieved.
The level of salary paid is
considered appropriate
for motivation and
retention of the calibre
of executive required to
ensure the successful
formation and delivery
of the Group’s strategy
and the management
of its business in the
international environment
in which it operates.
Benefits
To provide a range of
market competitive
benefits to facilitate the
recruitment of high calibre
individuals and encourage
their retention.
While there are no
performance targets
attached to the payment
of salary, Company and
individual performance is
a factor considered in the
salary review process.
Base salary is paid monthly in cash.
The Executive Directors’ salaries
are set having regard to typical
pay levels at companies of a
similar size, internationality
and complexity.
Salaries are normally reviewed
annually and are typically
effective from 1 January each
year. When reviewing salaries,
the Committee considers all
relevant factors including:
• prevailing market and
economic conditions;
• scope and responsibilities
of the role;
• the level of increase for other
roles within the business; and
• Company and
individual performance.
There is no prescribed
maximum salary.
Salary increases will
normally be broadly in
line with the general
annual salary increase
received by Group
employees in the
relevant Director’s
country of residence.
The Committee retains
the discretion to award
larger increases, for
example, to reflect
a change in role,
development and
performance of a
Director or reflect an
increase in complexity
of the Group.
No performance
metrics apply.
No overall maximum
level has been set
since some costs may
change in accordance
with market conditions.
Benefits are reviewed
by the Committee on
an annual basis and
set at an appropriate
market rate.
Executive Directors are eligible
for a range of benefits that
may include:
• life assurance cover;
• critical illness cover;
• private medical and dental cover;
• car allowance; and
• professional tax
and financial advice.
Additional benefits may also be
provided in certain circumstances
which may include relocation and
associated expenses.
Other benefits may be offered
if considered appropriate,
reasonable and necessary by the
Committee and any reasonable
business related expenses can be
reimbursed (including tax thereon if
determined to be a taxable benefit).
Executive Directors are eligible
for other benefits introduced for the
wider workforce on broadly similar
terms.
105
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Remuneration policy Report
Link to strategy
Operation
Pension
To provide a market-
competitive benefit for
retirement, to facilitate
the recruitment of high
calibre individuals and
encourage their retention.
Executive Directors are eligible
to participate in the relevant
pension arrangements offered
by the Group or to receive a
cash salary supplement in lieu
of pension entitlement.
The Committee may amend the
form of any Executive Director’s
pension arrangements in response
to changes in legislation or similar
developments, provided that the
amendment does not materially
increase the cost to the Company of
the pension provision.
Rewards annual performance
against targets set and assessed by
the Committee.
Any bonus payable under the
annual bonus scheme is paid 50%
in cash and 50% in shares deferred
for three years under the DSBP and
is not pensionable.
Dividend equivalents may accrue
on deferred bonus during the
deferral period, at the Committee’s
discretion on vested deferred bonus
shares at the time of vesting.
Three-year recovery and
withholding provisions apply.
The Committee has discretion to
override formulaic outcomes (under
both financial and non-financial
metrics) if deemed appropriate.
Annual bonus
To incentivise and reward
achievement of annual
goals consistent with the
strategic direction of the
business.
To create further
alignment with
shareholders’ interests
via the delivery and
retention of deferred
equity.
Maximum
opportunity
Metrics
The maximum pension
allowance for the
current Chief Executive
is 15% of base salary.
This will be aligned
with the majority of
the wider workforce
with effect from 1
January 2022.
For all other and
any new Executive
Directors, the
maximum pension
contribution/allowance
will be in line with the
majority of the wider
workforce. Currently,
this is 7% of base
salary.
The normal maximum
annual bonus
opportunity for the
Executive Directors is
150% of salary.
No performance
metrics apply.
Performance metrics
are selected annually
based on the objectives
of the business at the
time, with the majority
of the bonus linked to
financial metrics. Annual
financial performance
targets have historically
been focused on profit
and cash generation
metrics.
Performance below
threshold results in zero
payment. Payments
normally rise from
0% to 100% of the
maximum opportunity
for performance between
the threshold and
maximum targets.
106
Tyman plcAnnual Report and Accounts 2020 Link to strategy
Operation
Long Term Incentive Plan
Maximum
opportunity
Metrics
To align the interests
of senior executives to
those of shareholders in
developing the long-term
growth of the business
and execution and
delivery of the Group’s
strategy.
To facilitate share
ownership.
150% of salary.
Consists of awards of shares that
vest subject to the achievement
of performance conditions.
Participation and individual
award levels will be determined
at the discretion of the Committee
and within the approved limits
of the policy.
The Committee reviews the LTIP
performance measures in advance
of each grant to ensure their
ongoing appropriateness and,
where material changes to
performance measures are
proposed, it consults with
shareholders.
Awards made under the LTIP are
non-pensionable and will normally
require Executive Directors to
retain any awards that vest, net
of tax, (whether held as shares
or options) for a minimum of two
further years from the date of
vesting.
Three-year recovery and
withholding provisions apply.
Dividend equivalents may accrue
during the performance period to
the extent that awards vest.
The Committee has discretion to
override formulaic outcomes (under
both financial and non-financial
metrics) if deemed appropriate.
Shareholding requirements
To motivate and reward
the creation of long-term
shareholder value. To
ensure alignment with
shareholders’ interests.
Executive Directors are required
to retain a minimum shareholding
equivalent to 200% of basic salary,
normally to be achieved within five
years of appointment.
Executive Directors are required
to retain at least 50% of shares
vesting (after any disposals
necessary to pay associated tax
charges) or such higher percentage
(as the Committee may determine
in light of the extent to which the
holding requirement has been met)
under both the Deferred Share
Bonus Plan and the LTIP until the
minimum shareholding is reached.
Awards are subject to the
achievement of defined
targets measured over
three financial years,
starting at the beginning
of the financial year in
which the award is made.
In respect of each
performance measure,
performance below
threshold results in zero
vesting. The starting point
for the vesting of each
performance element
will be no higher than
25% of the maximum
opportunity and will rise
in a straight-line basis
to 100% of maximum
opportunity for attainment
of levels of performance
between threshold and
maximum.
Awards will be granted
subject to performance
conditions that measure
the long-term success
of the Company. The
Committee may introduce
or reweight performance
measures so that they
are directly aligned with
the Company’s strategic
objectives for each
performance period.
No performance
metrics apply.
107
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Remuneration Policy Report
Link to strategy
Operation
Post-employment shareholding requirement
Maximum
opportunity
Metrics
No performance metrics
apply.
To further strengthen
alignment with
shareholders’ interests in
the long term.
Executive Directors are required
to retain a minimum number
of shares for two years post-
employment equivalent to the
lower of 100% of basic salary
or the actual shareholding at
the time of departure. This is
enforced by having such shares
deposited in accounts that require
the Company’s approval for their
release. Shares purchased by
Executive Directors and shares
under any buy-out awards are not
included for the purpose of post-
employment shareholding.
Chair and Non-executive Director fees
Aggregate annual fees
to Directors are limited
to £500,000 under the
Company’s Articles of
Association.
No performance
metrics apply.
To attract and retain high
calibre Non-executive
Directors.
Non-executive Director fees are set
by the Board.
Fees are normally reviewed
annually, but not necessarily
increased. Reviews take into
account the time commitment,
responsibilities and fees paid by
companies of a similar size and
complexity.
Fee increases, if applicable, for
Non-executive Directors, take
effect from 1 January.
Additional fees may be paid to
Chairs of Board Committees, to
the Senior Independent Director
and to the Non-executive Director
designated as being responsible for
employee engagement.
If there is a temporary yet material
increase in the time commitments
for Non-executive Directors, the
Board may pay extra fees on a
pro rata basis to recognise the
additional workload.
No eligibility to receive bonuses or
retirement benefits or to participate
in the Group’s long-term incentive
plans or employee share plans.
Any reasonable business related
expenses can be reimbursed
(including tax thereon if determined
to be a taxable benefit).
This may include a travel allowance
to reflect the additional time
commitment of intercontinental
travel required of the Non-
executive Directors, based on their
home location and the location of
the Board meeting.
108
Tyman plcAnnual Report and Accounts 2020 Notes to the Remuneration policy table
1. Recovery and withholding provisions may be applied to LTIP and DSBP awards in the circumstances of a material
misstatement, gross misconduct, or a material misjudgement of the performance of the Company.
2. For the avoidance of doubt, by approval of the policy, authority has been given to the Company to honour any
commitments entered into with current or former Directors that have been disclosed to shareholders in previous
Directors’ remuneration reports. Details of any payments to former Directors, where required by relevant regulations,
will be set out in the Annual report on remuneration as they arise.
3. The Remuneration Committee retains discretion over the operation of certain elements of pay, particularly variable
pay. This includes the overriding discretion to adjust either the annual bonus or LTIP if the formulaic outcome is not
considered to be reflective of Company performance. In addition, the Committee may adjust elements of the plan
including, but not limited to:
• participation;
• the timing of the grant and/or payment;
• the size of an award (up to plan limits) and/or payment;
• discretion relating to the measurement of performance in the event of a change of control;
• determination of a good leaver for incentive plan purposes;
• adjustments required in certain circumstances (e.g. rights issues, corporate restructuring and special dividends);
• in certain circumstances to grant and/or settle bonus or LTIP awards in cash. In practice, this will only be used in
exceptional circumstances for Executive Directors;
• revise any formulaic outcomes of bonus and LTIP awards downwards or upwards in the event that an exceptional
negative or positive event occurs during the bonus year in question. However, in practice, the Committee would not
normally expect to revise any formulaic outcomes upwards; and
• the ability to recognise exceptional events within the existing performance conditions.
4. Annual bonus performance metrics are determined at the start of each year based on the key business priorities for
the year. The majority will be based on clear financial targets that may include, but are not limited to, profit and cash
generation as, when combined, these are often strong indicators of sustainable growth.
5. LTIP performance metrics are determined at the time of grant. Performance measures may include measures
of profitability (such as EPS), measures of capital allocation discipline (such as ROCE), measures linked to other
strategic priorities (such as ESG) and other measures of long-term success (such as relative TSR). These measures
align with the Company’s goal of value creation for shareholders through financial growth and above market returns.
Performance against targets may also be subject to appropriate discretionary underpins.
Executive Directors’ service agreements and exit payment policy
The service agreements of the Executive Directors provide for a notice period of no more than twelve months from either
party. On termination of their contract by Tyman, and during the period of notice, Executive Directors would be eligible to
be paid their salary, pension contributions and other employment benefits (but not annual bonus or grants under long-
term incentive plans) until the earlier of the end of the notice period or the Director obtaining full-time employment, with
an obligation on the part of the Director to mitigate.
Payments will normally be made monthly, although the Committee retains discretion to agree settlement terms.
These may include a pro rata bonus in respect of the period worked by the Executive Director up until the date of
termination. Bonuses in the final year of employment may also be settled in cash. The Committee may pay reasonable
outplacement and legal fees where considered appropriate. The Committee may pay any statutory entitlements or
settle or compromise claims in connection with a termination of employment, where considered in the best interests of
the Company.
Executive Directors who are categorised as ‘good leavers’ by the Committee will generally be eligible to receive
outstanding awards under the Executive Share Plans as they vest in future years. Awards that vest under the LTIP post-
employment will normally be prorated to reflect the fact that the Executive Director was not employed for the entire
period under measurement. For LTIP awards made after the 2014 AGM, the Committee retains discretion to waive the
post-vesting holding period requirement for good leavers depending on circumstances. Similar provisions apply in the
event of a change of control.
In the event that an Executive Director is dismissed for reasons constituting gross misconduct, all unvested awards under
Executive Share Plans lapse and the Committee retains no discretion in this regard.
Non-executive Directors’ letters of appointment and shareholding guidelines
The Chair and Non-executive Directors do not have service agreements but the terms of their appointment, including
the time commitment expected, are recorded in letters of appointment. Non-executive Directors are employed for terms
of three years’ duration, terminable on a month’s notice by the Company or the Director. All Non-executive Directors
are required to undertake that they will submit themselves for re-election at each Annual General Meeting occurring
during their term of office and no Non-executive Director will serve more than three terms of three years without prior
shareholder approval.
Non-executive Directors do not have a minimum shareholding requirement; however, they are expected to acquire and
retain a shareholding in the Group for the duration of their appointment.
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Remuneration Policy Report
Other policies
Recruitment of Executive Directors
The Committee’s general policy on recruitment is that the structure of remuneration for new Executive Directors should
be in line with the Policy in force at that time, with base salary set taking into account a range of factors, including the
salary for the incumbent and the candidate’s relative experience in role. The Committee may agree that the Company will
meet certain relocation and associated expenses of a new Executive Director, subject to circumstances.
For a new Executive Director their annual bonus framework and LTIP awards will be in line with the limits set out in the
Remuneration policy table. Depending on the timing of the appointment, the Committee may deem it appropriate to set
different annual bonus performance conditions to the current Executive Directors for the first year of appointment. An
LTIP award can be made shortly following an appointment (assuming the Company is not in a Closed Period).
Where individuals are promoted to the Board from within the Group, their existing share grants or awards will be allowed
to pay out on their original terms.
In certain circumstances, and in order to secure the services of an outstanding candidate, it may be necessary to make
an award to a new Executive Director to ‘buy out’ unvested performance plan share or cash awards forfeited on leaving
their previous employment. Any such awards would be subject to independent confirmation of the existence, forfeiture
on departure and probability of these historical awards vesting had the new Executive Director remained in post. In
doing so, the Committee will seek to do no more than match the fair value of the awards forfeited, taking account of
performance conditions attached to these awards, the likelihood of those conditions being met and the proportion of the
vesting period remaining. Such awards may be made using existing arrangements or using the flexibility provided by the
Listing Rules to make awards without prior shareholder approval.
Any such awards would be made in cash or in shares in Tyman plc, and may be subject to performance conditions
attached to Tyman.
Appointment of Non-executive Directors
New Non-executive Directors appointed to the Board will be paid in line with the fee rates applicable at that time. The
Committee will review the fee for a new Chairman on appointment, taking into account a range of factors, including the fee
for the incumbent and the candidate’s relative experience in role. All Non-executive Director appointments will be subject
to the same provisions concerning annual re-election and shareholdings as the then current Non-executive Directors.
Policy on external appointments
Executive Directors are allowed to accept external appointments as Non-executive Directors. In respect of quoted
companies, this is limited to one other quoted company, subject to Board approval, provided that these are not with
competing companies and are not likely to lead to conflicts of interest. Executive Directors would normally be allowed to
retain the fees paid from these appointments. Executive Directors may not serve as the Non-executive Chair of another
quoted company.
Other share plans
The Executive Directors may participate in any all-employee share plans on the same basis as other employees in their
country of residence. The maximum level of participation is subject to the limits imposed by HMRC (or a lower cap set by
the Company).
Employment conditions elsewhere in the Group
The Remuneration policy for Executive Directors is consistent with that for other employees save lower levels of incentive
opportunity based on seniority and market norms. All senior management employees of the Group participate in bonus
arrangements, with all permanent UK, US and other international employees eligible to participate in one or more share
schemes. Employees in certain other jurisdictions are also eligible to participate in all-employee share plans. Although
the Committee does not consult directly with employees on the Directors’ remuneration policy, the Committee considers
any feedback gathered by management or the designated NED as well as the general basic salary increase, remuneration
arrangements and employment conditions for the broader employee population when determining remuneration policy for
the Executive Directors.
Consultation with shareholders and shareholder bodies
The Committee is committed to regular engagement with shareholders and governance bodies. In advance of
implementing any material future changes to the Executive Directors’ remuneration, the Committee would normally
engage in consultation with shareholders.
All Committee members attend the Annual General Meeting and may also be contacted through the Group’s registered
office or via email to the Group’s Secretariat (cosec@tymanplc.com) to answer any questions shareholders or shareholder
bodies may have in relation to the Group’s remuneration policy.
110
Tyman plcAnnual Report and Accounts 2020 Illustrative performance scenarios
The table below sets out performance scenarios for each Executive Director, for the financial year 2021, showing an
indication of the level of remuneration that would be received at minimum, on-target and maximum performance.
Chief Executive Officer
Maximum + 50%
share price growth
24.1%
Maximum
28.4%
30.4%
35.8%
45.5%
£2,360
35.8%
£2,002
Target
44.3%
27.9%
27.9%
£1,285
Minimum
100%
£569
0
500
1,000
1,500
2,000
2,500
£’000
Chief Financial Officer
Maximum + 50%
share price growth
26.5%
Maximum
31.1%
29.4%
34.5%
44.1%
£1,407
34.5%
£1,200
Target
47.4%
26.3%
26.3%
£787
Minimum
0
100%
200
£373
400
600
800
£’000
1,000
1,200
1,400
1,600
n Fixed
n Short-term incentives (annual bonus)
n LTIP
The above charts provide an illustration of the proportion of total remuneration made up of each component of the
remuneration and the value of each component. These assumptions are shown for illustration purposes only.
Three scenarios have been
illustrated for each Executive Director:
2021
Minimum performance
On-target performance
Maximum performance
Maximum + 50% share price growth
Fixed remuneration
No annual bonus
No vesting of LTIP awards
Fixed remuneration
50% annual bonus payout (CEO: 75.0% of salary, CFO: 62.5% of salary)
50% of LTIP awards vest (CEO: 75.0% of salary, CFO: 62.5% of salary)
Fixed remuneration
100% annual bonus payout (CEO: 150% of salary, CFO: 125% of salary)
100% of LTIP awards vest (CEO: 150% of salary, CFO: 125% of salary)
Fixed remuneration
100% annual bonus payout (CEO: 150% of salary, CFO: 125% of salary)
100% of LTIP awards vest (CEO: 150% of salary, CFO: 125% of salary)
and 50% share price growth applied to the LTIP award
The fixed pay element is based on the following elements:
• Base salary is the base salary effective for Jo Hallas and Jason Ashton for the year ending 31 December 2021, as set
out on page 119.
• Benefits are the annualised value of benefits paid in the year ended 31 December 2020, as set out in the table of
Directors’ remuneration on page 113.
• Cash contribution in lieu of pension of 15% of base salary for the CEO and 7% for the CFO.
111
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Annual report on Directors’ remuneration
The Annual report on Directors’
remuneration set out below (together
with the Remuneration Committee
Chair’s annual statement) will be put
to a single advisory shareholder vote
at the 2021 AGM. This report sets out
the pay outcomes in respect of the
2020 financial year and explains how
the Committee intends to operate
in 2021 the proposed Remuneration
policy that is being submitted for
binding shareholder approval at the
2021 AGM. The information from the
single figures of total remuneration
for Directors on page 113 to the
end of the section on payments to
past Directors on page 116 has been
audited. The remainder of the Annual
report on Directors’ remuneration is
unaudited.
Role of the Remuneration
Committee
The Remuneration Committee
is responsible for setting and
implementing the Remuneration
policy for the Executive Directors and
the Company’s Chair.
In addition, the Committee considers
the remuneration arrangements for
all senior executives in the Group
and other relevant senior managers.
This ensures a consistent application
of Remuneration policy across the
Group and aligns all senior managers’
remuneration to the Group’s strategic
objectives. Remuneration received
reflects the contribution made by
senior executives to the business,
the performance of the Group, the
size and complexity of the Group’s
operations and the need to attract,
retain and incentivise executives of
the highest quality.
Committee membership
The members of the Committee
during the year ended 31 December
2020 were as follows:
Remuneration
Committee
member
Paul Withers
(Chair)1
Nicky Hartery2
Pamela Bingham
Helen Clatworthy
Mark Rollins
(Chair)3
Martin Towers4
Appointed to
the Committee
February 2020
October 2020
January 2018
January 2017
April 2015
December 2009
1. Paul Withers was appointed to the
Committee when he joined the Board as
a Non-executive Director on 1 February
2020. He succeeded Mark Rollins as
Chair of the Remuneration Committee
and Senior Independent Director on
Mark Rollins’ departure at the end of
March 2020.
2. Nicky Hartery was appointed to the
Committee when he joined the Board as
a Non-executive Director on 1 October
2020. He succeeded Martin Towers as
Chair of the Board and Chair of the
Nominations Committee following Martin
Towers’ retirement from the Board and
Committee on 30 November 2020.
3. Mark Rollins was Chair of the Committee
until his retirement from the Board and
the Committee on 31 March 2020.
4. Martin Towers stepped down from the
Board and Committee on 30 November
2020.
Committee activities during the year
The Committee considered the following matters during the past 12 months:
All members of the Committee are
Independent Non-executive Directors.
The Chief Executive attends meetings
at the invitation of the Committee
Chair. Other individuals such as
external advisers may be invited to
attend all or part of any meeting,
as and when appropriate and
necessary. None of these individuals
were present or participated in any
discussion in respect of their own
remuneration.
The Committee held four meetings
during the year, which were
scheduled to coincide with the
Company’s reporting cycle, including
the approval of the Annual report,
and the management of the Executive
Directors’ remuneration and incentive
plans. There was full attendance at
all meetings, which were conducted
using secure online meeting
technology due to the ongoing
pandemic.
The Committee operates under terms
of reference approved by the Board.
The terms of reference were reviewed
by the Committee during the year to
ensure they: remained relevant for
the aims of the Committee; continued
to meet the requirements of the
business, the Group’s shareholders
and other stakeholders; and reflected
changes in corporate governance best
practice. The terms of reference may
be found on the Group website.
Salaries and fees
• Supported the voluntary reductions made to salaries and fees across the Group, and
the repayment of forgone salaries across the Group for employees who worked between
April and August and the top-up of salaries to 80% for employees on furlough, except for
members of the Board.
• Reviewed and approved the base salaries to be paid to the Executive Directors and senior
managers from 1 January 2021, taking account of pay award trends across the Group.
• Determined the level of bonus payable for 2019 to the Executive Directors and senior
managers.
• Approved the structure of the 2020 bonus for the Executive Directors and senior managers.
• Cancelled the 2020 bonus.
• Approved the proposed participant list, award opportunities and targets for the 2020 LTIP.
• Following the end of the year, reviewed and approved the vesting outcome of the 2018 LTIP.
• Approved the terms of the UK, US, and International Employee Sharesave plans.
• Considered revisions to Policy to ensure it remained fit-for-purpose, appropriately
competitive, and closely aligned with our culture, strategy and stakeholder interests.
• Consulted shareholders representing c.75% of issued share capital before finalising the
proposals.
• Considered and approved the remuneration arrangements for the incoming Chair.
• Ensured the Group complied with gender pay gap and CEO pay ratio reporting requirements.
• Reviewed changes to the Committee’s terms of reference, in line with the Code.
• Assessed the Committee’s performance, and monitored progress against its set objectives.
• Following the end of the year, reviewed and approved this 2020 Annual Remuneration Report.
Bonus
Share plans
Remuneration
Policy
Chair succession
Governance
112
Tyman plcAnnual Report and Accounts 2020 External advisers
At the start of 2020, the Committee was advised by Aon. However, at the end of Q1 2020, the Committee was informed
that Aon intended to cease to offer remuneration advisory services and the Committee therefore conducted a tender to
select a new advisor. Mercer (part of the Marsh & McLennan Group (MMC) of companies) was appointed following a robust
selection process. In addition, Pinsent Masons LLP, who provide the Group with corporate legal services under a separate
contract, provided some advice to the Committee in 2020 on the Group’s share plans.
Following the Committee’s lead advisor moving to Ellason LLP, Ellason was appointed as the independent remuneration
advisor to the Committee effective 1 January 2021.
Total fees for Aon’s advice provided to the Committee during the year were £50,320 (2019: £82,752), excluding VAT.
During the year, Mercer’s total fees provided to the Committee amounted to £6,437, excluding VAT. Neither Aon nor
Mercer provided any other service to the Group during the year, although Marsh, MMC’s commercial insurance broking
arm, provides the Group with insurance broking services under an independent contract. Total fees for Pinsent Masons’
advice provided to the Committee during the year amounted to £3,131.75, excluding VAT.
Aon, Mercer and Ellason are signatories of the Remuneration Consultants Group Code of Conduct and any advice received
is governed by that Code which sets out guidelines to ensure that each of them provides advice that is independent and
free of undue influence.
Remuneration outcomes for 2020
Single figure of total remuneration (audited)
The following table sets out the single figure of total remuneration for Directors for the financial years ended
31 December 2019 and 2020:
Executive Directors
Jo Hallas6
Jason Ashton6
2020
2019
2020
2019
Non-executive Directors
Nicky Hartery8
Paul Withers9
Pamela Bingham
Helen Clatworthy
Martin Towers
Mark Rollins7
Year
ended 31
December
Salary/
fees1
Annual
bonus:
cash2
Annual
bonus:
deferred2
Cash
Payments
in lieu of
pension3 Benefits4
Vested
LTIP
awards
419
334
299
206
24
-
52
-
49
48
56
56
119
138
15
60
-
63
-
39
-
63
-
39
63
50
21
14
20
14
19
13
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Total
remun-
eration
502
1,299
339
310
24
-
52
-
49
48
56
56
119
138
15
60
Other5
-
775
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
fixed
Total
variable
502
398
339
233
24
-
52
-
49
48
56
56
119
138
15
60
-
901
-
78
-
-
-
-
-
-
-
-
-
-
-
-
1. Executive and Non-executive Directors who were in a role from April 2020 to July 2020 volunteered a salary/fees reduction of 25% for
that period as a response to COVID-19. The figures in the table show the reduced basic annual salaries and fees received in 2020.
2. All bonuses for 2020 have been cancelled as agreed by the Board as a response to COVID-19.
3. Jo Hallas and Jason Ashton received cash in lieu of pension amounting to 15% and 7% of earned base salary respectively. The
Executive Directors are not members of any of the Group pension schemes.
4. The benefits provided to the Executive Directors included car allowance, private medical insurance, permanent health insurance and
life assurance. There were no changes to the benefit policies or levels during the year.
5. A conditional share award was granted to Jo Hallas under Listing Rule 9.4.2 on 1 April 2019 to compensate for outstanding LTIP awards
forfeited on leaving her previous employer, vesting in two tranches. The first tranche of the award (156,813 shares) vested on 30 April
2020 at a market price of £1.69031 per share. The second tranche (156,814 shares) is due to vest on 30 April 2021. Vesting is subject
to Jo Hallas’ continued service. The figure shown above reflects the grant date face value of the award. As a share-based award, the
grant is captured under ‘Total Variable’ for the purposes of the final two columns of the table.
6. 2019 remuneration for Jo Hallas reflects the period from her appointment as CEO (with effect from 1 April 2019), and for Jason Ashton
reflects the period from his appointment as CFO (with effect from 9 May 2019).
7. Mark Rollins stepped down from the Board on 31 March 2020.
8. Nicky Hartery was appointed to the Board on 1 October 2020.
9. Paul Withers was appointed to the Board on 1 February 2020.
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Annual report on Directors’ remuneration
Cancellation of the 2020 Group Bonus Plan
As announced to the market on 3 April 2020, the Committee cancelled the Group’s 2020 bonus due to the scale of the
financial impact of the COVID-19 pandemic on the business, our stakeholders and society more generally. No bonuses
were consequently paid to Executive Directors in respect of the 2020 financial year. Notwithstanding this, the Executive
Directors have demonstrated strong delivery against their objectives for 2020 in an unprecedented market and despite
many difficult challenges.
DSBP awards granted during the year
The table below details the deferred shares granted on 11 March 2020 in respect of the 2019 annual bonus award:
Director
Jo Hallas
Jason Ashton
Number
of shares 1
29,740
17,155
Share price–
five-day
average2
£2.352
£2.352
Face
value 3
Vesting
date
£69,950 March 2023
£40,349 March 2023
1. Shares are deferred for three years.
2. Over the five trading days subsequent to the announcement of the full-year results (five trading days ended 11 March 2020).
3. The actual value will be the value at the vesting date and will include dividend equivalents awarded in shares. As disclosed in last
year’s Annual Report, Jo Hallas received an additional £7k in deferred shares in respect of the period between 1 and 31 March 2019,
when she had joined Tyman but before she was appointed as CEO. Similarly, Jason Ashton received just over £1k in respect of the
period from joining Tyman until he was appointed as CFO. These awards are reflected in the table above.
LTIP awards vesting in March 2021
Neither of the current Executive Directors were recipients of LTIP awards granted in 2018 and subject to performance
measured over three years ended 31 December 2020. Details on the adjudication of award interests retained by former
Directors is included under the section ‘Payments to past Directors’.
LTIP awards granted during the financial year
LTIP awards were granted to both Executive Directors on 25 March 2020, with a face value of 125% of salary.
Director
Jo Hallas
Jason Ashton
Award
scheme Date of award
LTIP 25 March 2020
LTIP 25 March 2020
Normal
vesting date 1
March 2023
March 2023
Number of
shares
awarded
Face value
of award
£’000
Share price
– 30-day
Average2
204,353
146,032
556
398
£2.7220
£2.7220
Share
award
receivable
at lower
threshold
51,088
36,508
1. The awards are subject to a two-year holding period after normal vesting.
2. In line with previous years, the Committee used an average share price over the 30 days prior to the announcement of full-year results
to calculate these award levels. Given that the majority of this averaging period pre-dated the market-wide share price fall resulting
from the onset of the pandemic, the Committee considers that there is no need to further adjust for windfall gains. For comparison,
the spot closing share price on 25 March 2020 (the date of grant) was £1.48.
Vesting of the 2020 awards is based on FY22 adjusted EPS and ROCE targets set out below and subject to a discretionary
underpin based on, inter alia, relative TSR over the period 2020–2022. Any awards vesting for performance will be
subject to an additional two-year holding period, during which time clawback provisions will apply.
Performance will be measured against EPS and ROCE targets as set out below:
Measure
Weighting
Targets
FY22 adjusted EPS
50%
0% vesting below 31.33p;
FY22 ROCE
50%
25% vesting at 31.33p;
100% vesting for 38.57p and above;
Straight-line vesting between these points.
0% vesting below 13.0%;
25% vesting at 13.0%;
100% vesting for 14.2% and above;
Straight-line vesting between these points.
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Tyman plcAnnual Report and Accounts 2020
Directors’ interests in shares
The interests of each person who was a Director of the Company as at 31 December 2020 (together with interests held
by his or her connected persons) were:
Director
Owned outright or vested
31
December
2020 1
100,000
161,454
27,351
50,000
3,928
15,000
31
December
2019
–
74,127
19,010
–
3,928
15,000
Nicky Hartery
Jo Hallas
Jason Ashton
Paul Withers
Pamela Bingham
Helen Clatworthy
Shares
Unvested
and not
subject to
performance
conditions
–
186,554
17,155
–
–
–
Unvested
and
subject to
performance
conditions
–
429,391
301,944
–
–
–
Options
Unvested
and not
subject to
performance
conditions
–
10,793
10,793
–
–
–
Vested
but not
exercised
–
–
–
–
–
–
% of
salary
required
(2020)2
% of
salary
achieved 3
2020
guidelines
met?
–
–
–
200% 124% Building
29% Building
200%
–
–
–
–
–
–
–
–
–
1. From 31 December 2020 to 5 March 2021 there were no changes to the above stated holdings.
2. Annualised base salary as at 31 December 2020.
3. Based on the closing price of Tyman plc ordinary shares of £3.50 on 31 December 2020, and Executive Directors’ beneficial
shareholdings at that date.
Directors’ interests in shares under all share plans
(LTIP, share awards issued under Listing Rule 9.4.4(2), DSBP and SAYE) (audited)
Shares over which awards
held at
1 Jan 2020
granted
during the
year
vested
during the
year1
lapsed/
cancelled
during the
year
held at
31 Dec
2020
Exercise
price
Earliest
vesting
date2
Award scheme Award date
Jo Hallas
LTIP
LR 9.4.2(2)
awards3
LR 9.4.2(2)
awards3
LTIP
DSBP
UK ESPP
UK ESPP
Jason Ashton
LTIP
LTIP
DSBP
UK ESPP
UK ESPP
18/03/19
225,038
01/04/19
156,813
–
–
–
156,813
01/04/19
25/03/20
11/03/20
30/09/19
30/09/20
18/03/19
25/03/20
11/03/20
30/09/19
30/09/20
156,814
–
–
4,066
–
155,912
–
–
4,066
–
–
204,353
29,740
–
6,727
–
146,032
17,155
–
6,727
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
225,038
–
156,814
204,353
29,740
4,066
6,727
155,912
146,032
17,155
4,066
6,727
Mar 2022
Apr 2020
Apr 2021
Mar 2023
Mar 2023
Nov 2022
Nov 2023
Mar 2022
Mar 2023
Mar 2023
Nov 2022
Nov 2023
£1.7706
£1.6054
£1.7706
£1.6054
1. LTIPs are subject to a mandatory two-year holding period, upon vesting, after the sale of the necessary number of shares to cover tax
and national insurance payments.
2. All awards lapse ten years from the date of grant.
3. These one-off awards of nil cost options were granted under the exemption to the requirement for prior shareholder approval, to which
Listing Rule 9.4.2(2) applies and were made to facilitate recruitment and to compensate for loss of certain benefits and share awards
from Jo Hallas' previous employment, which were forfeited.
4. Details of qualifying performance conditions in relation to outstanding LTIP awards are summarised below.
March 2019 LTIP
Performance measure
25% (threshold) vesting
100% vesting
Between 25% and 100% vesting
Underpin
March 2020 LTIP
Performance measurement basis
25% (threshold) vesting
100% vesting
Between 25% and 100% vesting
Underpin
EPS (100% of an award)
Cumulative adjusted EPS (2019-2021)
95.0p
112.0p
Straight line sliding scale
Discretionary; relative TSR and ROCE
EPS (50% of an award)
FY22 adjusted EPS
31.33p
38.57p
Straight line sliding scale
Discretionary; relative TSR
ROCE (50% of an award)
FY22 ROCE
13.0%
14.2%
Straight line sliding scale
Discretionary; relative TSR
115
Annual Report and Accounts 2020Tyman plcGOVERNANCE Remuneration report CONTINUED
Annual report on Directors’ remuneration
Payments to past Directors
There were no cash payments to past Directors during the year.
In line with the leaver treatment outlined in last year’s report, Louis Eperjesi retained an interest in 88,191 shares under
the 2018 LTIP. These awards were based on three-year cumulative EPS to 31 December 2020, with a threshold target
of 92 pence and stretch target of 109 pence. Adjusted cumulative EPS over the three-year period was 82.36 pence and
accordingly none of the LTIP awards vested. During the year under review, Louis Eperjesi’s interest in 37,555 shares
(including dividend equivalents) under the 2017 DSBP also vested.
In line with the leaver treatment outlined in last year’s report, James Brotherton’s retained interest in 23,178 shares
(including dividend equivalents) under the 2017 DSBP vested in March 2020.
Service contracts
Service contracts were entered into between the Company and the Executive Directors as follows:
Jo Hallas
Jason Ashton
Details of the letters of appointment of the Non-executives are shown below:
Commencement
date
1 April 2019
9 May 2019
Notice period
in months
Twelve
Twelve
Non-executive Director
Nicky Hartery
Paul Withers
Pamela Bingham
Helen Clatworthy
Date of
appointment
Latest date of
appointment/
reappointment
Expiry date
Notice period
in months
1 October 2023
1 October 2020
1 October 2020
1 February 2020 1 February 2020 1 February 2023
18 January 2018 18 January 2021 18 January 2024
9 January 2023
9 January 2020
9 January 2017
One
One
One
One
Copies of service contracts and letters of appointment are available to view at the Company’s registered office.
External appointments of Executive Directors
The Executive Directors do not hold any external appointments.
Performance graph and table
This graph shows the value, by 31 December 2020, of £100 invested in Tyman plc on 31 December 2010, compared with
the value of £100 invested in the FTSE All-Share and FTSE SmallCap indices on the same date, these being two broad
market indices of which Tyman has been a constituent for the majority of the period shown.
Total shareholder return
£450
£400
£350
£300
£250
£200
£150
£100
£50
)
d
e
s
a
b
e
r
(
)
£
(
l
e
u
a
V
£0
31/12/10 31/12/11 31/12/12 31/12/13 31/12/14 31/12/15 31/12/16 31/12/17 31/12/18 31/12/19 31/12/20
Tyman PLC
FTSE All-Share Index
FTSE Small Capitalisation Index
116
Tyman plcAnnual Report and Accounts 2020
Historical Chief Executive remuneration outcomes
The table below sets out the single figure for the total remuneration paid to the Chief Executive Officer, together with
the annual bonus payout (expressed as a percentage of the maximum opportunity) and the LTIP payout (expressed as a
percentage of the maximum opportunity), for the current year and previous nine years.
Year
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
CEO
Jo Hallas
Jo Hallas
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Single figure of
total remuneration
£’000
501
1,2992
134
1,153
876
1,052
1,026
1,137
1,821
493
338
Annual
bonus
payout
%
Nil1
30
n/e
39.5
51
91
58
31
90
68
22
LTIP
payout
%
n/e
n/e2
Nil
90
42
49
100
94
100
Nil
Nil
‘n/e’= not eligible – individual was employed during the year but was not eligible to participate in the bonus or LTIP
scheme as appropriate that year.
1. The 2020 Group bonus was cancelled due to the scale of the financial impact of the COVID-19 crisis on the business, the wider
stakeholder experience and the societal impact of the pandemic.
2. The single figure shown for Jo Hallas for 2019 of £1,299k includes £775k in relation to the buy-out of the share awards at her previous
employer which she forfeited by joining Tyman during the year. Consequently, the amount paid to Jo Hallas solely in respect to her
Tyman employment during 2019 was £524k.
Percentage change in remuneration of Directors and employees
The Committee has previously disclosed year-on-year changes in salary, benefits and annual bonus for the Chief
Executive Officer compared with that of all employees. In accordance with the Companies (Directors’ remuneration policy
and Directors’ remuneration report) Regulations 2019 (applying to financial years commencing on or after 10 June 2019),
this analysis has now been expanded to cover each Executive Director and Non-executive Director. This table will be built
up over time to display a five-year history.
Director1,2
Nicky Hartery
Jo Hallas
Jason Ashton
Paul Withers
Pamela Bingham
Helen Clatworthy
Martin Towers
Mark Rollins
Average UK employee6
Basic salary/total fee3
(2020 vs 2019)
Taxable benefits4
(2020 vs 2019)
Annual bonus5
(2020 vs 2019)
n/a
-5.9%
-6.0%
n/a
1.0%
-1.3%
-5.8%
2.5%
1.9%
n/a
-3.5%
-1.3%
n/a
n/a
n/a
n/a
n/a
5.8%
n/a
-100.0%
-100.0%
n/a
n/a
n/a
n/a
n/a
-91.4%
1. Changes in Directors and responsibilities during the 2019 and 2020 financial years as follows:
a. Nicky Hartery was appointed to the Board on 1 October 2020
b. Jo Hallas was appointed to the Board as the Chief Executive Officer on 1 April 2019.
c. Jason Ashton was appointed to the Board as the Chief Financial Officer on 9 May 2019.
d. Paul Withers was appointed to the Board on 1 February 2020 and became Chair of the Remuneration Committee and Senior
Independent Director with effect from 31 March 2020.
e. Pamela Bingham started receiving a fee in respect of her role as Employee Engagement Director with effect from 1 March 2020.
f. Martin Towers stepped down from the Board on 30 November 2020.
g. Mark Rollins stepped down from the Board on 31 March 2020.
2. All figures shown are based on a full-time equivalent basis to allow comparability where a Director was not in role for the entirety of a
financial year.
3. All the Directors who were in role from April to July 2020 volunteered cuts of 25% to their base salaries and fees for 4 months (April
to July) due to COVID-19. Whilst the workforce also experienced cuts to their salaries ranging from 10 to 20 per cent, the workforce’s
forgone salaries were repaid to them. However, the cuts to the Directors’ salaries and fees were not repaid to them.
4. For Executive Directors, taxable benefits consist primarily of car allowance, private medical insurance, permanent health insurance
and life assurance. Non-executive Directors do not receive taxable benefits.
5. The figures shown are reflective of any bonus earned in respect of the relevant financial year. Non-executive Directors are not eligible
to participate in the annual bonus scheme.
6. The average percentage change of employee FTE salary is calculated with reference to the UK workforce as at 31 December 2020.
This definition is broader than all employees of Tyman plc (as required by the reporting regulations), reflecting that the Tyman plc
employee population is very small (and limited largely to the Head Office) and therefore is considered by the Committee not to be
sufficiently representative of our wider workforce.
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Annual report on Directors’ remuneration
Relative spend on pay
The table below sets out, for the years ended 31 December 2020 and 31 December 2019, the total cost of employee
remuneration for the Group together with the total distributions made to shareholders by way of dividends.
Relative spend on pay (£’000)
Total employee remuneration for the Group (excluding share-based payments)
Dividends paid in the financial year
2020
140,037
Nil
2019
147,212
23,577
Year on year
% change
-4.87
-100
CEO pay ratio
The Regulations require certain companies to disclose the ratio of the Chief Executive’s pay, using the amount set out
in the single total figure table, to that of the 25th percentile, median and 75th percentile total remuneration of full-time
equivalent UK employees.
Year
2020
2019
Salary
2020
2019
Total pay
2020
2019
25th
percentile
pay ratio
1:26
1:32
Median pay
ratio
1:22
1:27
75th
percentile
pay ratio
1:14
1:19
Method
Option A
Option A
CEO pay (£) P25 pay (£) P50 pay (£) P75 pay (£)
418,919
441,750
18,331
19,550
21,930
23,335
501,409
657,510
19,064
20,333
23,027
24,268
33,729
33,598
36,090
33,598
The 25th percentile, median and 75th percentile figures used to determine the above ratios were selected from an
analysis of the full-time equivalent annualised remuneration (comprising salary, benefits, pension, annual bonus and
long-term incentives) of all the UK employees for the year end 31 December 2020. This methodology is defined as Option
A under the reporting regulations and is considered by the Committee to be the most accurate approach.
The Committee notes that the statutory CEO pay ratios have fallen in 2020 as compared to 2019, with the ratio of CEO
total remuneration to the median employee, for example, dropping from 27:1 to 22:1. This change reflects a number
of factors, including the cancellation of the annual bonus scheme for executive Directors and the temporary salary
reduction of 25% volunteered for the period from April 2020 to July 2020. Neither the 2019 nor the 2020 figure includes
any LTIP vesting to the CEO (who was appointed in 2019) which is expected to be a significant driver of the headline pay
ratio each year and which may lead to an increase in the ratios in future.
In reviewing the pay ratio analysis, the Committee is satisfied that the individuals identified at each quartile reflect the
pay profile across different levels at Tyman, and that the overall picture presented by the ratios is consistent with the
Group’s pay, reward and progression policies.
118
Tyman plcAnnual Report and Accounts 2020
Statement of implementation for the 2021 financial year
Details of the Directors’ remuneration for the 2021 financial year are set out in the table below:
Salary
Pension allowance
Benefits
Annual bonus
LTIP
Jo Hallas – to be increased to £477,500 with effect from 1 January 2021
(2020: £457,000 – 4.5% increase)
Jason Ashton – £330,890 (2020: £326,000 – 1.5% increase)
The average increase for the general worldwide workforce was between 1.5% and 3.3% (excl.
Mexico). As set out in the Annual statement, the Committee awarded Jo Hallas a 4.5% salary
increase in recognition of her ongoing strong performance (and in line with other high performers
across the Group).
Jo Hallas – 15% of base salary
Jason Ashton – 7% of base salary.
Life assurance cover, critical illness cover, private medical and dental cover, car allowance (of
£17,500 per annum) and professional tax and financial advice.
Maximum opportunities:
Jo Hallas: 150% of salary
Jason Ashton: 125% of base salary
Bonuses will be based entirely on financial measures, with 70% linked to adjusted profit before tax
and 30% linked to cash generation. Consistent with prior years, the precise bonus targets will be
disclosed in detail in the 2021 Annual report and Accounts. Any bonus earned will be payable 50%
in cash and 50% in shares deferred for three years.
Award opportunities:
Jo Hallas: 150% of salary
Jason Ashton: 125% of base salary
While 2021 LTIP awards will be made to the Executive Directors following the AGM (subject to
shareholder approval of the proposed Policy), awards will be calibrated as a number of shares
using the same average share price used to determine the numbers of shares to be awarded
to all other eligible employees in March 2021, to support alignment of interests across the LTIP
population.
LTIP awards comprise grants of nil-cost options, vesting three years after grant, subject to
performance over a 3-year period commencing 1 January 2021 against four measures:
Measure
Weighting
Basis of measurement
Threshold
(25% vesting)
Stretch
(100% vesting)
Adjusted EPS
ROCE
Relative TSR
ESG
40%
25%
20%
15%
− Safety
− Environment
Four categories
weighted equally
− Impact
− Culture
3-year CAGR to 2023
4.5% p.a.
12.0% p.a.
2023 outturn
Ranking vs constituents of
the FTSE250 Index (xIT)
13.0%
Median
14.2%
Upper quartile
2023 TRIR1
2023 TCO2e per £m
revenue2
2023 sustainable product
revenues3
Employee engagement
5.5
64.0
17%
4.0
48.0
20%
To be based on a qualitative assessment
of improvement by the Workforce
Engagement NED, taking into account
factors such as eNPS4, ethics training
and incidents, diversity and inclusion,
and talent development.
1. Total Recordable Incident Rate. Aligns with Tyman’s stated ambition to achieve a TRIR of <3.0 by 2026.
2. Tonnes of carbon dioxide equivalents per £m revenue is a measure of operation carbon emissions. Aligns
with Tyman’s stated ambition to achieve a 50% reduction by 2026 (relative to a 2019 baseline).
3. Reflects the % of total revenues that meet the UN Sustainable Development Goals (SDGs) in use.
4. Employee Net Promoter Score
For performance between Threshold and Stretch, the % vesting increases on a straight line
sliding scale.
Vested LTIP awards continue to be required to be retained for two years after vesting.
119
Annual Report and Accounts 2020Tyman plcGOVERNANCE Remuneration report CONTINUED
Annual report on Directors’ remuneration
Non-executive Director fees
The Chair is paid an annual basic fee (determined by the Remuneration Committee), with no additional fee for chairing
the Nominations Committee. For 2021, the Chairman’s annual fee will be increased by 1.5% (to £192,850), in line with
the average increase awarded to the workforce.
Non-executive Directors are paid an annual basic fee, plus an additional fee for chairing a Board Committee. These fees
are determined by the Chairman, CEO and CFO. In line with the increases awarded to the Chairman, the CFO and the
wider workforce, the annual base fee payable to NEDs will be increased by 1.5% (to £50,000) for 2021. The fees payable
to NEDs for additional responsibilities were also reviewed during 2020 in the context of the evolving nature and time
commitment of these roles given Tyman’s scale, complexity and international footprint. It was concluded that these
should be revised for 2021, as set out below.
Position
Chair
Non-executive Director
Annual fee for the Chair of the Audit or Remuneration Committees
Annual fee for the Senior Independent Director
Annual fee for the Employee Engagement Director
Annual fee
2021
£
192,850
50,000
10,000
8,000
6,000
Annual fee
2020
£
190,0001
49,250
8,500
7,000
5,1002
1. This annual fee applied to Nicky Hartery upon his appointment as Board Chair on 1 December 2020. The annual fee paid to Martin
Towers as Chair of the Board from 1 January 2020 – 30 November 2020 was £142,500.
2. Fee introduced with effect from 1 March 2020.
Other items
Details of share plans
During the year awards were made under the following plans:
• Tyman Sharesave Plans: in the form of options totalling 394,215 shares at a price of £1.6054 to £1.842, vesting over a
one or three-year period, depending on jurisdiction. The total number of awards outstanding as at 31 December 2020
is 605,019.
• Deferred Share Bonus Plan: in the form of deferred share awards totalling 69,022 shares. Awarded as a nil-cost option
in respect of deferred bonus, vesting over a three-year period. The total number of share awards outstanding as at 31
December 2020 is 348,634.
• Tyman Long Term Incentive Plan: awards totalling 1,005,686 shares were made in the year. Awarded with performance
conditions, vesting over a three-year period, with a further two-year holding period. The total number of LTIP awards
outstanding as at 31 December 2020 is 2,407,752.
The total number of shares outstanding under all share plans as at 31 December 2020 is 3,361,405.
Dilution
As at 31 December 2020, shares equivalent to 1.72% of the Group’s issued share capital (excluding treasury shares) would
be required to settle all outstanding awards under Executive and employee share plans, assuming maximum vesting.
However, the Group operates the general principle that the vesting of share awards under Executive and employee share
plans should be satisfied either by the issue of shares out of treasury or, subject to Trustee consent, through shares
acquired on the market by the Tyman Employee Benefit Trust.
Certain jurisdictions require that new shares are issued to employees to settle vesting under share arrangements. Where
new shares are issued in these circumstances it is the Group’s intention to match the new shares issued with an equal
purchase of shares on the market either into treasury or into the Tyman Employee Benefit Trust.
In accordance with The Investment Association Principles of Remuneration, the Company can satisfy awards to
employees under all its share plans with new issue shares or shares issued from treasury up to a maximum of 10% of
its issued share capital (adjusted for share issuance and cancellation) in a rolling ten-year period. Within this 10% limit,
the Company can only issue (as newly issued shares or from treasury) 5% of its issued share capital (adjusted for share
issuance and cancellation) to satisfy awards under Executive (discretionary) plans.
As well as the LTIP and DSBP, the Company operates various all employee share schemes as described on page 110.
Subject to Trustee consent, shares acquired on the Market have been used to satisfy the exercise of options under the
Sharesave Scheme and the International Sharesave Plans.
120
Tyman plcAnnual Report and Accounts 2020 Statement of voting at Annual General Meetings
The table below sets out the results of the 2020 AGM in respect of the Remuneration policy and Annual report on
Directors’ remuneration respectively:
Remuneration policy
Annual report on Directors’ remuneration
Votes
for
Votes at
discretion
Votes
against
Total number
of votes cast
163,978,639
(93.93%)
174,548,932
(99.98%)
0
(0%)
0
(0%)
10,599,603
(6.07%)
29,310
(0.02%)
174,578,242
(100%)
174,578,242
(100%)
Total number
of votes
withheld
3.894
3.894
The Committee is grateful to the Group’s shareholders for their support as shown in the voting levels at the 2020 AGM
and looks forward to receiving their continued support in 2021.
This Annual report on Directors’ remuneration has been approved by the Remuneration Committee and is signed on its
behalf by:
Paul Withers
Chair, Remuneration Committee
4 March 2021
121
Annual Report and Accounts 2020Tyman plcGOVERNANCE Other statutory information
Principal activities
The Group is a leading international
supplier of engineered fenestration
components and access solutions
to the construction industry. These
activities remain unchanged from
the previous year. The Company is
the ultimate holding company of the
Tyman Group of companies. A full list
of subsidiaries may be found on pages
175 to 177.
Share capital
The Company’s shares are listed in
the premium segment of the Official
List and are traded on the Main
Market of the London Stock Exchange.
The Company’s share capital consists
of ordinary shares of 5.00 pence
each, carrying the right to attend,
vote and speak at general meetings
of the Company. The ordinary shares
also have the right to profits of the
Company which are available for
distribution and the return of capital
on a winding up.
The issued share capital of the
Company as at 31 December 2020
was 196,762,059 ordinary shares of
5.00 pence each, of which 521,423
shares are held in Treasury.
Further information on the Company’s
share capital may be found in note 22
to the financial statements.
Directors
The names and biographical details
of the Directors are on pages 80 to
81 of this report. Further information
regarding the Directors who served
during the year to 31 December 2020
may be found on pages 112 to 121 in
the Remuneration report.
Re-election of Directors
Each Director of the Board will stand
for election or re-election at the AGM.
Accordingly, Jason Ashton, Pamela
Bingham, Helen Clatworthy, Jo Hallas
and Paul Withers will offer themselves
for re-election at the 2021 AGM. As
this is Nicky Hartery’s first year of
appointment, he will offer himself for
election to the Board.
Annual General Meeting
At the Company’s 2020 AGM the
Directors were authorised to allot
shares equal to approximately one-
third of the issued share capital of
the Company as at 3 April 2020 or a
further one-third of the issued share
capital in connection with a pre-
emptive offer by way of a rights issue.
The Directors were also given the
authority to allot shares for cash
representing up to 5.0% of the
Company’s issued share capital as
122
at 3 April 2020, without first offering
these shares to existing shareholders
in the proportion to their existing
holding. The Directors confirmed
there was no intention to issue more
than 7.5% of the issued share capital
of the Company on a non-pre-emptive
basis in any rolling three-year period
without prior consultation with the
relevant investor groups (except
in connection with an acquisition
or specified capital investment as
contemplated by the Pre-Emption
Group’s Statement of Principles).
Shareholders also approved
an additional authority for the
Directors to issue ordinary shares,
or sell treasury shares, for cash
in connection with an acquisition
or capital investment of the kind
contemplated by the Pre-Emption
Group’s Statement of Principles up to
an additional aggregate amount being
approximately 5.0% of the issued
ordinary share capital as at 3 April
2020.
At the 2020 AGM, the Company was
also authorised to make market
purchases of its own shares of up to
approximately 14.99% of the shares
in issue as at 3 April 2020. The
Board had no immediate intention of
exercising this authority but wished
to retain the flexibility to do so should
it be needed in the future. This
authority was not used during the
year and therefore remained in full at
the year end.
The Directors believe that it is in
the best interests of the Company
that these powers are renewed and,
as in previous years, resolutions to
renew these authorities will be put to
shareholders at the Company’s AGM
to be held on 20 May 2021.
The Notice of the Company’s AGM and
related explanatory notes accompany
this Annual report and Accounts,
which may also be found with further
information on these resolutions
on the Group’s website. Other than
elections to the Board and authorities
to allot shares, to dis-apply pre-
emption rights in certain limited
circumstances and to purchase its
own shares as explained above, the
principal business to be considered
at the AGM is the approval of a new
Directors’ Remuneration policy and
other routine matters.
Waiver of dividends
As at 31 December 2020, the
Tyman Employee Benefit Trust held
1,068,969 ordinary shares in Tyman
plc. Further information on the
Employee Benefit Trust may be found
on page 51. Dividend waivers are in
place from Tyman plc in respect of the
521,423 shares held in Treasury as at
31 December 2020 and all but £0.01
of the total dividend to the Tyman
Employee Benefit Trust.
Strategic report
Pages 20 to 121 (inclusive) of this
Annual report comprise the Strategic
report, Governance and Directors’
report and the Remuneration report.
These reports have been written and
presented in accordance with English
law and the liabilities of the Directors
in connection with this report shall
be subject to the limitations and
restrictions provided accordingly.
The Directors are required under
the Disclosure Guidance and
Transparency Rules to include a
Management report containing a
fair review of the business and a
description of the principal risks
and uncertainties facing the Group
and the Company. The Management
report disclosures can be found in the
Strategic report on pages 1 to 79.
A description of the main features
of the Group’s internal control and
risk management systems in relation
to the process for preparing the
consolidated accounts continues
further on pages 54 to 60 of the
Strategic report.
Pursuant to Section 414c of the
Companies Act 2006 the Strategic
report on pages 1 to 79 contains
disclosures in relation to future
developments, dividends, finance
and financial risk management,
and the disclosures relating to the
Group’s greenhouse gas emissions
and environmental policy and
performance.
A full description of the Group’s
activities relating to our employees,
their involvement with the Company
and our employment and health and
safety practices and policies may
be found on pages 68 to 79 of the
Strategic report.
Share transfer restrictions
There are no restrictions on the
transfer of fully paid-up shares in the
Company.
Directors and Officers’
insurance
Details of the Group’s Directors and
Officers’ insurance arrangements may
be found on page 87.
Tyman plcAnnual Report and Accounts 2020 Substantial shareholders
The Company has been notified of, or has identified, the following direct or indirect interests comprising 3% or more of
its voting share capital (the issued share capital less shares held by the Company in Treasury) in accordance with DTR 5.
The Company’s substantial shareholders do not have different voting rights from those of other shareholders:
Ordinary
shares
held as at
31 December
2020
26,223,990
18,942,011
11,474,271
10,756,881
9,697,467
9,160,936
9,104,351
8,657,829
7,137,969
6,836,095
6,579,617
6,540,324
6,200,000
Ordinary
shares
notified as at
4 March
2021
25,925,911
18,155,692
11,764,645
10,635,265
9,487,137
9,055,215
8,552,681
7,548,088
7,339,526
7,884,663
6,576,522
6,540,324
7,050,000
%
13.36
9.65
5.85
5.48
4.94
4.67
4.64
4.41
3.64
3.48
3.35
3.33
3.16
%
13.21
9.25
6.00
5.42
4.83
4.61
4.36
3.85
3.74
4.02
3.35
3.33
3.59
Going concern
As a consequence of the work
undertaken to support the viability
statement, which may be found on
pages 61 to 62, the Directors have
continued to adopt the going concern
basis in preparing the financial
statements (see note 2 to the
financial statements).
Auditors and disclosure of
information to auditors
The Directors who held office at the
date of approval of this Directors’
report confirm that, so far as they
are aware, there is no relevant audit
information of which the Company’s
auditors are unaware and each
Director has taken all the steps
that they ought to have taken as a
Director to make themselves aware of
any relevant audit information and to
establish that the Company’s auditors
are aware of that information. The
auditors, PricewaterhouseCoopers
LLP, have indicated their willingness
to continue in office, and a resolution
that they be reappointed will be
proposed at the Annual General
Meeting.
Political donations
The Company did not make any
political donations during the year
(2019: £Nil).
Disclosure of information
under Listing Rule 9.8.4
Reporting requirements under LR
9.8.4R (4), (5) and (6) and LR 9.8.6
(1), if applicable, have been included
in the Remuneration report on pages
100 to 121. All other information
required to be disclosed, under LR
9.8.4R (1), (2) and (7) to (14), if
applicable, is covered in this report.
There is no further information to
disclose.
Events after the
reporting year
None.
By order of the Board
Peter Ho
General Counsel & Company
Secretary
4 March 2021
Company registration number:
02806007
Alantra Asset Management
Wellington Management
Fidelity International
Aberdeen Standard Investments
Artemis Investment Management
Allianz Global Investors
M&G Investments
T Rowe Price Global Investments
BMO Global Asset Management (UK)
BlackRock
Janus Henderson Investors
Sterling Strategic Value Fund
Chelverton Asset Management
Financing
The Group finances its operations
through a mixture of retained
profits, equity and borrowings. The
Group does not trade in financial
instruments. Full details of the
Group’s borrowing facilities are
set out in note 18 to the financial
statements.
The main risks arising from the
Group’s borrowings are market risk,
interest rate risk, liquidity risk,
foreign currency risk and credit risk.
The Board reviews and agrees policies
for managing each of these risks and
the policies, which have been applied
throughout the year, are set out in
note 19 to the financial statements.
Financial reporting
The Annual report and Accounts is
intended to provide a balanced and
clear assessment of the Group’s past
performance, present position and
future prospects. A statement by the
Directors on their responsibility for
preparing the financial statements is
given on page 88 and a statement by
the auditors on their responsibilities is
given on page 130.
Employee engagement and
policies
This information is included in the
Sustainability report on pages
68 to 79.
123
Annual Report and Accounts 2020Tyman plcGOVERNANCE Independent auditors’ report
to the members of Tyman plc
Report on the audit of the financial statements
Opinion
In our opinion:
• Tyman plc’s Group financial statements and Company financial statements (the “financial statements”) give a true
and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2020 and of the Group’s and
Company’s profit and the Group’s cash flows for the year then ended;
• the Group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
• the Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure
Framework”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual report and accounts (the “Annual Report”), which
comprise: the consolidated and Company balance sheets as at 31 December 2020; the consolidated income statement
and consolidated statement of comprehensive income, the consolidated cash flow statement, and the consolidated and
Company statements of changes in equity for the year then ended; and the notes to the financial statements, which
include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Separate opinion in relation to international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union
As explained in note 2.1 to the Group financial statements, the Group, in addition to applying international accounting
standards in conformity with the requirements of the Companies Act 2006, has also applied international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
In our opinion, the Group financial statements have been properly prepared in accordance with international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided to the Group.
Other than those disclosed in note 4 to the financial statements, we have provided no non-audit services to the Group in
the period under audit.
124
Tyman plcAnnual Report and Accounts 2020 Our audit approach
Overview
Audit scope
• 10 operating units subject to full scope audits on the basis of financial significance
• Specific procedures over certain classes of transactions and balances at 8 further operating units where the particular
balances were financially significant
• 80% (2019: 74%) of Group revenue accounted for by reporting units where full scope audit work performed over
revenue. 79% (2019: 71%) of Group adjusted operating profit accounted for by the reporting units where full scope
audit work was performed.
• Specific audit procedures on certain balances and classes of transactions provided additional coverage.
Key audit matters
• Goodwill and intangible assets impairment assessment (Group)
• Going concern (Group)
• Impact of COVID-19 (Group)
Materiality
• Overall Group materiality: £4,100,000 (2019: £4,300,000) based on 5% of three years average of adjusted operating
profit.
• Overall Company materiality: £3,700,000 (2019: £4,000,000) based on 1% of total assets.
• Performance materiality: £3,100,000 (Group) and £2,800,000 (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section,
to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches in health and safety regulations and employment law, and we considered the
extent to which non-compliance might have a material effect on the financial statements. We also considered those
laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act
2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the principal risks were related to posting inappropriate
journal entries to revenue and management bias in accounting estimates. The group engagement team shared this risk
assessment with the component auditors so that they could include appropriate audit procedures in response to such
risks in their work. Audit procedures performed by the group engagement team and/or component auditors included:
• Discussions with management including consideration of known or suspected instances of non-compliance with laws
and regulation.
• Evaluating management’s controls designed to prevent and detect irregularities.
• Identifying and testing journals, in particular journal entries posted with unusual account combinations or with unusual
descriptions.
• Challenging assumptions and judgements made by management in their significant accounting estimates including the
key audit matters described below.
• Assessing matters reported on the entity’s whistleblowing helpline.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
125
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Independent auditors’ report CONTINUED
to the members of Tyman plc
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, 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, and any
comments we make on the results of our procedures thereon, 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.
This is not a complete list of all risks identified by our audit.
Going concern and the Impact of COVID-19 are new key audit matters this year. IFRS 16 and Exceptional items, which
were key audit matters last year, are no longer included because Exceptional items are no longer material at a Group
level and IFRS 16 is not in its first year of adoption. Otherwise, the key audit matters below are consistent with last year.
How our audit addressed the key audit matter
There are deemed to be three CGUs, namely North America,
UK & Ireland and International. For all the CGUs we evaluated
management’s future cash flow forecasts and tested the
underlying value in use calculations. We agreed management’s
forecast to the latest Board approved strategic plan. We also
compared historic actual results to those budgeted to assess the
quality of management’s forecasting. When comparing the current
year results to forecast results, we have used the reforecast
management prepared during the year as the effects of COVID-19
could not have been predicted or factored into forecasts prepared.
We considered the performance of the Group in H2 of the year
where economies around the world started to lift restrictions.
The key assumptions in the calculations were growth in revenue
and EBITDA margins. In assessing these assumptions, we
considered external construction industry outlook reports and
economic growth forecasts from a variety of sources, as these
were good indicators of building product sales. We also tested:
• management’s assumption in respect of the long term growth
rates in the forecasts by comparing them to long term average
growth rates of the economies in the relevant territories; and
• the discount rate by assessing the cost of capital for the
Company and comparable organisations.
We are satisfied these assumptions are appropriate.
We performed sensitivity analysis in respect of the key
assumptions, which were flexed to determine at what level this
would eliminate the headroom in the model.
There were no changes in the key assumptions that were
considered reasonably possible which would eliminate headroom,
as outlined in the disclosure in note 10.
For our audit response and conclusions in respect of going
concern, see the ‘Conclusions relating to going concern’ section
below.
Key audit matter
Goodwill and intangible assets
impairment assessment (Group)
Refer to note 10 of the financial statements.
There is £361.9 million of goodwill and £84.1
million of intangible assets recognised on the
balance sheet, predominantly arising from past
acquisitions. The Group operates in the building
products market and therefore future results
are impacted by fluctuations in the housing and
construction market and wider economy.
We focused on these balances because the
determination of whether or not an impairment
charge was necessary involved significant
judgements about the future results of the
business.
Going concern (Group)
The Group’s financial statements at 31
December 2020 have been prepared on a going
concern basis. Refer to the basis of preparation
in note 2.
The impact of COVID-19 in the year has
resulted in widespread global disruption
affecting the Group’s major markets and the
countries in which the Group operates.
During the year, management obtained
relaxations of their banking covenants, relaxing
their adjusted EBITDA covenant from 3.0x to
3.5x.
Management have performed a detailed
assessment of forecast liquidity and covenant
compliance using a base case scenario, a
severe but plausible downside scenario and a
reverse stress test to conclude whether the
application of the going concern assumption
remains appropriate.
126
Tyman plcAnnual Report and Accounts 2020 Key audit matter
Impact of COVID-19 (Group)
The COVID-19 pandemic has had a significant
impact on the performance of the Group during
FY20, with the severity of the impact varying
across the Group’s divisions. As a result, the
pandemic has brought increased estimation
uncertainty to certain areas of the financial
statements.
The key areas of the financial statements
most impacted by the increased estimation
uncertainty are described below:
1. The Directors have considered the
appropriateness of the going concern basis
of preparation in the Group’s financial
statements, including assessing the impact
on the Group’s working capital and projected
covenant compliance.
2. COVID-19 has increased the estimation
uncertainty within impairment assessments
for goodwill and intangible assets.
How our audit addressed the key audit matter
In response to the key areas identified as being significantly
impacted by COVID-19, we performed the following procedures:
• We evaluated management’s assessment of the impact of
COVID-19 on the business performance during the year and the
future outlook.
• We ensured that we adequately directed, supervised and
reviewed the work undertaken by our significant and material
component audit teams in a remote working environment, we
increased the frequency and extent of our oversight, using
video conferencing and remote working paper reviews. We were
satisfied that the audit work performed by these audit teams
was sufficient, appropriate and in accordance with our issued
instructions.
• Refer to our key audit matter above for details on how we
considered the impact of COVID-19 in our audit procedures over
going concern.
• Refer to our key audit matter above for details of how we
considered the impact of COVID-19 in our audit procedures over
the goodwill and intangible assets impairment assessment.
• We considered the appropriateness of disclosures of the impact
of the current environment and the increased uncertainty on its
accounting estimates within the Annual Report and found these
to be adequate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group and the Company, the accounting processes and
controls, and the industry in which they operate.
The Group is structured along three business lines being Tyman North America, Tyman UK & Ireland and Tyman
International, along with centralised functions covering Group treasury and central costs. The Group financial statements
are a consolidation of 78 reporting units for the Group’s operating businesses, which map into the three business lines
and centralised functions.
Of the Group’s 78 reporting units, we identified 10 which, in our view, required an audit of their complete financial
information, due to their size. The units were based in the United Kingdom (UK), the United States (US), and Italy.
Specific audit procedures on certain balances and classes of transactions were performed at a further 8 reporting units,
as while overall the units were not financially significant, certain classes of transactions and balances were material or
considered to be higher risk, including interest, loans, cash, inventory, pension liabilities and revenue.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed at
each of the reporting units either by us, as the Group engagement team, or the component auditors in the US or Italy
operating under our instruction.
Where work was performed by the US and Italian component auditors, the UK engagement leader and senior manager
were in regular contact with the teams via video calls, reviewed audit work papers related to areas of focus, and
participated in the US and Italian component clearance meetings.
80% of the Group’s revenue is accounted for by reporting units where we performed full scope audit work or performed
specific audit procedures over revenue. 79% of the Group’s adjusted operating profit before taxation is accounted for by
the 10 reporting units where we performed full scope audit work on the complete financial information.
127
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Independent auditors’ report CONTINUED
to the members of Tyman plc
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we
determined it
Rationale for
benchmark applied
Financial statements - Group
£4,100,000 (2019: £4,300,000).
5% of three years average of adjusted operating profit
Financial statements - Company
£3,700,000 (2019: £4,000,000).
1% of total assets
The Company is predominantly an
investment holding company and
therefore total assets is deemed
the most appropriate benchmark.
Adjusted operating profit before tax is the key measure
used internally by management in assessing the
performance of the Group, externally by analysts, and
is the measure disclosed as a key performance indicator
in the Annual Report. This measure provides us with a
consistent year on year basis for determining materiality
based on trading performance and eliminates the impact
of non-recurring items. In the current year, due to the
COVID-19 pandemic, we have considered it appropriate
to use a three year average to determine materiality on
the basis that this is not a fundamental change in the
operating model of the business. Adjusted operating profit
excludes net finance costs, exceptional items, amortisation
of acquired intangible assets, and impairment of acquired
intangible assets and goodwill.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was £90,000 to £3,600,000. Certain components were
audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality,
amounting to £3,100,000 for the Group financial statements and £2,800,000 for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our
audit above £195,000 (Group audit) (2019: £212,500) and £185,000 (Company audit) (2019: £200,000) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going
concern basis of accounting included:
• Assessing the appropriateness of the Group’s cash flow, liquidity and gearing covenant forecasts in the context of
the Group’s 2020 financial position. In assessing this we considered the Group’s performance in H2 when economies
around the world started to lift restrictions. We also considered external construction industry outlook reports and
economic growth forecasts from a variety of sources, as these were good indicators of building product sales;
• Understanding and assessing the appropriateness of the key assumptions used both in the base case and in the
severe but plausible downside scenario, including assessing whether we considered the downside sensitivities to be
appropriately severe;
• Corroborating key assumptions to underlying documentation and ensured this was consistent with our audit work in
these areas;
• Obtaining and reviewing documents confirming the relaxation of the covenants;
• Testing the mathematical accuracy of management’s cash flow models;
• Considering the historical accuracy of management’s forecasting and note while there have been significant deviations
between the original 2020 budget compared to the 2020 actuals the reforecasting performed by management as a
result of the COVID-19 pandemic has been predominantly accurate; and
• Reviewing the disclosures provided relating to the going concern basis of preparation.
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 and the Company’s ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
128
Tyman plcAnnual Report and Accounts 2020 However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
Group’s and the Company’s ability to continue as a going concern.
In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for 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 to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
of the financial statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors’ report for the year ended 31 December 2020 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability
and that part of the corporate governance statement relating to the Company’s compliance with the provisions of the
UK Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement, included within the Statement of governance is materially consistent with the financial
statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in
relation to:
• The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual report and accounts that describe those principal risks, what procedures are in place to
identify emerging risks and an explanation of how these are being managed or mitigated;
• The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s
and Company’s ability to continue to do so over a period of at least twelve months from the date of approval of the
financial statements;
• The Directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment
covers and why the period is appropriate; and
• The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and
considering whether the statement is consistent with the financial statements and our knowledge and understanding of
the Group and Company and their environment obtained in the course of the audit.
129
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Independent auditors’ report CONTINUED
to the members of Tyman plc
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable,
and provides the information necessary for the members to assess the Group’s and Company’s position, performance,
business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the
Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ responsibilities statement, the directors are responsible for the preparation
of the financial statements in accordance with the applicable framework and for being satisfied that they give a true
and fair view. The directors are also responsible for 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.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ 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 auditors’ 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 (UK) 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.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Remuneration report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 1 May 2012 to
audit the financial statements for the year ended 31 December 2012 and subsequent financial periods. The period of total
uninterrupted engagement is 9 years, covering the years ended 31 December 2012 to 31 December 2020.
Richard Porter
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London
4 March 2021
130
Tyman plcAnnual Report and Accounts 2020 Consolidated income statement
For the year ended 31 December 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Analysed as:
Adjusted1 operating profit
Exceptional items
Amortisation of acquired intangible assets
Impairment of acquired intangible assets
Operating profit
Finance income
Finance costs
Net finance costs
Profit before taxation
Income tax charge
Profit for the year
Basic earnings per share
Diluted earnings per share
Non-GAAP alternative performance measures1
Adjusted1 operating profit
Adjusted1 profit before taxation
Basic Adjusted earnings per share
Diluted Adjusted earnings per share
Note
3
3
4
3
6
10
10
7
7
7
3
8
9
9
9
9
9
2020
£’m
572.8
(380.7)
192.1
(132.4)
59.7
80.3
(1.8)
(18.8)
–
59.7
0.3
(12.4)
(12.1)
47.6
(10.4)
37.2
19.07p
19.00p
2019
£’m
613.7
(408.1)
205.6
(165.1)
40.5
85.4
(18.9)
(23.5)
(2.5)
40.5
–
(15.7)
(15.7)
24.8
(7.1)
17.7
9.08p
9.05p
80.3
68.4
85.4
71.0
27.22p
27.12p
27.46p
27.35p
1 Before amortisation of acquired intangible assets, deferred taxation on amortisation of acquired intangible assets, impairment of
goodwill, exceptional items, unwinding of discount on provisions, gains and losses on the fair value of derivative financial instruments,
amortisation of borrowing costs and the associated tax effect. See definitions and reconciliations on pages 183 to 188 for non-GAAP
Alternative Performance Measures.
The notes on pages 136 to 177 are an integral part of these consolidated financial statements.
131
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Consolidated statement of comprehensive income
For the year ended 31 December 2020
Profit for the year
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations
Total items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Effective portion of changes in value of cash flow hedges
Total items that may be reclassified to profit or loss
Other comprehensive income/(expense) for the year, net of tax
Total comprehensive income for the year
Note
21
17
2020
£’m
37.2
1.4
1.4
(12.7)
0.3
(12.4)
(11.0)
26.2
2019
£’m
17.7
(1.0)
(1.0)
(11.9)
–
(11.9)
(12.9)
4.8
Items in the statement above are disclosed net of tax. The income tax relating to each component of other
comprehensive income is disclosed in note 8.
The notes on pages 136 to 177 are an integral part of these consolidated financial statements.
132
Tyman plcAnnual Report and Accounts 2020
Consolidated statement of changes in equity
For the year ended 31 December 2020
Share
capital
£’m
Share
premium
£’m
Treasury
reserve
£’m
Hedging
reserve
£’m
Translation
reserve
£’m
Retained
earnings
£’m
At 1 January 2019
Change in accounting policy1
Total comprehensive (expense)/income
Profit for the year
Other comprehensive income/
(expense)
Transactions with owners
Share-based payments2
Dividends paid
Capital reduction
Issue of own shares from
Employee Benefit Trust
Purchase of own shares for
Employee Benefit Trust
At 31 December 2019
Total comprehensive income/(expense)
Profit for the year
Other comprehensive income/
(expense)
Transactions with owners
Share-based payments2
Issue of own shares from
Employee Benefit Trust
Purchase of own shares for
Employee Benefit Trust
At 31 December 2020
9.8
–
–
–
–
–
–
–
–
–
–
9.8
–
–
–
–
–
–
–
9.8
132.2
–
–
–
–
(132.2)
–
–
(132.2)
–
–
–
–
–
–
–
–
–
–
–
(4.9)
–
–
–
–
0.6
–
–
–
2.6
(2.0)
(4.3)
–
–
–
0.9
–
1.2
(0.3)
(3.4)
(0.3)
–
–
–
–
–
–
–
–
–
–
(0.3)
0.3
–
0.3
–
–
–
–
–
Total
equity
£’m
433.8
2.4
4.8
17.7
(12.9)
(24.7)
0.9
(23.6)
–
71.4
–
(11.9)
–
(11.9)
–
–
–
–
225.6
2.4
16.7
17.7
(1.0)
106.9
0.9
(23.6)
132.2
–
(2.6)
–
–
59.5
(12.7)
–
(12.7)
–
–
–
351.6
38.6
37.2
1.4
(0.3)
0.9
(2.0)
416.3
26.2
37.2
(11.0)
0.6
0.9
–
(1.2)
–
–
46.8
–
389.9
(0.3)
443.1
1 The change in accounting policy at 1 January 2019 relates to adoption of IFRS 16 ‘Leases’.
2 Share-based payments include a tax credit of £0.2 million (2019: tax credit of £0.1 million) and a release of the deferred share-based
payment bonus accrual of £0.6 million (2019: £0.4 million).
The notes on pages 136 to 177 are an integral part of these consolidated financial statements.
133
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Consolidated balance sheet
As at 31 December 2020
TOTAL ASSETS
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Right of use assets
Financial assets at fair value through profit or loss
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Derivative financial instruments
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax liabilities
Retirement benefit obligations
Provisions
Other payables
TOTAL LIABILITIES
NET ASSETS
EQUITY
Capital and reserves attributable to owners of the Company
Share capital
Treasury reserve
Hedging reserve
Translation reserve
Retained earnings
TOTAL EQUITY
Note
2020
£’m
2019
£’m
10
10
11
12
14
8
13
14
15
16
17
18
12
20
18
12
8
21
20
16
22
361.9
84.1
60.7
51.8
1.1
16.3
575.9
84.0
72.8
69.7
226.5
802.4
(84.4)
(0.2)
(40.3)
(5.4)
(6.8)
(1.3)
(138.4)
(128.8)
(48.4)
(26.8)
(8.9)
(7.6)
(0.4)
(220.9)
(359.3)
443.1
9.8
(3.4)
–
46.8
389.9
443.1
371.3
104.0
65.8
59.4
1.1
17.2
618.8
88.6
76.3
49.0
213.9
832.7
(84.9)
(0.7)
(0.3)
(6.0)
(6.5)
(2.5)
(100.9)
(211.5)
(54.0)
(31.3)
(11.2)
(7.1)
(0.4)
(315.5)
(416.4)
416.3
9.8
(4.3)
(0.3)
59.5
351.6
416.3
The notes on pages 136 to 177 are an integral part of these consolidated financial statements.
The financial statements on pages 131 to 135 were approved by the Board on 4 March 2021 and signed on its behalf by:
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Tyman plc
Company registration number: 02806007
134
Tyman plcAnnual Report and Accounts 2020
Consolidated cash flow statement
For the year ended 31 December 2020
Cash flow from operating activities
Profit before taxation
Adjustments
Changes in working capital1:
Inventories
Trade and other receivables
Trade and other payables
Provisions utilised
Pension contributions
Income tax paid
Net cash generated from operations
Cash flow from investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds on disposal of property, plant and equipment
Acquisitions of subsidiary undertakings, net of cash acquired
Net cash used in investing activities
Cash flow from financing activities
Interest paid
Dividends paid
Purchase of own shares for Employee Benefit Trust
Refinancing costs paid
Proceeds from drawdown of revolving credit facility
Repayments of revolving credit facility
Principal element of lease payments
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Exchange gains/(losses) on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
1 Excluding the effects of exchange differences on consolidation.
Note
3
26
11
10
25
2020
£’m
47.6
55.9
3.3
1.7
3.3
(0.4)
(1.7)
(13.8)
95.9
(9.9)
(0.6)
–
(1.5)
(12.0)
(12.5)
–
(0.3)
–
91.6
(135.7)
(6.4)
(63.3)
20.6
0.1
49.0
69.7
The notes on pages 136 to 177 are an integral part of these consolidated financial statements.
2019
£’m
24.8
71.9
13.7
7.7
0.7
(6.5)
(1.0)
(14.2)
97.1
(10.7)
(0.8)
0.8
(0.9)
(11.6)
(15.0)
(23.6)
(2.0)
(0.3)
33.5
(73.4)
(5.6)
(86.4)
(0.9)
(2.0)
51.9
49.0
135
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements
For the year ended 31 December 2020
1. General information
Tyman plc is a leading international supplier of engineered fenestration and access solutions to the construction industry.
The Group designs and manufactures products that enhance the comfort, sustainability, security, safety and aesthetics of
residential homes and commercial buildings. Tyman serves its markets through three regional divisions. Headquartered
in London, the Group employs approximately 4,130 people with facilities in 17 countries worldwide.
Tyman plc is a public limited company listed on the London Stock Exchange, incorporated and domiciled in England and
Wales. The address of the Company’s registered office is 29 Queen Anne’s Gate, London SW1H 9BU.
2. Accounting policies and basis of preparation
The accounting policies in this section relate to the financial statements in their entirety. Accounting policies, including
critical accounting judgements and estimates used in the preparation of the financial statements, that relate to a
particular note are described in the specific note to which they relate. The accounting policies have been consistently
applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
The consolidated financial statements of Tyman plc have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The consolidated financial statements have been prepared on a historical cost basis, except for items that are required by
IFRS to be measured at fair value, principally certain financial instruments.
2.2 Going concern
The Group’s business activities, financial performance and position, together with factors likely to affect its future
development and performance including the impact of COVID-19, are described in the Cheif Executive Officer’s review on
pages 36 to 38. Changes to principal risks and uncertainties are described on pages 57 to 60.
As at 31 December 2020, the Group had cash and cash equivalents of £69.7 million and an undrawn RCF available of
£143.1 million, giving liquidity headroom of £212.8 million. The Group also has potential access to an uncommitted
accordion facility of £70 million.
The Group is subject to leverage and interest cover covenants tested in June and December and had significant headroom
on both covenants at 31 December 2020. In order to provide increased headroom during the period of uncertainty earlier
in the year, the Group agreed a temporary relaxation of the leverage covenant from 3.0x adjusted EBITDA to 3.5x at 31
December 2020 and 4.0x at 30 June 2021.
The Group has performed an assessment of going concern through modelling several scenarios. The base case scenario
reflects the budget for 2021 and the strategic plan financials for 2022, which assumes current market conditions are
maintained. A severe but plausible downside scenario has also been modelled, which assumes a deterioration in revenue
from the base case of 17%. This scenario could arise if further significant lockdown measures are introduced in key
markets or the global economy enters a prolonged period of deep recession and reflects the level of deterioration
experienced in H1 2020 when the majority of the impact from COVID-19 was felt. This scenario includes additional
cost reduction actions available, mainly in relation to further reductions in discretionary spend. There are further cost
mitigating actions that could be taken by management in the event this became necessary.
In all scenarios modelled, the Group would retain significant liquidity and covenant headroom throughout the going
concern period.
Reverse stress-testing has also been performed to model a scenario which would result in elimination of covenant
headroom within the going concern assessment period. This scenario was considered highly unlikely.
Having reviewed the various scenario models, availably liquidity and taking into account current trading, the Directors are
satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less
than 12 months from the date of this report. Accordingly, the consolidated and Company financial information has been
prepared on a going concern basis.
Further details on the Group’s Viability statement is set out on pages 61 and 62 of the Annual report and accounts.
136
Tyman plcAnnual Report and Accounts 2020 2. Accounting policies and basis of preparation continued
2.3 Accounting judgements and estimates
The preparation of financial statements requires management to exercise judgement in applying the Group’s
accounting policies. It also requires the use of certain critical accounting estimates and assumptions that affect the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any affected future periods.
The areas representing the critical judgements made by management in the preparation of the Group’s financial
statements are listed below and in more detail in the related notes:
• exceptional items (note 6);
• leases (note 12).
The areas involving key assumptions concerning the future and other key sources of estimation uncertainty that are
significant to the financial statements are listed below and in more detail in the related notes:
• going concern assessment (note 2.2);
• recoverability of deferred tax assets (note 8);
• the carrying amount of goodwill and intangible assets (note 10);
• the carrying amount of inventories (note 13);
• the carrying amount of trade receivables (note 14);
• provisions (note 20);
• defined benefit pension and post-retirement benefit schemes (note 21).
2.4 Changes in accounting policies and disclosures
2.4.1 New, revised and amended EU-endorsed accounting standards
The accounting standards that became applicable in the year did not materially impact the Group’s accounting policies
and did not require retrospective adjustments.
2.4.2 New, revised and amended accounting standards currently EU-endorsed but not yet effective
A number of new, revised and amended accounting standards and interpretations are currently endorsed but are
effective for annual periods beginning on or after 1 January 2021, and have not been applied in preparing these
consolidated financial statements.
None of the standards which have been issued by the IASB but are not yet effective are expected to have a material
impact on the Group.
2.4.3 Other changes to accounting policies
The Group has utilised available government job retention schemes across various territories. The amount of government
support received outside of the United Kingdom in the year is £1.7 million, and this has been accounted for as a
government grant under IAS 20. As the grant has been intended to cover employee costs, this has been recognised in the
profit or loss within administrative expenses, offsetting the related expense. £2.3 million of government support income
received during the year in the United Kingdom was repaid in December 2020.
2.5 Consolidation
Subsidiaries are entities that are directly or indirectly controlled by the Group. Control exists when the Group 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. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are
eliminated. Unrealised losses are also eliminated. Where necessary, amounts reported by subsidiaries have been
adjusted to conform to the Group’s accounting policies.
2.6 Foreign exchange
2.6.1 Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in sterling, which is the functional currency of the Company and the presentation currency of the Group.
2.6.2 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow
hedges and qualifying net investment hedges. Other than the ineffective element, these are recognised directly in equity
until the disposal of the net investment, at which time they are recognised in the income statement.
137
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Notes to the financial statements CONTINUED
For the year ended 31 December 2020
2. Accounting policies and basis of preparation continued
2.6.3 Group companies
On consolidation, assets and liabilities of Group companies denominated in foreign currencies are translated into sterling
at the exchange rate prevailing at the balance sheet date. Income and expense items are translated into sterling at the
average rates throughout the year.
Exchange differences arising on the translation of opening net assets of Group companies, together with differences
arising from the translation of the net results at average or actual rates to the exchange rate prevailing at the balance
sheet date, are taken to other comprehensive income. On disposal of a foreign entity, the cumulative translation
differences recognised in other comprehensive income relating to that particular foreign operation are recognised in the
income statement as part of the gain or loss on disposal.
3. Segment reporting
3.1 Accounting policy
3.1.1 Revenue recognition
The Group derives revenue solely from the sale of goods to customers. This revenue recognition policy applies to
all product types and sales channels. Revenue from the sale of goods is recognised when control of the goods has
been transferred to the buyer. Control transfers when the customer has the ability to direct the use of and obtain
substantially all of the benefits of the goods. This is either on dispatch of the goods or on receipt of goods by the
customer, depending on the terms of shipment.
Where the Group is responsible for arranging shipping services, an evaluation is made to determine whether the
shipping services are a separate performance obligation. Where these are considered to be a separate performance
obligation, the revenue recognition criteria are applied to the performance obligations of sale of goods and shipping
services separately. Revenue is allocated to each performance obligation based on its standalone selling price.
The Group is considered to be acting as the principal in shipping arrangements when it has discretion over setting
prices, has primary responsibility for fulfilling the obligation, and retains inventory risk. In these circumstances, the
cost of freight to customers is considered a distribution expense. The cost of freight is recorded within administrative
expenses.
Revenue is measured at the fair value of the consideration received or receivable. Revenue represents the amounts
receivable for goods supplied, stated net of discounts, returns, rebates and value-added taxes. Where customers have
a right to return goods, a refund liability is recognised (included in trade and other payables) for the expected value
of refunds to be provided to customers. A corresponding contract asset is recognised reflecting the value of goods
expected to be returned (included in other receivables).
Accumulated experience is used to estimate and provide for rebates, discounts, and expected returns using the
expected value method, and revenue is only recognised to the extent that it is highly probable that a significant
reversal will not occur.
Incremental costs of obtaining a contract, such as sales commissions, are expensed as incurred, as the period over
which the Group obtains benefit from these is less than 12 months.
3.1.2 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker. The Chief Operating Decision Maker, defined as the Board of Directors of the Group, is responsible for
allocating resources and assessing performance of the operating segments.
3.2 Segment information
The reporting segments reflect the manner in which performance is evaluated and resources are allocated. The Group
operates through three clearly defined divisions: Tyman North America, Tyman UK & Ireland and Tyman International.
North America comprises all the Group’s operations within the US, Canada and Mexico. UK & Ireland comprises the
Group’s UK and Ireland hardware business, together with Access 360 and Tyman Sourcing Asia. International comprises
the Group’s remaining businesses outside the US, Canada, Mexico and the UK (although includes the two UK seal
manufacturing plants). Centrally incurred functional costs that are directly attributable to a division are allocated or
recharged to the division. All other centrally incurred costs and eliminations are disclosed as a separate line item in the
segment analysis.
Each reporting segment broadly represents the Group’s geographical focus, being the North American, UK and
international operations respectively. In the opinion of the Board, there is no material difference between the Group’s
operating segments and segments based on geographical splits. Accordingly, the Board does not consider geographically
defined segments to be reportable. For completeness, the Group discloses certain financial data for business carried on
in the UK that is not accounted for in Tyman UK & Ireland in notes 3.2.1 and 3.2.4.
The following tables present Group revenue and profit information for the Group’s reporting segments, which have been
generated using the Group accounting policies, with no differences of measurement applied, other than those noted above.
138
Tyman plcAnnual Report and Accounts 2020 3. Segment reporting continued
3.2.1 Revenue
North America
UK & Ireland
International
Total revenue
2020
Inter-
segment
revenue
£’m
(2.7)
(0.6)
(2.4)
(5.7)
Segment
revenue
£’m
374.8
92.8
110.9
578.5
External
revenue
£’m
Segment
revenue
£’m
372.1
92.2
108.5
572.8
388.3
107.5
122.8
618.6
2019
Inter-
segment
revenue
£’m
(2.3)
(0.3)
(2.3)
(4.9)
External
revenue
£’m
386.0
107.2
120.5
613.7
Included within the Tyman International segment is revenue attributable to the UK of £17.2 million (2019: £19.4 million).
There are no single customers which account for greater than 10% of total revenue.
3.2.2 Profit before taxation
North America
UK & Ireland
International
Operating segment result
Centrally incurred costs
Adjusted operating profit
Exceptional items
Amortisation of acquired intangible assets
Impairment of acquired intangibles
Operating profit
Net finance costs
Profit before taxation
3.2.3 Operating profit disclosures
North America
UK & Ireland
International
Total
3.2.4 Segment assets and liabilities
Note
6
10
10
7
2019
£’m
(13.3)
(2.6)
(4.7)
(20.6)
2020
£’m
64.5
8.8
12.3
85.6
(5.3)
80.3
(1.8)
(18.8)
–
59.7
(12.1)
47.6
Amortisation
2020
£’m
(13.7)
(3.4)
(3.2)
(20.3)
2019
£’m
64.5
13.8
14.8
93.1
(7.7)
85.4
(18.9)
(23.5)
(2.5)
40.5
(15.7)
24.8
2019
£’m
(17.1)
(4.1)
(3.8)
(25.0)
Cost of sales
2020
£’m
2019
£’m
Depreciation
2020
£’m
(258.5)
(58.6)
(63.6)
(380.7)
(270.3)
(67.2)
(70.6)
(408.1)
(12.8)
(2.5)
(5.1)
(20.4)
North America
UK & Ireland
International
Unallocated
Total
Segment assets
Segment liabilities1
Non-current assets2
2020
£’m
507.0
134.2
155.9
5.3
802.4
2019
£’m
530.5
142.2
153.8
6.2
832.7
2020
£’m
(133.5)
(33.1)
(61.1)
(131.6)
(359.3)
2019
£’m
(169.5)
(40.1)
(70.2)
(136.6)
(416.4)
2020
£’m
389.6
85.3
84.0
0.7
559.6
2019
£’m
422.6
92.1
85.9
1.0
601.6
1 Included within unallocated segment liabilities are centrally held borrowings of £129.1 million (2019: £133.0 million), provisions of
£0.4 million (2019: £0.4 million) and other liabilities of £2.1 million (2019: £3.2 million). Where borrowings can be directly attributed to
segments, these have been allocated.
2 Non-current assets exclude amounts relating to deferred tax assets.
Non-current assets of the International segment include £14.3 million (2019: £14.2 million) attributable to the UK.
139
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
3. Segment reporting continued
3.2.5 Capital expenditure
North America
UK & Ireland
International
Total
3.2.6 Other disclosures
North America
UK & Ireland
International
Total
Property, plant and
equipment
2020
£’m
2019
£’m
7.7
0.3
1.9
9.9
5.8
0.8
4.1
10.7
Goodwill
Intangible assets
2020
£’m
265.6
60.2
36.1
361.9
2019
£’m
275.7
60.2
35.4
371.3
2020
£’m
53.6
7.9
22.6
84.1
4. Operating profit
Operating profit is stated after charging the following:
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of acquired intangible assets
Impairment of acquired intangible assets
Amortisation of other intangible assets
Foreign exchange loss
Employee costs
Analysis of auditors’ remuneration:
Audit of Parent Company and consolidated financial statements
Audit of subsidiaries
Total audit
Audit-related assurance services
Total fees
Total audit fees
Total non-audit fees
Total fees
2019
£’m
68.8
11.3
23.9
104.0
Note
11
12
10
10
10
5
Intangible assets
2020
£’m
–
0.1
0.6
0.7
2019
£’m
0.2
–
0.5
0.7
Retirement benefit
obligations
2020
£’m
2019
£’m
(5.2)
–
(3.7)
(8.9)
(7.7)
–
(3.5)
(11.2)
2020
£’m
(12.7)
(7.7)
(18.8)
–
(1.5)
(1.3)
(138.3)
2019
£’m
(13.1)
(7.5)
(23.5)
(2.5)
(1.5)
(1.0)
(147.7)
2020
£’m
(0.3)
(0.6)
(0.9)
(0.1)
(1.0)
(0.9)
(0.1)
(1.0)
2019
£’m
(0.2)
(0.6)
(0.8)
(0.1)
(0.9)
(0.8)
(0.1)
(0.9)
Audit-related assurance services were in respect of the interim review and were £45,000 (2019: £50,000).
140
Tyman plcAnnual Report and Accounts 2020
5. Employees and employee costs
5.1 Accounting policy
5.1.1 Wages and salaries
Wages and salaries are recognised in the income statement as the employees’ services are rendered.
5.1.2 Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date,
or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises
termination benefits at the earlier of the following dates:
• when the Group can no longer withdraw the offer of those benefits; and
• when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of
termination benefits.
In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on
the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the
reporting period are discounted to their present value.
5.1.3 Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit sharing based on the expected level of payment
to employees in respect of the relevant financial year. The Group recognises a provision where contractually obliged or
where there is a past practice that has created a constructive obligation.
5.2 Number of employees
The average monthly number of employees during the financial year and total number of employees as at 31 December
2020 was:
Administration
Operations
Sales
Average
Total
2020
399
3,273
363
4,035
2019
408
3,318
420
4,146
2020
388
3,414
329
4,131
2019
393
3,111
408
3,912
The analysis above includes Directors.
5.3 Employment costs
Employment costs of employees, including Directors’ remuneration, during the year were as follows:
Wages and salaries
Social security costs
Share-based payments
Pension costs - defined contribution schemes
Pension costs - defined benefit schemes
Government support income
Note
23
21
21
2
2020
£’m
(124.8)
(10.8)
(0.1)
(3.6)
(0.7)
1.7
(138.3)
2019
£’m
(130.9)
(11.7)
(0.5)
(3.8)
(0.8)
–
(147.7)
Full details of Directors’ remuneration are set out in the Remuneration report on pages 100 to 121.
141
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
6. Exceptional items
6.1 Accounting policy
Where certain income or expense items recorded in the year are material by their size or incidence the Group presents
such items as exceptional within a separate line on the income statement except for those exceptional items that relate
to net finance costs and tax. Separate presentation provides an improved understanding of the elements of financial
performance during the year to facilitate comparison with prior periods and to assess the underlying trends in financial
performance.
Exceptional items include one-off redundancy and restructuring costs, transaction costs and integration costs
associated with merger and acquisition activity, as well as credits relating to profit on disposal of businesses, pension
remeasurements and property provision releases.
6.1.1 Key judgement: Exceptional items
The Group aims to be both consistent and clear in its recognition and disclosure of exceptional gains and losses.
Management judgement is required in assessing the nature and amounts of transactions that satisfy the conditions for
classification as an exceptional item.
6.2 Exceptional items
Footprint restructuring - costs
Footprint restructuring - credits
Footprint restructuring - net
M&A and integration - costs
M&A and integration – credits
M&A and integration - net
Loss on disposal of business
Impairment charges
Footprint restructuring
2020
£’m
–
0.2
0.2
(0.8)
0.6
(0.2)
(1.8)
–
(1.8)
2019
£’m
(7.1)
0.6
(6.5)
(5.3)
–
(5.3)
(1.7)
(5.4)
(18.9)
The footprint restructuring costs in prior periods related to directly attributable costs incurred in the multi-year North
American footprint consolidation project, as well as provisions for costs associated with the closure of the Fremont,
Nebraska facility and streamlining the international satellite operations which commenced in 2019. These projects were
completed in 2020, with the small credit arising due to the actual costs being slightly less than estimated.
M&A and integration
M&A and integration costs of £0.8 million relate to costs associated with the integration of businesses acquired in 2018,
predominantly Ashland. M&A credits of £0.6 million relate to the release of an excess warranty provision made on a
previous acquisition.
Loss on disposal of business
This charge relates to a loss on the disposal of the Ventrolla business, which was divested on 5 November 2020 for
nominal consideration, set out in note 25. The charge in 2019 relates to a reduction in expected deferred consideration
receivable in respect of the Rochester non-fenestration business which was disposed of in December 2018.
Impairment charges
Impairment charges in 2019 relate to the write down of assets and inventory associated with the slower than expected
uptake of the new door seal product in North America.
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Tyman plcAnnual Report and Accounts 2020
7. Finance income and costs
Finance income
Gain on revaluation of fair value hedge
Finance costs
Interest payable on bank loans, private placement notes and overdrafts
Interest payable on leases
Amortisation of borrowing costs
Pension interest cost
Loss on revaluation of fair value hedge
Net finance costs
8. Taxation
8.1 Accounting policy
Note
2020
£’m
2019
£’m
0.3
0.3
(8.9)
(2.8)
(0.5)
(0.2)
–
(12.4)
(12.1)
–
–
(11.1)
(3.0)
(0.5)
(0.3)
(0.8)
(15.7)
(15.7)
The income tax charge comprises current and deferred tax. Tax is recognised in the income statement, except to
the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is
recognised in the relevant statement.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the
balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial statements. No deferred tax liabilities are recognised if they arise
from the initial recognition of:
• goodwill; or
• an asset or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates that have been enacted or substantively enacted at the balance
sheet date and are expected to apply when the related deferred income tax asset is realised or when the deferred
income tax liability is settled.
Deferred income tax liabilities are provided on taxable temporary differences arising on investments in subsidiaries
except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in
subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is
sufficient taxable profit against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and where the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority. Offset may be applied either within the same tax entity or different taxable
entities where there is an intention to settle tax balances on a net basis.
8.1.1 Key source of estimation uncertainty: deferred tax assets
Estimation is required of temporary differences between the carrying amount of assets and liabilities and their tax
base. Deferred tax liabilities are recognised for all taxable temporary differences but, where deductible temporary
differences exist, management’s judgement is required as to whether a deferred tax asset should be recognised
based on the availability of future taxable profits. The deferred tax assets recoverable may differ from the amounts
recognised if actual taxable profits differ from management’s estimates.
The Group has made provisions for uncertain tax positions in accordance with IFRIC 23. At any point in time the Group
has open tax returns across the jurisdictions in which it operates that may give rise to different amounts of tax due.
Judgement is required in making an assessment of whether it is probable a tax authority will accept an uncertain tax
treatment. If it is not probable the position will be accepted, estimation is required in making a provision using either
the expected value approach or the most likely outcome approach. The amounts at which tax liabilities are finally
settled may differ from the amounts provided.
143
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
8. Taxation continued
8.2 Taxation – income statement and other comprehensive income
8.2.1 Tax on profit on ordinary activities
Current taxation
Current tax on profit for the year
Prior year adjustments
Total current taxation
Deferred taxation
Origination and reversal of temporary differences
Rate change adjustment
Prior year adjustments
Total deferred taxation
Income tax charge in the income statement
Total (charge)/credit relating to components of other comprehensive income
Current tax charge on translation
Current tax credit on share-based payments
Deferred tax credit on actuarial gains and losses
Deferred tax credit/(charge) on share-based payments
Deferred tax (charge)/credit on translation
Income tax (charge)/credit in the statement of other comprehensive income
Total current taxation
Total deferred taxation
Total taxation
Note
8.3
8.3
8.3
8.3
2020
£’m
(15.5)
1.4
(14.1)
3.6
0.1
–
3.7
(10.4)
(0.2)
0.1
0.1
0.1
(0.2)
(0.1)
(14.2)
3.7
(10.5)
2019
£’m
(15.0)
1.6
(13.4)
6.8
(0.1)
(0.4)
6.3
(7.1)
–
0.2
0.3
(0.1)
0.3
0.7
(13.2)
6.8
(6.4)
The Group’s UK profits for this financial year are taxed at the statutory rate of 19.0% (2019: 19.0%). The deferred tax
balances have been measured using the applicable enacted rates.
Taxation for other jurisdictions is calculated at rates prevailing in those respective jurisdictions.
8.2.2 Reconciliation of the total tax charge
The tax assessed for the year differs from the standard rate of tax in the UK of 19.0% (2019: 19.0%). The differences are
explained below:
Profit before taxation
Rate of corporation tax in the UK of 19.0% (2019: 19.0%)
Effects of:
Expenses not deductible for tax purposes
Overseas tax rate differences
Rate change adjustment
Prior year adjustments
Income tax charge in the income statement
2020
£’m
47.6
(9.0)
(0.1)
(2.8)
0.1
1.4
(10.4)
2019
£’m
24.8
(4.7)
(1.6)
(1.9)
(0.1)
1.2
(7.1)
144
Tyman plcAnnual Report and Accounts 2020
8. Taxation continued
8.3 Taxation – balance sheet
The analysis of deferred tax assets and deferred tax liabilities is as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
The net movement in deferred tax is as follows:
At 31 December
Change in accounting policy
At 1 January
Income statement credit
Rate change adjustment
Acquisitions of subsidiaries
Tax credit relating to components of other comprehensive income
Exchange difference
At 31 December
2020
£’m
16.3
(26.8)
(10.5)
2020
£’m
(14.1)
–
(14.1)
3.6
0.1
–
–
(0.1)
(10.5)
Note
8.2
8.2
8.2
The change in accounting policy in December 2019 relates to the adoption of IFRS 16.
The movement in deferred tax assets and liabilities during the year is as follows:
Deferred tax assets
At 1 January 2019
Income statement (charge)/credit
Rate change adjustment
Tax credit/(charge) relating to components of other
comprehensive income
Exchange difference
At 31 December 2019
Income statement charge
Rate change adjustment
Tax (charge)/credit relating to components of other
comprehensive income
Exchange difference
At 31 December 2020
Accelerated
tax
depreciation
£’m
0.9
(0.2)
–
Post-
retirement
benefit
provisions
£’m
1.8
–
–
Purchased
goodwill
£’m
6.1
(0.4)
–
Other
timing
differences
£’m
8.6
1.1
(0.2)
–
–
0.7
–
–
–
–
0.7
0.3
(0.1)
2.0
(0.2)
–
(0.3)
–
1.5
–
(0.1)
5.6
(0.4)
–
–
–
5.2
(0.1)
(0.5)
8.9
(0.3)
0.1
0.3
(0.1)
8.9
2019
£’m
17.2
(31.3)
(14.1)
2019
£’m
(20.8)
(0.5)
(21.3)
6.3
(0.1)
(0.1)
0.5
0.6
(14.1)
Total
£’m
17.4
0.5
(0.2)
0.2
(0.7)
17.2
(0.9)
0.1
–
(0.1)
16.3
145
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
8. Taxation continued
8.3 Taxation – balance sheet continued
Deferred tax liabilities
At 1 January 2019
Income statement credit
Rate change adjustment
Acquisitions of subsidiaries
Tax credit relating to components of other comprehensive income
Exchange difference
At 31 December 2019
Income statement credit
Rate change adjustment
Exchange difference
At 31 December 2020
Accelerated
tax
depreciation
£’m
(7.0)
0.3
0.2
–
–
0.2
(6.3)
0.7
–
0.2
(5.4)
Intangible
assets on
acquisition
£’m
(27.4)
5.1
–
(0.1)
–
0.8
(21.6)
3.8
(0.2)
–
(18.0)
Other
timing
differences
£’m
(4.3)
0.5
–
–
0.3
0.1
(3.4)
–
0.1
(0.1)
(3.4)
Total
£’m
(38.7)
5.9
0.2
(0.1)
0.3
1.1
(31.3)
4.5
(0.1)
0.1
(26.8)
The deferred tax asset arises from temporary differences arising in various tax jurisdictions, predominantly the US and
UK. Given both recent and forecast trading, the Directors are of the opinion that the level of profits in the foreseeable
future is more likely than not to be sufficient to recover these assets.
Deferred tax liabilities of £19.2 million (2019: £22.5 million) are expected to fall due after more than one year and
deferred tax assets of £10.8 million (2019: £16.5 million) are expected to be recovered after more than one year.
8.3.1 Factors that may affect future tax charges
The estimated tax losses within the Group are as follows:
Estimated tax losses:
Capital losses
Trading losses
Gross losses
2020
£’m
3.3
21.4
24.7
2019
£’m
4.0
21.3
25.3
Tax effect of losses
2020
£’m
(0.6)
(5.7)
(6.3)
2019
£’m
(0.7)
(5.6)
(6.3)
In accordance with the Group’s accounting policy, as the future use of these losses is uncertain none of these losses have
been recognised as a deferred tax asset.
At 31 December 2020, the Group has undistributed earnings of non-UK subsidiaries of £3.7 million (2019: £Nil) which, if
paid out as dividends, would be subject to tax in the hands of the recipient.
An assessable temporary difference exists, but no deferred tax liability has been recognised because the Group is able to
control the timing of any distributions from these subsidiaries and hence any tax consequences that may arise.
On 25 April 2019, the European Commission published its final decision regarding its investigation into the UK CFC rules,
concluding that the exemption applied to income derived from UK activities constituted a breach of EU State Aid rules. On
12 June 2019, the UK government applied to the EU General Court to annul this decision. Like many other multinational
Groups that have acted in accordance with UK legislation, the Group may be affected by the final outcome of this case.
The Group estimates the potential range of exposure is between £nil and £4 million. The Group does not consider that
a provision is required at this stage based on the level of uncertainty that exists over the potential liability. This is
considered to be a contingent liability at 31 December 2020.
146
Tyman plcAnnual Report and Accounts 2020
9. Earnings per share
9.1 Non-GAAP Alternative Performance Measures accounting policy
The Directors believe that the underlying profit and earnings per share measures provide additional useful information
to shareholders on the underlying performance of the business. These measures are consistent with how business
performance is measured internally. The adjusted profit before tax measure is not recognised under IFRS and may not be
comparable with adjusted profit measures used by other companies (see Alternative Performance Measures on page 183
to 188).
9.2 Earnings per share
Profit for the year
Basic earnings per share
Diluted earnings per share
2020
£’m
37.2
19.07p
19.00p
2019
£’m
17.7
9.08p
9.05p
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders
by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by the
weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary
shares that would be issued on the conversion of all the diluted potential ordinary shares into ordinary shares.
9.2.1 Weighted average number of shares
Weighted average number of shares (including treasury shares)
Treasury and Employee Benefit Trust shares
Weighted average number of shares - basic
Effect of dilutive potential ordinary shares - LTIP awards and options
Weighted average number of shares - diluted
2020
‘m
196.8
(1.7)
195.1
0.7
195.8
2019
‘m
196.8
(1.9)
194.9
0.8
195.7
9.2.2 Non-GAAP Alternative Performance Measure: Adjusted earnings per share
The Group presents an adjusted earnings per share measure which excludes the impact of exceptional items, certain
non-cash finance costs, amortisation of acquired intangible assets and certain non-recurring items. Adjusted earnings
per share has been calculated using the adjusted profit before taxation and using the same weighted average number of
shares in issue as the earnings per share calculation. See Alternative Performance Measures on page 184.
Adjusted profit after taxation is derived as follows:
Profit before taxation
Exceptional items
(Gain)/loss on revaluation of fair value hedge
Amortisation of borrowing costs
Amortisation of acquired intangible assets
Impairment of acquired intangible assets
Adjusted profit before taxation
Income tax charge
Add back: Adjusted tax effect1
Adjusted profit after taxation
2020
£’m
47.6
1.8
(0.3)
0.5
18.8
–
68.4
(10.4)
(4.9)
53.1
2019
£’m
24.8
18.9
0.8
0.5
23.5
2.5
71.0
(7.1)
(10.4)
53.5
1 Tax effect of exceptional items, amortisation of borrowings costs, amortisation of acquired intangible assets, gain or loss on revaluation
of fair value hedge and unwinding of discount on provisions.
Adjusted earnings per share is summarised as follows:
Basic adjusted earnings per share
Diluted adjusted earnings per share
2020
27.22p
27.12p
2019
27.46p
27.35p
147
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
10. Goodwill and intangible assets
10.1 Accounting policy
10.1.1 Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs
that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill
is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management
purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate
a potential impairment. The carrying amount of goodwill is compared to the recoverable amount, which is the higher of
value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is
not subsequently reversed.
10.1.2 Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment. On acquisition of businesses by the
Group, the Group recognises any separately identifiable intangible assets separately from goodwill, initially measuring
the intangible assets at fair value.
Purchased intangible assets acquired through a business combination, including purchased brands, customer
relationships, trademarks and licences, are initially measured at fair value and amortised on a straight-line basis over
their estimated useful economic lives as follows:
• Acquired brands – 5 to 20 years
• Customer relationships – 9 to 15 years
• Internally developed computer software – 5 to 10 years
• Purchased computer software – 3 to 4 years
Development costs that are directly attributable to the design and testing of identifiable and unique software products
controlled by the Group are recognised as intangible assets when the following criteria are met:
• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use it or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the software
product are available; and
• the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs capitalised as part of the software product include the software development employee costs
and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are
recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as
an asset in a subsequent period. Computer software development costs recognised as assets are amortised when the
intangible assets are in the location and condition necessary for it to be capable of operating in the manner intended by
management.
The estimated useful lives of acquired intangible assets are reviewed whenever events or circumstances indicate that
there has been a change in the expected pattern of consumption of the future economic benefits embodied in the
asset. Any amendments to the estimated useful lives of intangible assets are recorded as a change in estimate in the
period the change occurred.
10.1.3 Impairment of goodwill and intangible assets
Intangible assets, including goodwill, that have an indefinite useful life or intangible assets not ready to use are not
subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed
for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of the asset’s fair value less costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows.
Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting
date. Goodwill previously impaired cannot be reversed at a later date.
148
Tyman plcAnnual Report and Accounts 2020 10. Goodwill and intangible assets continued
10.1 Accounting policy continued
10.1.4 Critical accounting estimates and judgements: carrying amount of goodwill and intangibles
As at 31 December 2020, the Group had goodwill of £361.9 million (2019: £371.3 million) with intangible assets
amounting in total to £84.1 million (2019: £104.0 million). An impairment review using a value in use calculation has
been performed for each CGU. There is significant judgement involved in determining the appropriate assumptions to
use in the calculations, including the forecasted cash flows of each CGU and appropriate discount rates relative to the
Company’s cost of capital. These assumptions have been subjected to sensitivity analyses. Details of estimates used and
sensitivities in the impairment reviews are set out in this note.
10.2 Carrying amount of goodwill
Net carrying value
At 1 January 2019
Acquisitions of subsidiaries
Exchange difference
At 31 December 2019
Exchange difference
At 31 December 2020
£’m
382.1
0.9
(11.7)
371.3
(9.4)
361.9
Goodwill resulting from the acquisition of subsidiaries in 2019 relates to the acquisition of Y-Cam in February 2019.
Goodwill is monitored principally on an operating segment basis and the net book value of goodwill is allocated by CGU as
follows:
North America
UK & Ireland
International
10.2.1 Impairment tests for goodwill
Assumptions
2020
£’m
265.6
60.2
36.1
361.9
2019
£’m
275.7
60.2
35.4
371.3
The Group’s CGUs have been defined as each of the Group’s three operating divisions. Each division has its own senior
management and leadership team which holds the overall responsibility for the key decision making of each operating
unit within that division. In the opinion of the Directors, the divisions represent the smallest groups of assets that
independently generate cash flows for the Group. This conclusion is consistent with the approach adopted in previous
years.
The recoverable amounts of CGUs are determined from VIU calculations. VIU is determined by discounting the future pre-
tax cash flows generated from the continuing use of the CGU, using a pre-tax discount rate.
Cash flow projections, which have been reviewed and approved by the Board, are derived from the bottom up budget
for 2021 and the strategic plan for 2022 – 2023, extrapolated for a further two years at the estimated medium-term
growth rate for each CGU. The five-year cash flows were extrapolated using a long-term growth rate of 1.5% in order to
calculate the terminal recoverable amount.
Discount rates are estimated using pre-tax rates that reflect current market assessments of the time value of money and
the risk profiles of the CGUs.
The key assumptions used in the VIU calculations in each of the Group’s CGUs at 31 December are as follows:
North America
UK & Ireland
International
Average pre-tax
discount rate
2020
2019
12.8%
12.6%
14.1%
12.0%
11.9%
12.8%
Average EBITDA margin:
years one to five
2020
23.4%
16.0%
19.2%
2019
22.3%
15.5%
19.6%
149
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
10. Goodwill and intangible assets continued
10.2 Carrying amount of goodwill continued
Impairment review results: 2020
The Group experienced a downturn in performance in 2020 as a result of the COVID-19 pandemic. Trading has rebounded
ahead of expectation since operations resumed. The impact of COVID-19 was considered in the base impairment model.
A review of the carrying amount of goodwill and intangible assets across the Group has been carried out at year end in
light of current trading conditions and future prospects. The assumptions have been subjected to sensitivity analyses,
including sensitising revenue, gross margin and the discount rate. The annual impairment review did not result in any
impairment losses being recognised in 2020. Results are summarised as follows:
UK & Ireland: Revenue would need to decline by over 4% on average in each of the five years from 2021 to 2025 to
eliminate VIU headroom, or the average EBITDA margin for the next five years would need to decrease from 16.0% to
10.8%, to reduce VIU headroom to zero. This scenario is considered unlikely to occur given historic rates and strategic
initiatives in progress.
North America: Revenue would need to decline by over 7% on average in each of the five years from 2021 to 2025 to
eliminate VIU headroom, or the average EBITDA margin for the next five years would need to decrease from 23.4% to
17.0%, to reduce VIU headroom to zero. Given the current trading performance, the margin uplift potential of operational
improvement activities, this scenario is felt unlikely to occur.
International: Revenue would need to decline by approximately 6% on average in each of the five years from 2021 to
2025 to eliminate VIU headroom, or the average EBITDA margin for the next five years would need to decrease from
19.2% to 16.4% and continue at that level in perpetuity, for the VIU headroom of the International division to reduce
to zero. Given the current strong performance of the International division, the expected benefits from streamlining
International operations and growth from new product introductions, this is felt unlikely to occur.
10.3 Carrying amount of intangible assets
Computer
software
£’m
Acquired
brands
£’m
Customer
relationships
£’m
Note
Cost
At 1 January 2019
Additions
Disposals
Acquisitions of subsidiaries
Transfers from property, plant and equipment
Exchange difference
At 31 December 2019
Additions
Disposals
Exchange difference
At 31 December 2020
Accumulated amortisation
At 1 January 2019
Amortisation charge for the year
Disposals
Impairment
Exchange difference
At 31 December 2019
Amortisation charge for the year
Disposals
Exchange difference
At 31 December 2020
Net carrying value
At 1 January 2019
At 31 December 2019
At 31 December 2020
11
4
4
14.9
0.7
(1.8)
–
–
(0.6)
13.2
0.6
(0.4)
(0.2)
13.2
(5.5)
(1.5)
0.5
–
0.6
(5.9)
(1.5)
0.2
0.1
(7.1)
9.4
7.3
6.1
88.9
–
–
0.6
0.3
(3.3)
86.5
–
–
(0.7)
85.8
(48.1)
(6.4)
–
–
2.0
(52.5)
(5.7)
–
0.8
(57.4)
40.8
34.0
28.4
Total
£’m
370.7
0.7
(1.8)
0.6
0.3
(12.7)
357.8
0.6
(0.4)
(6.3)
351.7
(235.9)
(25.0)
0.5
(2.5)
9.1
(253.8)
(20.3)
0.2
6.3
266.9
–
–
–
–
(8.8)
258.1
–
–
(5.4)
252.7
(182.3)
(17.1)
–
(2.5)
6.5
(195.4)
(13.1)
–
5.4
(203.1)
(267.6)
84.6
62.7
49.6
134.8
104.0
84.1
The acquisition of subsidiaries in 2019 relates to the acquisition in Y-Cam in February 2019.
The amortisation charge for the year has been included in administrative expenses in the income statement and
comprises £18.8 million (2019: £23.5 million) relating to amortisation of acquired intangible assets and £1.5 million
(2019: £1.5 million) relating to amortisation of other intangible assets.
An impairment charge of £2.5 million was recognised on customer relationship intangibles in 2019 as a result of the
closure of the Fremont, Nebraska facility. No impairment has been recognised in 2020.
150
Tyman plcAnnual Report and Accounts 2020
11. Property, plant and equipment
11.1 Accounting policy
Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the assets. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the specific asset will flow to the Group and the cost of the subsequent item can be measured
reliably. The carrying amount of the replaced part is derecognised from the date of replacement. All other repairs and
maintenance are charged to the income statement during the financial period in which they are incurred.
Freehold land is not depreciated. Depreciation is provided on all other property, plant and equipment at rates calculated
to write off the cost less estimated residual value of each asset on a straight-line basis over its expected useful life, at the
following annual rates:
• Freehold buildings – 2.0 to 5.0%
• Plant and machinery – 7.5 to 33.0%
The carrying amounts of property, plant and equipment are reviewed for impairment periodically if events or changes in
circumstances indicate that the carrying amount may not be recoverable. The assets’ residual values, useful lives and
methods of depreciation are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in
the income statement.
11.2 Carrying amount of property, plant and equipment
Cost
At 1 January 2019
Additions
Disposals
Transfers from intangible assets
Exchange difference
At 31 December 2019
Additions
Disposals
Exchange difference
At 31 December 2020
Accumulated depreciation
At 1 January 2019
Depreciation charge for the year
Disposals
Impairment
Exchange difference
At 31 December 2019
Depreciation charge for the year
Disposals
Impairment
Exchange difference
At 31 December 2020
Net carrying value
At 1 January 2019
At 31 December 2019
At 31 December 2020
Note
10
4
4
Freehold
land and
buildings
£’m
Plant and
machinery
£’m
28.7
0.8
(0.7)
0.2
(2.4)
26.6
0.1
–
1.6
28.3
(8.4)
(0.8)
0.3
–
1.5
(7.4)
(0.8)
–
–
(1.2)
(9.4)
20.3
19.2
18.9
114.4
9.9
(11.8)
(0.5)
(8.0)
104.0
9.8
(13.4)
(2.8)
97.6
(58.6)
(12.3)
11.2
(4.3)
6.6
(57.4)
(11.9)
12.1
(0.5)
1.9
(55.8)
55.8
46.6
41.8
Total
£’m
143.1
10.7
(12.5)
(0.3)
(10.4)
130.6
9.9
(13.4)
(1.2)
125.9
(67.0)
(13.1)
11.5
(4.3)
8.1
(64.8)
(12.7)
12.1
(0.5)
0.7
(65.2)
76.1
65.8
60.7
151
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
11. Property, plant and equipment continued
11.2 Carrying amount of property, plant and equipment continued
Depreciation on property, plant, and equipment is included in the income statement as follows:
Cost of sales
Administrative expenses
Total depreciation charge
12. Leases
12.1 Accounting policy
Recognition
2020
£’m
9.7
3.0
12.7
2019
£’m
9.9
3.2
13.1
At inception, the Group assesses whether a contract is or contains a lease. This assessment involves the exercise of
judgement about whether it depends on a specified asset, whether the Group obtains substantially all the economic
benefits from the use of that asset, and whether the Group has the right to direct the use of the asset. The Group
recognises a right of use (ROU) asset and a lease liability at the commencement of the lease.
Short-term and low-value assets
The Group has elected not to recognise ROU assets and lease liabilities for leases where the total lease term is less
than or equal to 12 months, or for leases of assets with a value of less than £5,000. The payments for such leases are
recognised in the income statement on a straight-line basis over the lease term.
Non-lease components
Fees for components such as property taxes, maintenance, repairs and other services which are either variable or
transfer benefits separate to the Group’s right to use the asset are separated from lease components based on their
relative stand-alone selling price. These components are expensed in the income statement as incurred.
Measurement
Lease liabilities
Lease liabilities are initially measured at the present value of future lease payments at the commencement date. Lease
payments are discounted using the interest rate implicit in the lease, or where this cannot be readily determined, the
lessee’s incremental borrowing rate. Lease payments include the following payments due within the non-cancellable
term of the lease, as well as the term of any extension options where these are considered reasonably certain to be
exercised:
• fixed payments
• variable payments that depend on an index or rate
• the exercise price of purchase or termination options if it is considered reasonably certain these will be exercised
Subsequent to the commencement date, the lease liability is measured at the initial value, plus an interest charge
determined using the incremental borrowing rate, less lease payments made. The interest expense is recorded in
finance costs in the income statement. The liability is remeasured when future lease payments change, when the
exercise of extension or termination options becomes reasonably certain, or when the lease is modified.
Right of use assets
The ROU asset is initially measured at cost, being the value of the lease liability, plus the value of any lease payments
made at or before the commencement date, initial direct costs and the cost of any restoration obligations, less any
incentives received.
The ROU asset is subsequently measured at cost less accumulated depreciation and impairment losses. The ROU asset
is adjusted for any remeasurement of the lease liability. The ROU asset is subject to testing for impairment where there
are any impairment indicators.
12.2 The Group’s leasing arrangements
The Group leases manufacturing and warehousing facilities, offices, and various items of plant, machinery, and vehicles
used in its operations.
Leases of manufacturing and warehousing facilities and offices generally have lease terms between five and 25 years,
while plant, machinery, and vehicles generally have lease terms between six months and five years. The Group’s
obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from
assigning and subleasing the leased assets. There are several lease contracts that include extension and termination
options and variable lease payments, which are further discussed below.
152
Tyman plcAnnual Report and Accounts 2020 12. Leases continued
12.3 Carrying value of right of use assets
Set out below are the carrying amounts of right of use assets recognised and the movements during the year:
At 1 January 2019
Additions
Depreciation charge
Exchange difference
At 31 December 2019
Additions
Disposals
Depreciation charge
Revaluation impairment
Exchange difference
At 31 December 2020
Land and
buildings
£’m
62.8
1.9
(6.5)
(1.2)
57.0
2.9
(1.6)
(6.7)
(0.3)
(1.3)
50.0
Plant and
machinery
£’m
2.2
1.2
(1.0)
–
2.4
0.4
–
(1.0)
–
–
1.8
Total
£’m
65.0
3.1
(7.5)
(1.2)
59.4
3.3
(1.6)
(7.7)
(0.3)
(1.3)
51.8
12.4 Carrying value of lease liabilities
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the
movements during the year:
At 1 January
New leases
Lease disposals
Interest charge
Lease payments
Exchange difference
At 31 December
Current liabilities
Non-current liabilities
12.5 Amounts recognised in profit or loss
The following are the amounts recognised in profit or loss
Depreciation of RoU assets
Interest expense (included in finance cost)
Expense relating to short-term and low-value assets not included in lease liabilities (included
in cost of sales and administration expenses)
Expense relating to variable lease payments not included in lease liabilities (included in cost of
sales and administration expenses)
2020
£’m
(60.0)
(3.3)
1.6
(2.8)
9.2
1.5
(53.8)
2020
£’m
(5.4)
(48.4)
(53.8)
2020
£’m
(7.7)
(2.8)
2019
£’m
(63.7)
(3.1)
–
(3.0)
8.6
1.2
(60.0)
2019
£’m
(6.0)
(54.0)
(60.0)
2019
£’m
(7.5)
(3.0)
(1.0)
(1.3)
(0.5)
(12.0)
(0.5)
(12.3)
12.6 Extension and termination options
The Group has several lease contracts that include extension and termination options. These options are negotiated by
management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs.
As at 31 December 2020, potential future cash outflows of £68.1 million (2019: £63.0 million) (undiscounted) have
not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not
terminated).
153
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
13. Inventories
13.1 Accounting policy
Inventories are valued at the lower of cost and net realisable value. Cost is determined in accordance with the first-
in, first-out method. Cost includes the cost of materials determined on a purchase cost basis, direct labour and an
appropriate proportion of manufacturing overheads based on normal levels of activity. It excludes borrowing costs. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Where necessary, a provision is made to reduce cost to no more than net realisable value having regard to the nature
and condition of inventory, as well as its anticipated saleability.
13.1.1 Critical accounting estimates and judgements: carrying amount of inventories
The carrying amounts of inventories are stated with due allowance for excess, obsolete or slow-moving items. Group
management exercises judgement in assessing net realisable value. Provisions for slow-moving and obsolete inventory
are based on management’s assessment of the nature and condition of the inventory, including assumptions around
future demand, market conditions and new product development initiatives.
13.2 Carrying amount of inventories
Raw materials and consumables
Work in progress
Finished goods
2020
£’m
28.4
14.0
41.6
84.0
2019
£’m
26.5
14.0
48.1
88.6
The cost of materials charged to the income statement during the year was £242.7 million (2019: £265.3 million).
Inventories are stated net of an allowance for excess, obsolete or slow-moving items of £18.9 million
(2019: £19.9 million).
A credit in respect of a reduction in inventory provision of £0.9 million (2019: charge of £1.3 million) was recognised in
respect of inventories during the year.
There were no borrowings secured on the inventories of the Group (2019: £Nil).
14. Trade and other receivables
14.1 Accounting policy
Trade receivables are amounts due from customers for goods sold in the ordinary course of business. If collection is
expected in one year or less they are classified as current assets; otherwise they are presented as non-current assets.
Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the
trade receivables with the objective of collecting the contractual cash flows, and so it measures them subsequently at
amortised cost using the effective interest method, less appropriate allowances for estimated credit losses (provision
for impairment).
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.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables. To measure the expected credit losses, trade
receivables are grouped based on shared credit risk characteristics and the length of time overdue. An estimate is
made of the expected credit loss based on the Group’s history, existing market conditions as well as forward-looking
estimates at the end of each reporting period.
14.1.1 Critical accounting estimates and judgements: carrying amount of trade receivables
The trade receivables impairment provision requires the use of estimation techniques by Group management. The
estimate is made based on the assessments of the creditworthiness of customers, the ageing profile of receivables,
historical experience, and expectations about future market conditions.
The Group has considered the impact of the current uncertainty on the expected credit loss rates, and accordingly has
increased the expected credit loss rate.
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Tyman plcAnnual Report and Accounts 2020
14. Trade and other receivables continued
14.2 Carrying amounts of trade and other receivables
Trade receivables
Less: Provision for impairment of trade receivables
Trade receivables – net
Other receivables – net
Prepayments
2020
£’m
66.8
(3.7)
63.1
4.8
4.9
72.8
2019
£’m
63.6
(3.1)
60.5
9.2
6.6
76.3
All trade and other receivables are current. Other receivables is net of an expected credit loss provision of £1.8 million
(2019: £1.9 million) associated with deferred consideration receivable from a previous business disposal. The net carrying
amounts of trade and other receivables are considered to be a reasonable approximation of their fair values.
Impairment of trade receivables
An expected credit loss of £3.7 million has been recognised at 31 December 2020 (2019: £3.1 million).
The impairment loss allowance was determined as follows:
31 December 2020
Expected credit loss rate
Gross trade receivables
Loss allowance
31 December 2019
Expected credit loss rate
Gross trade receivables
Loss allowance
Not
yet due
2.0%
55.2
1.1
Not
yet due
1.1%
52.8
0.6
0–3
months
overdue
13.1%
9.9
1.3
0–3
months
overdue
13.5%
9.6
1.3
3–12
months
overdue
50.0%
0.8
0.4
3–12
months
overdue
100.0%
0.4
0.4
> 12
months
overdue
100.0%
0.9
0.9
> 12
months
overdue
100.0%
0.8
0.8
Movement in the allowance for impairment of trade receivables is as follows:
At 1 January
Provision for receivables impairment
Receivables written off during the year
Unused amounts reversed
Exchange difference
At 31 December
2020
£’m
(3.1)
(1.8)
0.5
0.7
–
(3.7)
Movements in the impairment allowance are recognised in administrative expenses in the income statement.
The carrying amounts of trade and other receivables are denominated in the following currencies:
US dollars
Sterling
Euros
Other currencies
2020
£’m
36.6
14.2
16.8
5.2
72.8
Total
5.5%
66.8
3.7
Total
4.9%
63.6
3.1
2019
£’m
(3.9)
(0.8)
0.7
0.8
0.1
(3.1)
2019
£’m
29.7
18.0
18.8
9.8
76.3
155
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
14. Trade and other receivables continued
14.3 Financial assets at fair value through profit or loss
The Group classifies equity investments as assets held at FVPL. See note 19.1 for financial instruments accounting policy.
Financial assets measured at FVPL are as follows:
Unlisted shares
2020
£’m
1.1
2019
£’m
1.1
There was no gain or loss recognised in profit or loss in the year. The maximum credit risk exposure at the end of the
year is the carrying amount of this investment.
15. Cash and cash equivalents
15.1 Accounting policy
In the consolidated statement of cash flows and balance sheet, cash and cash equivalents includes cash in hand,
deposits held at call with banks, other short-term, highly liquid investments with original maturities of three months or
less and bank overdrafts.
15.2 Carrying amounts of cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Bank overdrafts
The carrying amounts of cash and cash equivalents are denominated in the following currencies:
Sterling
US dollars
Euros
Other currencies
16. Trade and other payables
16.1 Accounting policy
2020
£’m
72.8
0.4
(3.5)
69.7
2020
£’m
19.2
24.6
16.6
9.3
69.7
2019
£’m
53.1
0.4
(4.5)
49.0
2019
£’m
9.6
19.2
10.9
9.3
49.0
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not,
they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
16.2 Carrying amounts of trade and other payables
Trade payables
Other taxes and social security costs
Accruals
Deferred income
Analysed as:
Current liabilities
Non-current liabilities
2020
£’m
(55.1)
(6.5)
(22.3)
(0.9)
(84.8)
(84.4)
(0.4)
(84.8)
2019
£’m
(46.6)
(7.9)
(30.4)
(0.4)
(85.3)
(84.9)
(0.4)
(85.3)
The carrying amounts of trade and other payables are considered to be a reasonable approximation of their fair values.
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Tyman plcAnnual Report and Accounts 2020
16. Trade and other payables continued
16.2 Carrying amounts of trade and other payables continued
The carrying amounts of trade and other payables are denominated in the following currencies:
US dollars
Sterling
Euros
Other currencies
17. Derivative financial instruments
17.1 Accounting policy
2020
£’m
(44.5)
(14.8)
(19.8)
(5.7)
(84.8)
2019
£’m
(41.9)
(17.9)
(16.7)
(8.8)
(85.3)
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is
entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when fair value is
positive and as liabilities when fair value is negative.
The Group designates certain derivatives as either:
• fair value hedge: hedges of the fair value of recognised assets or liabilities or a firm commitment;
• cash flow hedge: hedges of a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction; or
• net investment hedge: hedges of a net investment in a foreign operation.
For those instruments designated as hedges, the Group documents at the inception of the transaction the relationship
between hedging instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on
an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting
changes in fair values or cash flows of hedged items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged
item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less
than 12 months.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are
recognised immediately in the income statement.
17.1.1 Fair value hedges
Changes in the fair value of derivatives designated and qualifying as fair value hedges are recorded in the income
statement, together with any changes in fair value of the hedged asset or liability that are attributable to the hedged risk.
17.1.2 Cash flow hedges
The effective portion of changes in the fair value of the derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised
immediately in the income statement.
Amounts accumulated in equity are reclassified to the income statement in the period in which the hedged item
affects profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when
the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer
expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income
statement.
17.1.3 Net investment hedge
Hedges of net investments in foreign operations are accounted for in a similar manner to cash flow hedges. Any gain
or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive
income. The gain or loss relating to the ineffective portion is recognised in the income statement. Gains and losses
accumulated in equity are included in the income statement when the foreign operation is partially disposed of or sold.
157
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
17. Derivative financial instruments continued
17.2 Carrying amount of derivative financial instruments continued
Forward exchange contracts - fair value hedges
Interest rate swaps - cash flow hedges
Total
Analysed as:
Current
Total
2020
2019
Assets
£’m
Liabilities
£’m
Assets
£’m
Liabilities
£’m
–
–
–
–
–
(0.2)
–
(0.2)
(0.2)
(0.2)
–
–
–
–
–
(0.5)
(0.2)
(0.7)
(0.7)
(0.7)
The carrying amounts of derivative financial instruments are denominated in the following currencies:
Sterling
US dollars
Other currencies
17.2.1 Fair value hedges
2020
2019
Assets
£’m
Liabilities
£’m
Assets
£’m
Liabilities
£’m
–
–
–
–
–
(0.1)
(0.1)
(0.2)
–
–
–
–
(0.1)
(0.5)
(0.1)
(0.7)
The notional principal amount of the outstanding forward foreign exchange contracts at 31 December 2020 was
£23.7 million (2019: £34.1 million). The hedge ratio of foreign exchange contracts is 1:1, holding all other variables
constant.
During the year a gain of £0.3 million (2019: loss of £0.8 million) was recognised in the income statement for the changes
in value of the fair value hedges.
The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates
during the next 12 months.
17.2.2 Cash flow hedges
The notional principal amounts of the outstanding interest rate swap at 31 December 2020 were £Nil (2019:
£18.5 million).
During the year a gain of £0.3 million (2019: £Nil) was recognised in the statement of comprehensive income and £Nil
(2019: £Nil) in the income statement for the ineffective portion of changes in the value of cash flow hedges.
Details of the interest rate swaps are as follows:
At 31 December 2019
Swaps – Sterling
Swaps – US dollar
Notional
amount
’m
Fixed
interest rate
paid
Floating
interest rate
received
£6.0
$16.5
1.7490%
1.7225%
0.7980%
0.8800%
Fair
value
’m
£(0.1)
$(0.3)
The maturity date of the swaps was 17 June 2020 and therefore there are no interest rate swaps as at 31 December
2020.
158
Tyman plcAnnual Report and Accounts 2020
17. Derivative financial instruments continued
17.2 Carrying amount of derivative financial instruments continued
17.2.3 Net investment hedges
The Group uses foreign currency-denominated debt to hedge the value of its US dollar and euro-denominated net assets
which may change due to respective movements in US dollar and euro exchange rates. At 31 December 2020, the value
of the net investment hedges was £129.5 million (2019: £133.9 million). These hedges are considered highly effective and
no ineffective portion has been recognised in the income statement.
The hedge ratio of each net investment hedge was 1:1, holding all other variables constant. The weighted average
hedged rate of the US net investment hedge was 1.284 (2019: 1.277) and of the EUR net investment hedge was 1.125
(2019: 1.141).
The effect of the net investment hedges on the Group’s financial statements for the year ended 31 December 2020 is
summarised as follows:
Loan carrying amount (£m)
Loan carrying amount ($m/€m)
Hedge ratio (holding all other variables constant)
Change in carrying amount of loans as a result of foreign currency
movements recognised in OCI
Change in value of hedged item used to determine hedge
effectiveness
18. Interest-bearing loans and borrowings
18.1 Accounting policy
2020
US net
investment
hedge
2020
EUR net
investment
hedge
2019
US net
investment
hedge
2019
EUR net
investment
hedge
(81.1)
(110.7)
1:1
2.7
(48.4)
(53.9)
1:1
(88.4)
(116.5)
1:1
(45.5)
(53.5)
1:1
(2.5)
3.1
2.6
(2.7)
2.5
(3.1)
(2.6)
Interest-bearing loans and borrowings are recognised initially at fair value, net of transaction costs incurred. Interest-
bearing loans and borrowings are subsequently carried at amortised cost using the effective interest method.
18.2 Carrying amounts of interest-bearing loans and borrowings
Unsecured borrowings at amortised cost:
Bank borrowings
Senior notes
Capitalised borrowing costs
Borrowings
Lease liabilities
Total interest-bearing liabilities
Analysed as:
Current liabilities
Non-current liabilities
Note
2020
£’m
2019
£’m
12
(97.0)
(73.3)
1.2
(169.1)
(53.8)
(222.9)
(45.7)
(177.2)
(222.9)
(137.7)
(75.8)
1.7
(211.8)
(60.0)
(271.8)
(6.3)
(265.5)
(271.8)
There were no defaults in interest payments in the year under the terms of the existing loan agreements.
Non-cash movements in the carrying amount of interest-bearing loans and borrowings relate to the amortisation of
borrowing costs (see note 7).
The carrying amounts of interest-bearing loans and borrowings are denominated in the following currencies:
Sterling
US dollars
Euros
2020
£’m
1.2
(108.2)
(62.1)
(169.1)
2019
£’m
1.7
(146.7)
(66.8)
(211.8)
159
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
18. Interest-bearing loans and borrowings continued
18.2 Carrying amounts of interest-bearing loans and borrowings continued
18.2.1 Bank borrowings
Multi-currency revolving credit facility
On 19 February 2018, the Group entered into the 2018 Facility. The 2018 Facility gives the Group access to up to
£310.0 million of borrowings and comprises a £240.0 million committed revolving credit facility and a £70.0 million
uncommitted accordion facility, expiring in February 2024. The banking facility is unsecured and is guaranteed by Tyman
plc and its principal subsidiary undertakings.
As at 31 December 2020, the Group has undrawn amounts committed under the multi-currency revolving credit facility of
£143.1 million (2019: £102.8 million). These amounts are floating rate commitments which expire beyond 12 months.
Other borrowings
The Group acquired bank borrowings as part of the acquisition of Reguitti. At 31 December 2020, the remaining facility
has a carrying value of £0.2 million (2019: £0.5 million) and an undrawn value of £Nil (2019: £Nil). The facility has a
maturity of 22 May 2022 and is unsecured.
18.2.2 Private placement notes
On 19 November 2014, the Group issued private debt placement notes with US financial institutions totalling
US$100.0 million.
The debt placement is unsecured and comprises US$55.0 million debt with a seven-year maturity from inception at a
coupon of 4.97% and US$45.0 million with a 10-year maturity from inception at a coupon of 5.37%. The US$55.0 million
is due in November 2021 and is therefore current. The US$45.0 million is due in 2024.
2020
£’m
(169.1)
(53.8)
69.7
(153.2)
Cash
Borrowings
Lease
liabilities
51.9
–
(0.9)
–
–
–
(2.0)
–
49.0
22.1
(1.5)
–
–
–
0.1
–
69.7
(260.7)
40.4
–
–
–
–
9.0
(0.5)
(211.8)
44.0
–
–
–
–
(0.8)
(0.5)
(169.1)
(63.7)
8.6
–
(3.0)
(0.1)
(3.0)
1.2
–
(60.0)
9.2
–
1.6
(3.3)
(2.8)
1.5
–
(53.8)
2019
£’m
(211.8)
(60.0)
49.0
(222.8)
Total
(272.5)
49.0
(0.9)
(3.0)
(0.1)
(3.0)
8.2
(0.5)
(222.8)
75.3
(1.5)
1.6
(3.3)
(2.8)
0.8
(0.5)
(153.2)
18.3 Net debt
18.3.1 Net debt summary
Borrowings
Lease liabilities
Cash
At 31 December
18.3.2 Net debt reconciliation
At 1 January 2019
Cash flows
Acquisitions
New leases
Lease modifications
Lease interest accretion
Foreign exchange adjustments
Amortisation of borrowing costs
At 31 December 2019
Cash flows
Acquisitions
Disposals
New leases
Lease interest accretion
Foreign exchange adjustments
Amortisation of borrowing costs
At 31 December 2020
160
Tyman plcAnnual Report and Accounts 2020
19. Financial risk management and financial instruments
19.1 Accounting policy
Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the
contractual provisions of the instrument and are generally derecognised when the contract that gives rise to it is
settled, sold, cancelled or expires.
19.1.1 Financial assets
Classification
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value through profit or loss; and
• those to be measured subsequently at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms
of the cash flows. For assets measured at fair value, gains and losses will be recorded in profit or loss.
Initial measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not
at 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.
Subsequent measurement
Debt instruments
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 two measurement categories into which the Group classifies its debt
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 administrative expenses in the income statement, together with
foreign exchange gains and losses.
• FVPL: Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are
measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit
or loss in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value, with any gains or losses recorded in profit or loss.
Impairment
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. For policy on impairment of trade receivables, see note 14.
19.1.2 Financial liabilities held at amortised cost
Financial liabilities held at amortised cost comprise “trade and other payables” (see note 16) and “interest-bearing
loans and borrowings” (see note 18).
19.2 Financial instruments: by category
Assets as per balance sheet:
31 December 2020
31 December 2019
Financial
assets
at amortised
cost
£’m
Financial
assets
at fair value
through
profit or loss
£’m
Trade and other
receivables1
Financial assets at FVPL
Cash and cash
equivalents
Total financial assets
1 Excludes non-financial assets.
63.1
–
69.7
132.8
–
1.1
–
1.1
Financial
assets
at amortised
cost
£’m
Financial
assets
at fair value
through
profit or loss
£’m
60.5
–
49.0
109.5
–
1.1
–
1.1
Total
£’m
63.1
1.1
69.7
133.9
Total
£’m
60.5
1.1
49.0
110.6
161
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Notes to the financial statements CONTINUED
For the year ended 31 December 2020
19. Financial risk management and financial instruments continued
19.2 Financial instruments: by category continued
31 December 2020
31 December 2019
Derivatives
used for
hedging
£’m
–
–
(0.2)
–
(0.2)
Other
financial
liabilities
at cost
£’m
(170.3)
(53.8)
–
(77.4)
(301.5)
Derivatives
used for
hedging
£’m
Other
financial
liabilities at
cost
£’m
–
–
(0.7)
–
(0.7)
(213.5)
(60.0)
–
(77.0)
(350.5)
Total
£’m
(170.3)
(53.8)
(0.2)
(77.4)
(301.7)
Total
£’m
(213.5)
(60.0)
(0.7)
(77.0)
(351.2)
Borrowings2
Lease liabilities
Derivative financial instruments
Trade and other payables3
Total financial liabilities
2 Excludes capitalised borrowing costs of £1.2 million (2019: £1.7 million).
3 Excludes non-financial liabilities.
19.3 Financial instruments: risk profile
19.3.1 Capital risk management
The Group manages its capital structure to ensure that it will be able to continue as a going concern. The capital
structure of the Group consists of cash and cash equivalents (note 15), interest-bearing loans and borrowings (see note
18) and equity attributable to the shareholders of the Company as disclosed in the consolidated statement of changes in
equity.
19.3.2 Financial management
The Group’s principal financial instruments comprise bank loans, private debt and cash and short-term deposits. The
Group has various other financial instruments such as trade receivables and trade payables that arise directly from its
operations. No trading in financial instruments is undertaken.
The Board reviews and agrees policies for managing each financial instrument risk and they are summarised below.
19.3.3 Liquidity and credit risk
The Group maintains sufficient cash and marketable securities and the availability of funding through an adequate
amount of credit facilities. Management monitors rolling forecasts of the Group’s liquidity on the basis of expected cash
flow.
The Group manages liquidity risk by the pooling of cash resources and depositing funds available for investment in
approved financial instruments with financial institutions. Counterparty risk with respect to cash and cash equivalents is
managed by only investing in banks and financial instruments with independently assessed credit ratings of at least A2
as published by Standard and Poor’s. Individual risk limits are assessed by management based on the external ratings.
Management does not expect any losses from the non-performance of these counterparties.
Credit risk is also attributable to the Group’s exposure to trade receivables due from customers. Management assesses
the credit quality of customers taking into account their financial position, past experience and other factors. In order to
mitigate credit risk the Group utilises credit insurance in those areas of its operations where such insurance is available.
In areas where such insurance is not available or it is uneconomical to purchase, management monitors the utilisation
of credit limits by customers, identified either individually or by Group, and incorporates this information in credit risk
controls. The diverse nature of the Group’s customer base means that the Group has no significant concentrations of
credit risk.
Trade receivables are presented in the balance sheet net of allowances for doubtful receivables, estimated by the Group’s
management based on prior experience and their assessment of the current economic environment.
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet
date. Management considers all financial assets that are not impaired for each of the reporting dates under review are of
good credit quality, including those that are past due.
During the year ended 31 December 2020 the Group operated within its borrowing facilities. A temporary relaxation
of the leverage covenant from 3.0x to 3.5x at December 2020 and to 4.0x at June 2021 was agreed due to uncertainty
arising from COVID-19.
162
Tyman plcAnnual Report and Accounts 2020
19. Financial risk management and financial instruments continued
19.3 Financial instruments: risk profile continued
19.3.3 Liquidity and credit risk continued
The table below analyses the contractual undiscounted cash flows of the Group’s financial liabilities into relevant maturity
groupings based on the contractual maturity date.
Borrowings1
Lease liabilities
Derivative financial instruments
Trade and other payables2
At 31 December 2020
Borrowings1
Lease liabilities
Derivative financial instruments
Trade and other payables2
At 31 December 2019
Later than
one year
but not
later than
five years
£’m
Not
later than
one year
£’m
Later than
five years
£’m
(43.9)
(8.0)
(0.2)
(77.4)
(129.5)
–
(8.7)
(0.5)
(77.0)
(86.2)
(135.0)
(24.5)
–
(44.2)
–
–
(159.5)
(137.7)
(25.3)
(0.2)
–
(163.2)
–
–
(44.2)
(79.7)
(50.1)
–
–
(129.8)
1 Excludes capitalised borrowing costs of £1.2 million (2019: £1.7 million).
2 Excludes non-financial liabilities.
19.3.4 Interest rate risk
The interest rate profile of the Group’s borrowings as at 31 December 2020 was as follows:
Sterling
US dollars
Euros
Other
At 31 December 2020
Sterling
US dollars
Euros
Other
At 31 December 2019
Floating rate
borrowings1
£’m
Fixed rate
borrowings2
£’m
Fixed
rate lease
liabilities
£m
–
(34.9)
(62.1)
–
(97.0)
–
(70.9)
(66.8)
–
(137.7)
–
(73.4)
–
–
(73.4)
–
(75.8)
–
–
(75.8)
(14.9)
(33.4)
(1.6)
(3.9)
(53.8)
(17.0)
(36.5)
(2.3)
(4.2)
(60.0)
Total
£’m
(178.9)
(76.7)
(0.2)
(77.4)
(333.2)
(217.4)
(84.1)
(0.7)
(77.0)
(379.2)
Total
£’m
(14.9)
(141.7)
(63.7)
(3.9)
(224.2)
(17.0)
(183.2)
(69.1)
(4.2)
(273.5)
1 Excludes capitalised borrowing costs of £1.1 million (2019: £1.5 million).
2 Excludes capitalised borrowing costs of £0.1 million (2019: £0.1 million).
The interest rate on the floating bank loans is linked to LIBOR. The Board periodically reviews any exposure the Group
may have to interest rate fluctuations, and, where appropriate, considers use of interest rate swaps to fix the cost of a
proportion of these floating rate borrowings.
Sterling
US dollars
Euros
At 31 December 2020
Sterling
US dollars
Euros
At 31 December 2019
1 Excludes capitalised borrowing costs of £1.1 million (2019: £1.5 million).
Floating rate
borrowings1
£’m
Covered by
swaps
£’m
Swap fixed
rate
–
(34.9)
(62.1)
(97.0)
–
(70.9)
(66.8)
(137.7)
–
–
–
–
(6.0)
(13.0)
–
(19.0)
n/a
n/a
n/a
1.7490%
1.7225%
n/a
163
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
19. Financial risk management and financial instruments continued
19.3 Financial instruments: risk profile continued
19.3.4 Interest rate risk continued
Interest rate sensitivity
The impact of a 50 basis point movement in floating interest rates on borrowings would have a c. £0.8 million (2019:
£2.1 million) impact on profits. This impact would be reduced by the tax effect on such a change.
Interest rate risk of financial assets
The weighted average interest rate received on deposited funds was Nil% during the year (2019: Nil%).
19.3.5 Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US dollar and the euro. Foreign exchange risk arises from future commercial and financing
transactions, recognised assets and liabilities denominated in a currency that is not the Group’s functional currency and
net investments in overseas entities.
The Group includes entities which transact in currencies other than sterling and that have functional currencies other
than sterling, whose net assets are therefore subject to currency translation risk. The Group borrows in local currencies
as appropriate to minimise the impact of this risk on the balance sheet. See details of net investment hedges in note 17.
Foreign currency exchange rate sensitivity
Foreign currency financial assets and liabilities, translated into sterling at the closing rate, are as follows:
At 31 December 2020
Financial assets
Trade and other receivables1
Financial assets at FVPL
Cash and cash equivalents
Total financial assets
Financial liabilities
Borrowings2
Lease liabilities
Derivative financial instruments
Trade and other payables3
Total financial liabilities
Potential impact on profit or loss - (loss)/gain
10% increase in functional currency
10% decrease in functional currency
Potential impact on other comprehensive income –
gain/(loss)
10% increase in functional currency
10% decrease in functional currency
Sterling
£’m
US dollars
£’m
Euros
£’m
Other
£’m
Total
£’m
12.3
–
19.2
31.5
–
(14.9)
–
(13.3)
(28.2)
31.4
1.1
24.6
57.1
(108.2)
(33.4)
(0.1)
(41.1)
(182.8)
(2.3)
2.5
15.8
–
16.6
32.4
(62.1)
(1.6)
–
(17.9)
(81.6)
(0.4)
0.3
3.6
–
9.3
12.9
–
(3.9)
(0.1)
(5.0)
(9.0)
(0.4)
0.5
63.8
1.1
69.7
134.6
(170.3)
(53.8)
(0.2)
(77.3)
(301.6)
(3.1)
3.3
11.6
(14.1)
4.5
(5.5)
(0.3)
0.4
15.8
(19.2)
164
Tyman plcAnnual Report and Accounts 2020 19. Financial risk management and financial instruments continued
19.3 Financial instruments: risk profile continued
19.3.5 Foreign currency risk continued
At 31 December 2019
Financial assets
Trade and other receivables1
Financial assets at FVPL
Cash and cash equivalents
Total financial assets
Financial liabilities
Borrowings2
Lease liabilities
Derivative financial instruments
Trade and other payables3
Total financial liabilities
Potential impact on profit or loss - (loss)/gain
10% increase in functional currency
10% decrease in functional currency
Potential impact on other comprehensive income -
gain/(loss)
10% increase in functional currency
10% decrease in functional currency
1 Excludes non-financial assets.
Sterling
£’m
US dollars
£’m
Euros
£’m
Other
£’m
14.8
–
9.6
24.4
–
(17.0)
(0.1)
(16.0)
(33.1)
24.3
1.1
19.2
44.6
(146.7)
(36.4)
(0.5)
(41.4)
(225.0)
(0.8)
0.1
17.2
–
10.9
28.1
(66.8)
(2.3)
–
(14.8)
(83.9)
–
0.4
16.5
(20.2)
5.1
(6.2)
4.2
–
9.3
13.5
–
(4.3)
(0.1)
(4.8)
(9.2)
(0.2)
0.3
(0.3)
0.4
Total
£’m
60.5
1.1
49.0
110.6
(213.5)
(60.0)
(0.7)
(77.0)
(351.2)
(1.0)
0.8
21.3
(26.0)
2 Excludes capitalised borrowing costs of £1.2 million (2019: £1.7 million).
3 Excludes non-financial liabilities.
The 10% movements in exchange rates are considered to be indicative of a reasonable annual movement, based on
historical average movements in exchange rates.
19.3.6 Capital management
The Group’s capital management objectives are to safeguard the Group’s ability to continue as a going concern so as to
provide returns to shareholders and benefits to stakeholders. The Group defines its capital as total equity plus net debt.
In maintaining the capital structure, the Group may adjust the amount paid as dividends to shareholders, issue new
shares or dispose of assets to reduce debt.
The Group monitors its financial capacity by reference to its financial covenant ratios, including Leverage and interest
cover. If the Group fails to meet its key financial covenant ratios required by its lenders, this could impact the Group’s
average interest rate of borrowings and the future availability of credit to the Group.
The Group is in compliance with the financial covenants contained within its credit facilities, and has been in compliance
throughout the financial year.
Borrowings (including lease liabilities)1
Less: Cash and cash equivalents
Total equity
Total capital
1 Excludes capitalised borrowing costs of £1.2 million (2019: £1.7 million).
18
15
2020
£’m
224.1
(69.7)
443.1
597.5
2019
£’m
273.5
(49.0)
416.3
640.8
165
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
19. Financial risk management and financial instruments continued
19.4 Fair value estimation
The Group’s derivative financial instrument used for hedging is measured at fair value. The Group uses the following
hierarchy for measuring fair value:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly or indirectly.
• Level 3: inputs for the asset or liability that are not based on observable market data.
Derivatives shown at fair value in the balance sheet have been valued by reference to level 2 techniques described above.
There were no transfers between levels during the year.
19.4.1 Valuation techniques used to derive level 2 fair values
Level 2 hedging derivatives comprise interest rate swaps fair valued using forward interest rates extracted from
observable yield curves and foreign exchange contracts valued with reference to the period end exchange rate.
The effects of discounting are generally insignificant for level 2 derivatives. The fair value of the derivative financial
instruments at 31 December 2020 is a net liability of £0.2 million (2019: £0.7 million).
There were no changes in valuation techniques during the year.
19.4.2 Group’s valuation process
The Group has a team that performs the valuations of financial assets required for financial reporting purposes. This
team reports to the CFO and the Audit and Risk Committee.
19.4.3 Fair value of financial assets and liabilities measured at amortised cost
The fair values of borrowings are as follows:
Current liabilities
Non-current liabilities
Fair value of borrowings
The fair values of the following financial assets and liabilities approximate their carrying amounts:
2020
£’m
(45.7)
(177.2)
(222.9)
2019
£’m
(6.2)
(265.4)
(271.6)
• trade and other receivables;
• cash and cash equivalents; and
• trade and other payables.
20. Provisions
20.1 Accounting policy
Provisions are recognised when:
• the Group has a present legal or constructive obligation as a result of a past event;
• it is probable that an outflow of resources will be required to settle the obligation; and
• a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision
is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value
of those cash flows using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation.
The increase in the provision due to the passage of time is recognised in the income statement within net finance
costs. Provisions are not recognised for future operating losses.
20.1.1 Critical accounting estimates and judgements: carrying amount of provisions
Provisions, by their nature, are uncertain and highly judgemental. Provisions are measured at the Directors’ best
estimate of the expenditure required to settle the obligation at the balance sheet date based on the nature of the
provisions, the potential outcomes, any developments relating to specific claims and previous experience.
166
Tyman plcAnnual Report and Accounts 2020
20. Provisions
20.2 Carrying amounts of provisions
At 1 January 2019
(Charged)/credited to the income statement
Additional provisions in the year
Unused amounts reversed
Utilised in the year
Exchange difference
At 31 December 2019
(Charged)/credited to the income statement
Additional provisions in the year
Unused amounts reversed
Utilised in the year
Exchange difference
At 31 December 2020
Analysed as:
Current liabilities
Non-current liabilities
Property
related
£’m
(3.2)
Restructuring
£’m
(7.0)
Warranty
£’m
(2.5)
Other
£’m
(2.4)
(0.1)
–
–
–
(3.3)
(0.1)
–
–
–
(3.4)
(1.3)
1.0
6.4
–
(0.9)
0.1
–
0.3
–
(0.5)
(0.8)
–
0.1
0.1
(3.1)
(0.5)
0.7
–
0.1
(2.8)
–
–
–
0.1
(2.3)
–
–
0.1
–
(2.2)
2020
£’m
(1.3)
(7.6)
(8.9)
Total
£’m
(15.1)
(2.2)
1.0
6.5
0.2
(9.6)
(0.5)
0.7
0.4
0.1
(8.9)
2019
£’m
(2.5)
(7.1)
(9.6)
Current liabilities are those aspects of provisions that are expected to be utilised within the next 12 months.
20.2.1 Property related
Property provisions include provisions for site restoration costs of £1.3 million (2019: £1.3 million) and leasehold
dilapidations of £2.1 million (2019: £2.0 million).
The provision for leasehold dilapidations relates to contractual obligations to reinstate leasehold properties to their
original state of repair. Property provisions are expected to be utilised by 2042.
20.2.2 Restructuring
Restructuring provisions utilised in the year and remaining at year end predominantly relate to the streamlining of the
international satellite operations which commenced in late 2019. This included the exit of manufacturing in Australia and
China, with these markets transitioned to distribution centres and closure of the distribution facility in Singapore, with
this region now served as an export market. The majority of the remaining provisions are expected to be utilised in the
second half of 2021 with the remaining half being utilised in 2022.
20.2.3 Warranty
Warranty provisions are calculated based on historical experience of the ultimate cost of settling product warranty claims
and potential claims. These warranty provisions are expected to be utilised by 2025. The unused amounts reversed
during the year predominantly relates to a reduction in a provision made on a previous acquisition, following a revision to
assumptions.
20.2.4 Other
Included in other provisions is £0.4 million (2019: £0.4 million) relating to the tax consequences of international
intragroup transactions for which the fiscal authorities may be expected to adopt opposing treatments in respect of
revenue and cost recognition. The remaining £1.7 million (2019: £1.9 million) relates to various provisions for potential
obligations mainly arising from the Group’s M&A activity. These other provisions are expected to be utilised by 2025.
167
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
21. Retirement benefit obligations
21.1 Accounting policy
The Group operates both defined contribution and defined benefit pension plans and post-employment medical plans.
21.1.1 Pension obligations
Defined contribution plans
A defined contribution plan is a pension plan under which the Group pays fixed contributions into publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group recognises
contributions as an employee benefit expense when they are due and has no further payment obligations once the
contributions have been paid. The Group has no legal or constructive obligation 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 or prior
periods. Prepaid contributions are recognised as an asset to the extent that a cash refund in the future is available.
Defined benefit plans
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an
amount of pension benefit an employee will receive on retirement. This amount is usually dependent on one or more
factors such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the
defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be
paid, and that have terms to maturity approximating to the terms of the related pension obligation. In countries where
there is no deep market in such bonds, the market rates on government bonds are used.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they arise.
Past service costs are recognised immediately in income.
21.1.2 Other post-employment obligations
Some Group companies provide post-retirement healthcare benefits to their retirees. The entitlement to these benefits
is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum
service period. The expected costs of these benefits are accrued over the period of employment using the same
accounting methodology as used for defined benefit pension plans.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged
or credited to equity in other comprehensive income in the period in which they arise. These obligations are valued
annually by independent qualified actuaries.
21.1.3 Key source of estimation uncertainty: defined benefit pension and post-retirement
benefit schemes
Defined benefit obligations are calculated using a number of assumptions, including future salary increases, increases
to pension benefits, mortality rates and, in the case of post-employment medical benefits, the expected rate of
increase in medical costs. The plan assets consist largely of listed securities and their fair values are subject to
fluctuation in response to changes in market conditions. Effects of changes in the actuarial assumptions underlying
the benefit obligation, effects of changes in the discount rate applicable to the benefit obligation and effects of
differences between the expected and actual return on the plan assets are classified as actuarial gains and losses and
are recognised directly in equity. Further actuarial gains and losses will be recognised during the next financial year. An
analysis of the assumptions that will be used by management to determine the cost of defined benefit plans that will be
recognised in the income statement in the next financial year is presented in this note.
21.2 Defined contribution pension schemes
The Group operates a number of defined contribution pension schemes, the assets of which are held externally to
the Group in separate trustee-administered funds. The costs of the Group’s defined contribution pension schemes
are charged to the income statement in the period in which they fall due. The charge to the income statement was
£3.6 million (2019: £3.8 million). At the year end, the Group had unpaid pension contributions of £0.1 million (2019:
£0.1 million) included within employee benefit liabilities.
168
Tyman plcAnnual Report and Accounts 2020 21. Retirement benefit obligations continued
21.3 Defined benefit pension schemes and post-employment medical benefit schemes
The table below outlines where the Group’s post-employment amounts and activity are included in the financial
statements.
Net liability on the balance sheet
Income statement (charge)/credit1
Remeasurements
Note
2020
£’m
(8.9)
(0.7)
1.3
2019
£’m
(11.2)
(0.8)
(1.3)
1 The income statement charge included within profit before taxation includes current service costs, past service costs, administrative
costs and interest costs.
The Group’s principal defined benefit pension schemes are operated in the US and Italy. The US defined benefit schemes
provide benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided
depends on members’ length of service and their salary in the final years leading up to retirement.
The Italian schemes relate to TFR termination obligations payable to employees of the Group’s Italian operations. Italian
employers are required to make provision for a type of severance package to its employees equivalent to 6.9% of each
employee’s gross annual salary, revalued on the basis of 75.0% of inflation plus a fixed rate of 1.5% during the period of
accrual. Upon termination of employment, the employer is obliged to pay a lump sum to the employee. TFR termination
obligations are unfunded by the Group. For certain US plans, pensions in payment do not receive inflationary increases.
The benefit payments are from trustee-administered funds. Plan assets held in trusts are governed by local regulations
and practice in the US, as is the nature of the relationship between the Group and the trustees and their composition.
Responsibility for governance of the plans, including investment and contribution schedules, lies jointly with the Group
and the board of trustees. The board of trustees is composed of representatives of the Company and plan participants in
accordance with the relevant plan rules.
Actuarial gains and losses from participant experience, changes in demographic assumptions, changes in financial
assumptions and net return on plan assets are recognised, net of the related deferred tax, in the consolidated statement
of comprehensive income.
The movement in the defined benefit obligation over the year is as follows:
Present value
of obligations
2020
£’m
2019
£’m
Fair value of
plan assets
2020
£’m
2019
£’m
Note
Net defined
liability
2020
£’m
2019
£’m
(10.8)
(0.1)
(0.3)
(0.4)
(0.8)
1.8
0.1
(3.1)
(0.1)
(1.3)
0.8
0.3
0.6
(11.2)
Balance at 1 January
Included in the income statement:
Current service (cost)/credit
Administration costs
Interest (expense)/income
Subtotal in income statement1
Included in other comprehensive income
Remeasurement (loss)/gain arising from:
Net gain on plan assets2
Gain from change in demographic assumptions
Loss from change in financial assumptions
Experience loss
Subtotal in other comprehensive income3
Employer contributions
Benefit payments
Exchange difference
Balance at 31 December
7
5
(30.5)
(29.1)
19.3
18.3
(11.2)
(0.1)
–
(0.9)
(1.0)
–
0.2
(3.0)
–
(2.8)
–
1.6
0.9
(31.8)
(0.1)
–
(1.1)
(1.2)
–
0.1
(3.1)
(0.1)
(3.1)
–
1.6
1.3
(30.5)
–
(0.3)
0.6
0.3
4.1
–
–
–
4.1
1.5
(1.4)
(0.9)
22.9
–
(0.3)
0.7
0.4
1.8
–
–
–
1.8
0.8
(1.3)
(0.7)
19.3
(0.1)
(0.3)
(0.3)
(0.7)
4.1
0.2
(3.0)
–
1.3
1.5
0.2
–
(8.9)
1 The current service cost, past service costs and expenses relating to the administration of the defined benefit schemes are included in
the income statement within administrative expenses. Also see note 5.3. Net expense is included within net finance income and costs
(note 7).
2 Excluding amounts included in interest expense.
3 A deferred tax credit of £0.1 million (2019: deferred tax credit of £0.3 million) has been recognised in other comprehensive income in
respect of remeasurements of the defined benefit obligation. Also see note 8.
169
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
21. Retirement benefit obligations continued
21.3 Defined benefit pension schemes and post-employment medical benefit schemes continued
Defined benefit plan liabilities and assets by country are as follows:
United States
Italy
Balance at 31 December
Present value
of obligations
2020
£’m
2019
£’m
(28.1)
(3.7)
(31.8)
(27.0)
(3.5)
(30.5)
Fair value of
plan assets
2020
£’m
2019
£’m
22.9
–
22.9
19.3
–
19.3
Net defined
liability
2020
£’m
(5.2)
(3.7)
(8.9)
2019
£’m
(7.7)
(3.5)
(11.2)
Plan assets comprise the following asset classes:
Equity instruments
Large US equity
Small/mid US equity
International equity
Balanced/asset allocation
Fixed income
Other
Balance at 31 December
2020
2019
£’m
12.5
7.1
1.2
4.2
–
9.2
1.2
22.9
%
54.6%
–
40.2%
5.2%
£’m
4.7
2.6
0.5
1.6
0.4
13.1
1.1
19.3
%
24.4%
2.1%
67.9%
5.6%
Equity instruments comprise quoted investments.
Through its defined benefit pension plans, the Group is exposed to a number of risks, the most significant of which are
detailed below:
Asset volatility
Changes in bond
yields
Inflation risk
Life expectancies
The plan liabilities are calculated using a discount rate set with reference to corporate bond
yields; if plan assets underperform this yield, this will create a deficit. The US plans hold
a significant proportion of fixed income investments, comprising a mixture of government
and corporate bonds, and provide an acceptable level of investment risk to better match
liabilities. The Group believes that given the long-term nature of plan liabilities, and the
strength of the supporting Group, a level of continuing equity investment is an appropriate
element of the Group’s long-term strategy to manage the plans efficiently. Equities are
expected to outperform corporate bonds in the long term while providing volatility and risk
in the short term. As the plans mature, the Group intends to reduce the level of investment
risk by investing more in assets that better match the liabilities. The Italian plans do not
have plan assets.
A decrease in corporate bond yields will increase plan liabilities, although this will be
partially offset by an increase in the value of the plans’ bond holdings.
Some of the Group’s pension obligations are linked to inflation, and higher inflation will lead
to higher liabilities (although, in most cases, caps on the level of inflationary increases are
in place to protect the plan against extreme inflation). The majority of the plans’ assets
are either unaffected by fixed interest bonds or loosely correlated with equities inflation,
meaning that an increase in inflation will also increase the deficit. In the US plans, the
pensions in payment are not linked to inflation, so this is a less material risk.
The majority of the plans’ obligations are to provide benefits for the life of the member, so
increases in life expectancy will result in an increase in the plans’ liabilities.
The significant actuarial assumptions were as follows:
2020
2019
United
States
2.30%
2.25%
n/a
n/a
n/a
Italy
0.10%
0.50%
0.50%
n/a
n/a
United
States
3.27%
2.25%
n/a
n/a
n/a
Italy
0.68%
1.00%
1.00%
n/a
n/a
Discount rate
Inflation
Salary growth rate
Pension growth rate
Healthcare cost trend
170
Tyman plcAnnual Report and Accounts 2020
21. Retirement benefit obligations continued
21.3 Defined benefit pension schemes and post-employment medical benefit schemes continued
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and
experience in each jurisdiction. These assumptions translate into an average life expectancy in years for a pensioner
retiring at age 65 for the US schemes as below. This assumption is not relevant to the Italian schemes.
Retiring at the end of the reporting year
Male
Female
Male
Female
United States
Italy
19.9
22.0
21.5
23.4
n/a
n/a
n/a
n/a
The sensitivity of the defined benefit obligation to changes in the weighted principal assumption is:
US
Italy
Change in
discount
rate
assumption
0.25%
0.50%
Impact of
increase in
assumption
(3.0)%
(5.3)%
Impact of
decrease in
assumption
3.2%
4.3%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same methodology has been applied
as when calculating the pension liability recognised within the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to the
previous year.
The US pension schemes are closed to new entrants and closed to further accrual of service; as a result there will be no
further service costs incurred by the Group related to these schemes. The expected level of contributions to the defined
benefit pension scheme and post-employment medical benefits in the year to December 2021 is £1.4 million.
The weighted average duration of the defined benefit obligation is 13 years for US plans and 10 years for Italian plans.
The expected maturity analysis of undiscounted post-employment pension benefits is as follows:
No later than one year
Between one and two years
Between two and five years
Later than five years
Total
Defined
pension
benefits
£’m
(1.8)
(1.7)
(5.3)
(9.1)
(17.9)
171
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
22. Share capital and share premium
22.1 Accounting policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from the proceeds received by the Company.
Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid,
including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to
the Company’s owners until the shares are cancelled or reissued. Where such shares are subsequently reissued,
any consideration received, net of any directly attributable incremental transaction costs and the related income tax
effects, is included in equity attributable to the Company’s owners.
22.2 Share capital and share premium
At 1 January 2019
Capital reduction
At 31 December 2019
At 31 December 2020
Number of
shares
‘m
Ordinary
shares
£m
Share
premium
£m
196.8
–
196.8
196.8
9.8
–
9.8
9.8
132.2
(132.2)
–
–
Ordinary shares in the Company have a par value of 5.00 pence per share (2019: 5.00 pence per share). All issued shares
are fully paid up.
As approved by shareholders at the AGM on 9 May 2019, a bonus share issue from undistributable reserves and
subsequent capital reduction was completed on 4 June 2019. The entire share premium was cancelled and transferred to
retained earnings.
23. Share-based payments
23.1 Accounting policy
The Group operates the LTIP, which is an equity-settled share-based compensation plan for certain employees under
which the entity receives services from employees as consideration for equity instruments (share options) of the
Group. The fair value of the employee services received in exchange for the grant of options is expensed on a straight-
line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. At each balance sheet date, the entity revises its
estimates of the number of options that are expected to vest, with any changes in estimate recognised in the income
statement, with a corresponding adjustment in equity. The fair value of awards granted under LTIP is measured using
the Black-Scholes model to predict target EPS levels.
The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value)
and share premium when the options are exercised. The Group also operates a save as you earn scheme for employees
and a deferred share bonus plan for senior management.
The charge in respect of the save as you earn scheme of £47,000 (2019: £82,000) is immaterial and therefore further
disclosures are not provided. Further details of the deferred share bonus scheme are included in the Remuneration
report on pages 100 to 121.
172
Tyman plcAnnual Report and Accounts 2020
23. Share-based payments continued
23.2 LTIP
The charge to the income statement in 2020 in relation to the LTIP was £0.1 million (2019: £0.5 million).
Conditional, annual awards of shares are granted under the LTIP to the Executive Directors and certain senior managers
at the discretion of the Remuneration Committee. Provided the participant remains an employee of the Group and the
performance conditions are met, awards will vest three years after the date of the grant at no cost to the employee.
Further information on the LTIP and the performance conditions for each grant are given in the Remuneration report.
The fair value of the awards granted under the LTIP in 2020 and the assumptions used in the calculation of the share-
based payment charge are outlined below.
Exercise price
Share price at grant date
Fair value
Expected volatility
Expected dividend yield
Risk-free rate
Grant date
Expected life
Grant 1
£Nil
£1.48
£1.37
30.3%
2.6%
0.6%
Grant 2
£Nil
£1.48
£1.48
0.0%
0.0%
0.6%
25 March 20 25 March 20
1–3 years
3 years
For the LTIPs under Grant 1 to vest, employees must remain in continuous service for the three-year vesting period. For
Executive and Head Office employees, 2022 EPS must be in the range of 31.33 pence to 38.57 pence, and 2022 ROCE
must be in the range of 13% and 14.2%. Divisional Executives have an additional performance obligation based on the
individual divisional 2022 EBITA. Grant 2 relates to restricted share awards, where the LTIPs vest in tranches over a
period of up to three years if the employees remain in continuous service. There are no performance conditions attached
to these.
Movements in the number of outstanding conditional awards of shares currently exercisable are as follows:
At 1 January
Exercised
Granted
Lapsed
At 31 December
2020
‘m
2.1
–
1.1
(0.8)
2.4
2019
‘m
2.3
(0.7)
1.3
(0.8)
2.1
23.3 Employee Benefit Trust purchases
Details of shares purchased by the Employee Benefit Trust to satisfy certain share awards vested in the year as well as
future obligations under the Group’s various share plans are as follows:
Number of ordinary shares
Cost to Company (£)
24. Dividends
Amounts recognised as distributions to owners in the year:
Final dividend for the year ended 31 December 2019 (2018: 8.25 pence)
Interim dividend for the year ended 31 December 2020 (2019: 3.85 pence)
Total amounts recognised as distributions to owners in the year
Amounts not recognised in the financial statements:
Final dividend proposed for the year ended 31 December 2020 of 4.00 pence (2019: 8.35 pence)
2020
‘m
0.1
0.3
2020
£’m
–
–
–
7.8
2019
‘m
0.8
2.0
2019
£’m
16.1
7.5
23.6
16.3
The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been
included as a liability in the financial statements for the year ended 31 December 2020.
As a result of significant uncertainty in 2020, payment of the final dividend proposed in 2019 was cancelled.
173
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
For the year ended 31 December 2020
25. Acquisitions and disposals
Acquisitions
During the year £1.5 million of deferred consideration was settled in relation to the Zoo acquisition.
Disposal
The trade and certain assets of the Ventrolla business were divested on 5 November 2020, for consideration of £1. A loss
on disposal of £1.8 million was recorded, reflecting the difference between the carrying value of assets sold and the fair
value of consideration. This has been recognised in exceptional items in the income statement.
26. Adjustments to cash flows from operating activities
The following non-cash and financing adjustments have been made to profit before taxation to arrive at operating cash
flow:
Net finance costs
Depreciation of PPE
Depreciation of right of use assets
Amortisation of intangible assets
Impairment of intangible assets
Impairment of property, plant and equipment
Impairment of right of use assets
Loss on disposal of property, plant and equipment
Pension service costs and expected administration costs
Non-cash provision movements
Share-based payments
27. Financial commitments
27.1 Capital commitments
Property, plant and equipment
Note
7
11
12
10
10
11
12
2020
£’m
12.1
12.7
7.7
20.3
–
0.5
0.3
1.3
0.4
(0.1)
0.7
55.9
2020
£’m
1.1
2019
£’m
15.7
13.1
7.5
25.0
2.5
4.3
–
1.4
0.3
1.3
0.8
71.9
2019
£’m
0.2
28. Contingent liabilities
Other than the EU state aid contingent liability of between £Nil and £4 million referred to in note 8, there are no
contingent liabilities.
29. Events after the balance sheet date
There were no events after the balance sheet date.
30. Related party transactions
The following transactions were carried out with related parties of Tyman plc:
30.1 Subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, are eliminated on consolidation. There
were no transactions between the Company and its subsidiaries made during the year other than intercompany loans.
30.2 Key management compensation
The Group considers its Directors to be the key management personnel. Compensation for Directors who have the sole
responsibility for planning, directing and controlling the Group are set out in the Remuneration report on pages 100 to
121.
Full details of individual Directors’ remuneration are given in the Remuneration report on page 105.
174
Tyman plcAnnual Report and Accounts 2020
31. Subsidiaries
Details of the subsidiaries of the Group as at 31 December 2020 are detailed below. Unless otherwise indicated, all
subsidiaries are wholly owned.
Registered name and office address
UK operations
29 Queen Anne’s Gate, London SW1H 9BU
Amesbury Holdings Limited1
Balance UK Limited1
Bilco Access Solutions Limited1
Crompton Limited1
ERA Home Security Limited1
ERA Products Limited1
ERA Security Hardware Limited1
Grouphomesafe Limited1
Howe Green Limited1
Jasper Acquisition Holdings Limited
Jasper Acquisition Limited1
Lupus Capital Limited
Octroi Group Limited
Octroi Investments Limited1
Otterburn Limited1
Profab Access Limited1
Response Electronics Limited1
Response Alarms Limited1
Schlegel Acquisition Holdings Limited
Schlegel Building Products Limited1
Schlegel Limited1
Tyman Equities Limited
Tyman Financial Services Limited1
Tyman Investments1
Tyman Management Limited1
Ventrolla Limited1
Window Fabrication and Fixing Supplies Limited1
Y-cam Solutions Limited1
Zoo Hardware Limited1
Country of
incorporation
Nature of
business
Dormant
United Kingdom
Dormant
United Kingdom
Building products
United Kingdom
Dormant
United Kingdom
Building products
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Holding company
United Kingdom
Holding company
United Kingdom
Dormant
United Kingdom
Holding company
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Holding company
United Kingdom
Dormant
United Kingdom
Building products
United Kingdom
United Kingdom
Dormant
United Kingdom Financing company
United Kingdom
Dormant
Holding company
United Kingdom
Dormant
United Kingdom
Dormant
United Kingdom
Smart home
United Kingdom
security
Building products
United Kingdom
North American operations
Bay Adelaide Centre, East Tower, 22 Adelaide Street West, Toronto, ON M5H 4E3
Amesbury Canada Inc1
8005 Dixie Road, Unit 8043, Brampton, Ontario L6T 3V1
AmesburyTruth, Inc
Canada
Holding company
Canada
Holding company
Suite 1700 Park Place, 666 Burrard Street, Vancouver, BC V6C 2X8 Canada
Ashland Hardware Canada Inc.
Canada
Building products
Roberto Fierro #6351, Industrial Park Aero Juarez, Juarez, Chihuahua 32695
Amesbury Mexico S.De R.L. De C.V.1
Mexico
Building products
Deportistas 7820 Parque Industrial Gema Ciudad, Juarez, Chihuahua 32648
Bilcomex Comercializadora S.De R.L. De C.V.1
Bilcomex S.De R.L. De C.V.1
Mexico
Mexico
Building products
Building products
Via Monterrey Matamoros No. 600, Parque Industrial Milenium, Apoodaca, Nuevo
Leon, Mexico, 66600
Ashland Hardware and Casting Systems de Mexico, S.DE R.L. De C.V. 1
Mexico
Building products
175
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Notes to the financial statements CONTINUED
For the year ended 31 December 2020
31. Subsidiaries continued
Registered name and office address
Centennial Lakes, Office Park V, Suite 800, 3600 Minnesota Drive, Edina, MN 55435
Amesbury Acquisition Holdings (2) Inc1
Amesbury Door Hardware Inc. 1
Amesbury Finance Holdings LLC1
Amesbury Group Inc1
Amesbury Group Plastic Profiles Inc1
Amesbury Industries Inc1
Ashland Hardware Holdings, Inc1
Ashland Hardware LLC1
Balance Systems Inc1
Bandlock Corporation Inc1
Fastek Products Inc1
Giesse Group North America Inc1
Overland Products Company, Inc1
Schlegel Acquisition Holdings USA Inc1
Schlegel Systems Inc1
The Bilco Company1
The Bilco Holding Company1
Truth Hardware Corporation1
Tyman Ventures Inc1
Unipoly Schlegel Holdings US Inc1
370 James Street, Suite 201, New Haven, CT 06513
Bilco U.K. Limited1
European operations
Nieuwpoortsesteenweg 102, 8400 Oostende
Schlegel Belgium BVBA1
Bredowstrasse 33, 22113, Hamburg
Schlegel GmbH1
Carl-Zeiss-Strasse 37, 63322 Rödermark
Jatec GmBH1
Kolonou 1-3, 12131 Peristeri
Giesse Group Hellas S.A.1
Via Tubertini n.1, 40054 Budrio BO, Italy
Giesse S.p.A.1
Localita Fondi, 33 25071, Agnosine, Italy
Reguitti S.p.A.
Havenkade 99B, 1973 AK ljmuiden, Holland
Tetchy Investments BV1
Country of
incorporation
Nature of
business
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Holding company
Building products
Holding company
Holding company
Building products
Holding company
Holding company
Building products
Building products
Building products
Building products
Building products
Building products
Holding company
Building products
Holding company
Holding company
Building products
Holding company
Holding company
United States
Building products
Belgium
Dormant
Germany
Building products
Germany
In liquidation
Greece
Building products
Italy
Building products
Italy
Building products
Netherlands
Dormant
Constitucion 84, Poligono Industrial Les Grases, 08980 Sant Feliu De Llobregat,
Barcelona
Giesse Group Iberia S.A.1
Spain
Building products
176
Tyman plcAnnual Report and Accounts 2020 31. Subsidiaries continued
Registered name and office address
Other international operations
Enrique Becquerel 4873, Area de promocion el Triangulo, CP 1615, Buenos Aires
Giesse Group Argentina S.A.1
44 Riverside Road, Chipping Norton, NSW 2170
Schlegel Australia Pty (2006) Ltd1
Schlegel Pty Limited1
617 Alameda Itatinga, Galpao 2, Parte B, Joapirange II, Valinhos-SP
Giesse Brasil Indústria e Comércio de Ferragens e Acessórios Ltda.1
618 Alameda Itatinga, Galpao 2, Parte B, Joapirange II, Valinhos-SP
Schlegel América Latina - Vedação, Esquadrias e Extrusão Ltda.1
No.151 Linjia of Linlianghe Village, Miaocheng Town, Huairou District, Beijing,
101401
Giesse Hardware (Beijing) Co. Ltd.1
Second floor of No.3 Building, No.1515 of Juxian Road, Hi-Tech District, Ningbo,
Zhejiang Province
TSA Hardware (Ningbo) Co. Limited1
Amesbury (Ningbo) Hardware Trading Co. Ltd1
Country of
incorporation
Nature of
business
Argentina
Building products
Australia
Australia
Holding company
Building products
Brazil
Building products
Brazil
Building products
China
Building products
China
China
Building products
Building products
1 Commonwealth Lane, 6-18, One Commonwealth, Singapore 149544
Schlegel Asia Pte. Ltd1
Singapore
In liquidation
3rd Interchange, Sheikh Zayed Road, Al Quoz Industrial Area 1, Dubai
SchlegeGiesse Middle East Building Materials Trading LLC1,2
United Arab
Emirates
Building products
Overseas branch operations
3 Park Farm Business Centre, Genevieve, Farnham Street, IP28 6TS
Bilco UK Ltd
United Kingdom
Building products
D-362, MIDC, TTC Industrial Area, Kushket Village, Juinagar, Navi Mumbai
400705
Giesse S.p.A
Istanbul Merkez Şubesi, Halk Sokak Ada IS Merkezi No: 46, Kat: 2 Daire: 4,
34734 Sahrayicedid, Kadikoy, Istanbul
Giesse S.p.A
8 Chemin du Jubin, 69570 Dardilly
Giesse S.p.A
Av. Eng. Duarte Pacheco, 19 - 3° DTO., 1070-100 Lisboa
Giesse Group Iberia S.A.
1 Held by subsidiary.
India
Building products
Turkey
Building products
France
Building products
Portugal
Building products
2 Shareholding of 49% held by the Group. The Group has managerial control and is entitled to 100% of the profits and cash generated by
the business.
177
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Company balance sheet
As at 31 December 2020
Fixed assets
Investments in subsidiaries
Current assets
Debtors
Cash and cash equivalents
Creditors - amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors - amounts falling due after more than one year
Net assets
Equity
Called up share capital
Treasury reserve
Retained earnings
– brought forward
– profit for the year
– other movements
Total shareholders’ funds
Note
2020
£’m
2019
£’m
4
5
6
6
9
344.5
343.7
104.7
6.0
110.7
(40.7)
70.0
414.5
(33.5)
381.0
9.8
(3.4)
374.6
374.3
0.6
(0.3)
381.0
107.1
5.9
113.0
(0.6)
112.4
456.1
(76.3)
379.8
9.8
(4.3)
374.3
261.2
6.2
106.9
379.8
The notes on pages 180 to 182 are an integral part of these financial statements.
The financial statements on pages 178 and 179 were approved by the Board on 4 March 2021 and signed on its behalf by:
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Tyman plc
Company registration number: 02806007
178
Tyman plcAnnual Report and Accounts 2020
Company statement of changes in equity
For the year ended 31 December 2020
At 1 January 2019
Total comprehensive income
Profit for the year
Transactions with owners
Share-based payments1
Dividends paid
Capital reduction
Issue of own shares to Employee Benefit Trust
Purchase of own shares for Employee Benefit Trust
At 31 December 2019
Total comprehensive income
Profit for the year
Transactions with owners
Share-based payments1
Issue of own shares to Employee Benefit Trust
Purchase of own shares for Employee Benefit Trust
At 31 December 2020
Called
up share
capital
£’m
9.8
Share
premium
£’m
132.2
Treasury
reserve
£’m
(4.9)
Retained
earnings
£’m
261.2
–
–
–
–
–
–
–
9.8
–
–
–
–
–
9.8
–
(132.2)
–
–
(132.2)
–
–
–
–
–
–
–
–
–
–
0.6
–
–
–
2.6
(2.0)
(4.3)
–
0.9
–
1.2
(0.3)
(3.4)
6.2
106.9
0.9
(23.6)
132.2
(2.6)
–
374.3
0.6
(0.3)
0.9
(1.2)
–
374.6
Total
£’m
398.3
6.2
(24.7)
0.9
(23.6)
–
–
(2.0)
379.8
0.6
0.6
0.9
–
(0.3)
381.0
1 Share-based payments include a deferred tax credit of £0.2 million (2019: deferred tax credit of £0.1 million) and a release of the
deferred share bonus plan accrual of £0.6 million (2019: £0.4 million).
The notes on pages 180 to 182 are an integral part of these financial statements.
179
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the Company financial statements
For the year ended 31 December 2020
1. Accounting policies
1.1 Basis of preparation
The financial statements of Tyman plc have been prepared in accordance with FRS 101 ‘Reduced Disclosure Framework’.
The financial statements have been prepared on a going concern basis under the historical cost convention and in
accordance with the Companies Act 2006 applicable to companies reporting under FRS 101. The accounting policies have
been consistently applied unless otherwise stated. None of the new standards which became effective in the year had an
impact on the Company.
The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting
policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in note 2.3 of the Group financial statements.
1.1.1 FRS 101 – reduced disclosure exemptions
The following exemptions from the requirements of IFRSs have been applied in the preparation of these financial
statements in accordance with FRS 101:
• paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payments;
• IFRS 7 Financial Instruments: Disclosures;
• paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
• the following paragraphs of IAS 1 Presentation of Financial Statements:
• comparative information requirements in respect of paragraph 79(a)(iv);
• paragraph 10(d), cash flow statements;
• paragraph 16, statement of compliance with all IFRS;
• paragraph 38A, minimum of two primary statements, including cash flow statements;
• paragraphs 38B to 38D, additional comparative information;
• paragraphs 40A to 40D, requirements for a third statement of financial position;
• paragraph 111, cash flow statement information;
• paragraphs 134 to 136, capital management disclosures;
• paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates And Errors;
• IAS 7 Statement of Cash Flows;
• paragraph 17 of IAS 24 Related Party Disclosures; and
• the requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two
or more members of a Group.
1.2 Foreign currency translation
1.2.1 Functional currency and presentation currency
The financial statements are presented in sterling, which is also the functional currency.
1.2.2 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
1.3 Financial instruments
Financial assets and liabilities are recognised when the Company becomes party to the contractual provisions of the
instrument and are generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
1.3.1 Financial assets at amortised cost
The Company classifies financial assets at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
They are included in current assets, except for maturities greater than twelve months after the end of the reporting
period. These are classified as non-current assets. The Company’s financial assets comprise “debtors” (see note 5) and
“cash and cash equivalents” in the balance sheet.
1.3.2 Financial liabilities held at amortised cost
Financial liabilities held at amortised cost comprise “creditors” (see note 6).
1.4 Investments in subsidiaries
Investments in subsidiaries are stated at cost less any accumulated impairment losses.
180
Tyman plcAnnual Report and Accounts 2020 1. Accounting policies continued
1.5 Borrowings
Interest-bearing loans and overdrafts are recognised initially at fair value, net of transaction costs incurred. Interest-
bearing loans are subsequently carried at amortised cost using the effective interest rate method. All borrowing costs are
expensed as incurred, on an accruals basis, to the income statement using the effective interest rate method.
1.6 Share-based payments
The Company operates an equity-settled share-based compensation plan (Long Term Incentive Plan, “LTIP”) for certain
employees under which the entity receives services from employees as consideration for equity instruments (share
options) of the Company. The fair value of the employee services received in exchange for the grant of options is
expensed on a straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually
vest.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. At each balance sheet date, the entity revises its
estimates of the number of options that are expected to vest, with any changes in estimate recognised in the income
statement, with a corresponding adjustment in equity. The fair value of awards granted under LTIP is measured using the
Black-Scholes model.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and
share premium when the options are exercised.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the
grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with
a corresponding credit to equity in the parent entity financial statements.
The social security contributions payable in connection with the grant of the share options are considered an integral part
of the grant itself, and the charge will be treated as a cash-settled transaction.
Details of share-based payments are provided in note 23 of the Group financial statements.
2. Profit attributable to the shareholders of the Company
The Company is an investment holding company. It receives dividend income from subsidiaries and bank interest. It
pays loan interest to a subsidiary. The majority of administrative expenses are paid by the Company’s subsidiary, Tyman
Management Limited, including the whole amount of relevant auditors’ remuneration and operating lease costs.
As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss
account for the year. The Company reported a profit for the financial year ended 31 December 2020 of £0.6 million (2019:
£6.2 million).
3. Employees
Other than the Directors, there were no employees of the Company during the year (2019: Nil). Directors’ emoluments
are set out in the Directors’ remuneration report in the Group’s Annual Report on pages 104 to 113.
4. Investments
Cost
At 1 January 2019
Disposals
Capital contribution relating to share-based payments
At 31 December 2019
Capital contribution relating to share-based payments
At 31 December 2020
Impairment
At 1 January 2019
At 31 December 2019
At 31 December 2020
Carrying amount
At 1 January 2019
At 31 December 2019
At 31 December 2020
£’m
356.8
(13.4)
0.9
344.3
0.9
345.2
(0.7)
(0.7)
(0.7)
356.1
343.6
344.5
All of the above investments are in unlisted shares. The Directors believe that the carrying value of the investments is
supported by the recoverable amount of their underlying assets.
181
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Notes to the Company financial statements CONTINUED
For the year ended 31 December 2020
5. Debtors
Amounts receivable after more than one year
Amounts owed by Group undertakings
Deferred tax asset
Note
8
2020
£’m
104.4
0.3
104.7
2019
£’m
106.8
0.3
107.1
The amounts owed by Group undertakings are unsecured, interest free and recoverable on demand but are unlikely to be
repaid within one year.
6. Creditors
Amounts falling due within one year
Private placement notes
Corporation tax liability
Other creditors
Amounts falling due after more than one year
Private placement notes
Amounts owed to Group undertakings
Note
2020
£’m
7
(40.4)
–
(0.3)
(40.7)
(32.9)
(0.6)
(33.5)
7
2019
£’m
–
(0.2)
(0.4)
(0.6)
(75.7)
(0.6)
(76.3)
The amounts owed to Group undertakings are interest free, repayable on demand and unsecured.
7. Private placement notes
The senior notes relate to the issuance of a private debt placement with US financial institutions totalling US$100,000,000.
Refer to note 18.2.2 of the Group financial statements.
Details of the private placement notes, which are unsecured, are as follows:
Wholly repayable in 2021
Wholly repayable in 2024
Capitalised borrowing costs
8. Deferred tax asset
At 1 January
Income statement charge
Tax charge relating to components of other comprehensive income
At 31 December
2020
£’m
(40.4)
(33.0)
0.1
(73.3)
2020
£’m
0.3
(0.1)
0.1
0.3
2019
£’m
(41.7)
(34.1)
0.1
(75.7)
2019
£’m
0.3
–
–
0.3
The deferred tax asset relates to share-based payments. There are no unused tax losses or unused tax credits.
9. Called up share capital
The share capital of the Company is as set out in note 22 of the Group financial statements.
10. Financial commitments
At 31 December 2020 the Company had future lease commitments on land and buildings under non-cancellable operating
leases. These commitments were met on the Company’s behalf by Tyman Management Limited, a subsidiary. The
carrying value of the RoU asset held by Tyman Management Limited was £0.7 million (2019: £0.9 million) and of lease
liabilities was £0.7 million (2019: £0.8 million). See further details regarding the nature of lease commitments in note 12
of the Group financial statements.
11. Dividends
The dividends of the Company are set out in note 24 of the Group financial statements.
12. Related party transactions
The Company has taken advantage of the exemption in accordance with FRS 101, as a wholly owned subsidiary, not to
disclose details of related party transactions in accordance with IAS 24 Related Party Disclosures required by this standard.
182
Tyman plcAnnual Report and Accounts 2020
Alternative Performance Measure reconciliations
APMs used in key performance indicators
Like for like or LFL revenue and operating profit
Definition
The comparison of revenue or adjusted operating profit, as appropriate, excluding the impact of any acquisitions made
during the current year and, for acquisitions made in the comparative year, excluding from the current year result the
impact of the equivalent current year pre-acquisition period. For disposals, the results are excluded for the whole of
the current and prior period. The prior period comparative is retranslated at the current period average exchange rate.
The result of Y-cam is not adjusted as it is not material. The Group considers these amendments provide shareholders
with a comparable basis from which to understand the organic trading performance in the year.
Purpose
This measure is used by management to evaluate the Group’s organic growth in revenue and adjusted operating profit
year on year, excluding the impact of M&A and currency movements.
Reconciliation/calculation
Reported revenue
Revenue from businesses disposed of in current year
Effect of exchange rates
Like for like revenue
Adjusted operating profit
Operating profit for businesses disposed of in current year
Effect of exchange rates
Like for like adjusted operating profit
2020
£’m
572.8
-
-
572.8
80.3
-
-
80.3
2019
£’m
613.7
(0.9)
(3.4)
609.4
85.4
0.2
(0.6)
85.0
Adjusted operating profit and adjusted operating margin
Definition
Operating profit before amortisation of acquired intangible assets, deferred tax on amortisation of acquired intangible
assets, impairment of acquired intangible assets, impairment of goodwill, and exceptional items.
Adjusted operating margin is adjusted operating profit divided by revenue.
Purpose
This measure is used to evaluate the trading operating performance of the Group.
Exceptional items are excluded from this measure as they are largely one off and non-trading in nature and therefore
drawing these out aids the understanding of performance.
Amortisation of acquired intangible assets is excluded from this measure as this is a significant non-cash fixed charge
that is not affected by the trading performance of the business.
Impairment of acquired intangible assets and goodwill is excluded, as this can be a significant non-cash charge.
Reconciliation/calculation
Adjusted operating margin
Adjusted operating profit
Revenue
Adjusted operating margin (%)
2020
£’m
2019
£’m
80.3
572.8
14.0%
85.4
613.7
13.9%
183
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Alternative Performance Measure reconciliations CONTINUED
Leverage
Definition
Adjusted net debt translated at the average exchange rate for the year divided by adjusted EBITDA as defined in the
lending agreement.
Purpose
This measure is used to evaluate the ability of the Group to generate sufficient cash flows to cover its contractual debt
servicing obligations.
Reconciliation/calculation
Adjusted net debt (at average exchange rate)
Adjusted EBITDA
Leverage (x)
Return on capital employed (ROCE)
Definition
2020
£’m
105.3
95.2
1.1x
2019
£’m
170.1
98.9
1.7x
Adjusted operating profit as a percentage of the last thirteen month average capital employed.
Purpose
This measure is used to evaluate how efficiently the Group’s capital is being employed to improve profitability.
Reconciliation/calculation
Adjusted operating profit
Average capital employed
ROCE
Return on acquisition investment (ROAI)
Definition
2020
£’m
80.3
653.8
12.3%
2019
£’m
85.4
709.9
12.0%
For acquisitions made in the current year, this reflects ROAI calculated on the basis of adjusted operating profit
generated in the year since the acquisition date. For acquisitions made in previous years, this reflects ROAI calculated on
the basis of adjusted operating profit generated in the year or the last 12 months to the end of the two-year period since
acquisition.
Purpose
These measures are used to evaluate the efficiency and returns achieved by the Group from its investments in recent
material business acquisitions. ROAI is measured over a two-year period following acquisition.
Reconciliation/calculation
Adjusted operating profit
Acquisition enterprise value
Change in controllable capital employed
ROAI (%)
Adjusted earnings per share
Definition
Ashland
£’m
18.8
106.9
(1.9)
105.0
17.9%
Zoo
£’m
3.4
19.1
(0.8)
18.3
18.6%
Profab
£’m
0.4
4.4
0.3
4.7
8.8%
Reguitti
£’m
1.0
16.7
1.7
18.4
5.2%
Adjusted profit after tax divided by the basic weighted average number of ordinary shares in issue during the year,
excluding those held as treasury shares.
Purpose
This measure is used to determine the improvement in adjusted EPS for our shareholders.
Reconciliation/calculation
A reconciliation is provided in note 9 on page 147.
184
Tyman plcAnnual Report and Accounts 2020
Dividend cover
Definition
Adjusted earnings per share divided by the total dividend per share for the financial year.
Purpose
This measure provides an indication of the dividend paid relative to adjusted earnings for comparison with the Group’s
dividend policy.
Reconciliation/calculation
Adjusted earnings per share (p)
Total dividend per share1 (p)
Dividend cover (x)
2020
£’m
27.22
4.00
6.80x
2019
£’m
27.46
3.85
7.13x
1 As a result of significant uncertainty in 2020, payment of the final dividend proposed in 2019 was cancelled. The total dividend per
share in 2019 therefore reflects the interim dividend for the year ended 31 December 2019.
Operating cash conversion and operational cash flow
Definition
Operational Cash Flow
Net cash generated from operations before income tax paid, exceptional costs cash settled in the year and pension
contributions, and after proceeds on disposal of property, plant and equipment, payments to acquire property, plant and
equipment and payments to acquire intangible assets.
Operating Cash Conversion
Operational cash flow divided by adjusted operating profit.
Purpose
These measures are used to evaluate the cash flow generated by operations in order to pay down debt, return cash to
shareholders and make further investment in the business.
Reconciliation/calculation
Net cash generated from operations
Income tax paid
Exceptional costs
Pension contributions
Proceeds on disposal of PPE
Payments to acquire PPE and intangible assets
Operational cash flow
Operational cash flow
Adjusted operating profit
Operating cash conversion
2020
£’m
95.9
13.8
4.2
1.7
–
(10.5)
105.1
2019
£’m
97.1
14.2
11.3
1.0
0.8
(11.5)
112.9
105.1
80.3
130.9%
112.9
85.4
132.2%
185
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Alternative Performance Measure reconciliations CONTINUED
Other APMs
EBITDA and adjusted EBITDA
Definition
EBITDA
Adjusted operating profit with depreciation, amortisation of computer software, and share-based payments expenses
added back.
Adjusted EBITDA
EBITDA plus the pre-acquisition EBITDA of businesses acquired during the year covering the relevant pre-acquisition
period less the EBITDA of businesses disposed of during the year.
Purpose
This measure is used as the numerator in calculating covenants under the terms of the Group’s revolving credit facility.
Reconciliation/calculation
Adjusted operating profit
Depreciation
Amortisation of computer software
IFRS 16
Share-based payments expense
EBITDA of businesses disposed of during the year
Adjusted EBITDA
2020
£’m
80.3
12.7
1.5
(1.2)
0.1
1.8
95.2
2019
£’m
85.4
13.1
1.5
(1.6)
0.5
–
98.9
Adjustment to net cash generated from operations
Definition
The add back of net finance costs, depreciation, amortisation of intangible assets, impairment of PPE, profit on disposal
of PPE, write-off of inventory fair value adjustments, pension service costs and expected administrative costs, non-cash
provision movements, profit on disposal of business and share-based payments.
Purpose
These are non-cash, non-operating items which are added back to profit to derive cash generated from operations in the
cash flow statement.
Reconciliation/calculation
See reconciliation in note 26 on page 174.
Constant currency on CC
Definition
Comparison with the comparative period translated at the current year’s average or closing exchange rate as applicable.
Purpose
This measure is used by management to measure performance of the business removing the effect of changes in foreign
exchange rates which are outside of the control of management.
Reconciliation/calculation
It is not practicable to present a reconciliation of all CC measures used. A table showing the current and comparative
period average and closing exchange rates is presented on page 190. A sensitivity analysis showing the impact of
fluctuations in exchange rates is also presented on page 52.
Free cash flow
Definition
Operational cash flow after deducting pension contributions, income tax paid, net interest paid and exceptional cash
costs settled in the year.
Purpose
This measure is used to evaluate the cash flow generated by the business operations after expenditure incurred on
maintaining capital assets.
Reconciliation/calculation
See page 49 for reconciliation between operational cash flow and free cash flow.
186
Tyman plcAnnual Report and Accounts 2020
Interest cover
Definition
EBITDA divided by the net interest payable on bank loans, private placement notes and overdrafts and interest income
from short-term bank deposits.
Purpose
This measure is used to evaluate the profit available to service the Group’s interest costs. This is one of the covenants
the Group is subject to under the terms of its revolving credit facility.
Reconciliation/calculation
EBITDA
Net interest
Interest cover
Adjusted administrative expenses
Definition
2020
£’m
93.4
8.9
10.5x
2019
£’m
98.9
11.1
8.9x
Administrative expenses before exceptional items, amortisation of acquired intangible assets, impairment of acquired
intangible assets and impairment of acquired goodwill.
Purpose
This measure is used to evaluate the adjusted administrative expenses of the business excluding the effect of exceptional
items and amortisation of acquired intangible assets which is a significant charge that is not directly affected by trading.
Reconciliation/calculation
Administrative expenses
Exceptional items
Amortisation of acquired intangible assets
Impairment of acquired intangible assets
Adjusted administrative expenses
Adjusted effective tax rate
Definition
2020
£’m
(132.4)
1.8
18.8
-
2019
£’m
(165.1)
18.9
23.5
2.5
(111.8)
(120.2)
Adjusted tax charge divided by adjusted profit before tax.
Purpose
This measure is used to evaluate the tax charge relative to profit arising on the adjusted trading activity of the Group.
Reconciliation/calculation
Adjusted tax charge
Adjusted profit before tax
Adjusted effective tax rate
Adjusted gross debt
Definition
2020
£’m
(15.3)
68.4
2019
£’m
(17.5)
71.0
(22.4%)
(24.6%)
Interest-bearing loans and borrowings, with unamortised borrowing costs and lease liabilities added back.
Purpose
This gives a measure of the gross amount owed to lenders, without the effect of unamortised borrowing costs for which
cash outflow has already occurred.
Reconciliation/calculation
Borrowings
Lease liabilities
Unamortised borrowing costs
Adjusted gross debt
2020
£’m
(222.9)
53.8
(1.2)
(170.3)
2019
£’m
(271.8)
60.0
(1.7)
(213.5)
187
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS
Alternative Performance Measure reconciliations CONTINUED
Adjusted net debt
Definition
Interest-bearing loans and borrowings, net of cash and cash equivalents, plus unamortised borrowing costs and lease
liabilities added back.
Purpose
This gives a measure of the gross amount owed to lenders, without the effect of unamortised borrowing costs.
Reconciliation/calculation
Borrowings
Cash
Lease liabilities
Unamortised borrowing costs
Adjusted net debt
2020
£’m
(222.9)
69.7
53.8
(1.2)
(100.6)
2019
£’m
(271.8)
49.0
60.0
(1.7)
(164.5)
Adjusted profit before tax and adjusted profit after tax
Definition
Profit before amortisation of acquired intangible assets, deferred tax on amortisation of acquired intangible assets,
impairment of acquired intangible assets, impairment of goodwill, exceptional items, unwinding of discount on provisions,
gains and losses on the fair value of derivative financial instruments, amortisation of borrowing costs, accelerated
amortisation of borrowing costs and the associated tax effect.
Purpose
This measure is used to evaluate the profit generated by the Group through trading activities. In addition to the
items excluded from operating profit above, the gains and losses on the fair value of derivative financial instruments,
amortisation of borrowing costs, accelerated amortisation of borrowing costs and the associated tax effect are excluded.
These items are excluded as they are of a non-trading nature.
Reconciliation/calculation
Profit before tax
Exceptional items
Amortisation of borrowing costs
Loss/(gain) on revaluation of fair value hedge
Amortisation of acquired intangible assets
Impairment of acquired intangible assets
Adjusted profit before taxation
Income tax charge
Adjusted tax effect
Adjusted profit after taxation
2020
£’m
47.6
1.8
(0.3)
0.5
18.8
–
68.4
(10.4)
(4.9)
53.1
2019
£’m
24.8
18.9
0.8
0.5
23.5
2.5
71.0
(7.1)
(10.4)
53.5
Adjusted profit before tax and adjusted profit after tax
Definition
Tax charge adjusted for the tax effect of exceptional items, amortisation of borrowings costs, amortisation of acquired
intangible assets, gain or loss on revaluation of fair value hedge and unwinding of discount on provisions.
Purpose
This measure is used to evaluate the tax charge arising on the adjusted trading activity of the Group.
Reconciliation/calculation
Tax charge
Tax effect of adjusted profit adjustments
Adjusted tax charge
188
2020
£’m
(10.4)
(4.9)
(15.3)
2019
£’m
(7.1)
(10.4)
(17.5)
Tyman plcAnnual Report and Accounts 2020
Definitions and glossary of terms
Access 360
UK Access solutions brand constituting Bilco UK, Howe Green and Profab
APM
Ashland
Bilco
Bps
BREEAM
CAGR
CGU
CIPS
DSBP
Alternative performance measure
Ashland Hardware Holdings Inc, acquired by AmesburyTruth on 15 March 2018
Company acquired by AmesburyTruth on 1 July 2016. Focuses on access hatches for
commercial projects in the US
Basis points
Building research establishment environmental assessment method (building
sustainability certification scheme)
Compound annual growth rate
Cash generating unit
Chartered Institute of Purchasing and Supply
Deferred Share Bonus Plan
EB Trust (EBT)
The Tyman Employees’ Benefit Trust
EBITDA
EMEAI
EPS
ESG
ESSP
ExCo
FVPL
GDPR
GHG
Giesse
GRI
Earnings before interest, taxation, depreciation and amortisation
Europe, Middle East and Africa and India region
Earnings per share
Environment, social and governance
Employee Sharesave Plan
Executive Committee
Fair value through profit or loss
General Data Protection Regulation
Greenhouse gas (emissions)
Giesse Group acquired by SchlegelGiesse Division on 7 March 2016
Global reporting initiative
Howe Green
Howe Green Limited acquired by the Group on 3 March 2017
IoT
LEED
LFL
LTIFR
LTM
M&A
NAHB
NPD
OEM
PMI
PPE
Internet of Things
Leadership in energy and environmental design (building sustainability certification
scheme)
Like-for-like
Lost time incident frequency rate
Last twelve months
Mergers and acquisitions
The National Association of Home Builders
New product development
Original equipment manufacturer
Purchasing Managers’ Index
Property, plant and equipment
Profab or Profab Access
Profab Access Solutions Limited acquired by ERA on 31 July 2018
Reguitti
Reguitti S.P.A acquired by SchlegelGiesse on 31 August 2018
ROAI
RMI
ROCE
SASB
SKU
Return on acquisition investment
Renovation, maintenance and improvement
Return on capital employed
Sustainability Accounting Standards Board
Stock keeping unit
Smartware
Integrated mechanical and electronic security solutions
TCFD
TFR
UN SDG
USPP
Ventrolla
Taskforce for climate related financial disclosures
Trattamento di fine Rapporto (Italian pension scheme)
United Nations Sustainable Development Goals
US private placement
Sash window refurbishment business in ERA
Zoo or Zoo Hardware
Zoo Hardware Limited acquired by ERA on 10 May 2018 focusing on architectural door
and window engineered hardware
189
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Roundings and exchange rates
Roundings
Percentage numbers have been calculated using rounded figures from the financial statements, which may lead to small
differences in some figures and percentages quoted.
Exchange rates
The following foreign exchange rates have been used in the financial information to translate amounts into sterling:
2020
1.3650
1.1129
1.7708
1.7393
7.0898
2020
1.2836
1.1251
1.8626
1.7200
6.6115
2019
1.3186
1.1757
1.8801
1.7164
5.3005
2019
1.2770
1.1406
1.8365
1.6943
5.0371
Closing rates
US dollar
Euro
Australian dollar
Canadian dollar
Brazilian real
Average rates
US dollar
Euro
Australian dollar
Canadian dollar
Brazilian real
190
Tyman plcAnnual Report and Accounts 2020 Five-year summary
Statutory measures
Revenue
Net finance costs
Profit before taxation
Taxation
Profit after taxation
2020
£’m
572.8
(12.1)
47.6
(10.4)
37.2
2019
£’m
613.7
(15.7)
24.8
(7.1)
17.7
2018
£’m
591.5
(11.6)
38.9
(12.5)
26.3
2017
£’m
522.7
(9.4)
34.5
(3.3)
31.2
2016
£’m
457.6
(7.8)
29.4
(8.6)
20.7
Total number of shares in issue (’000)
Dividends per share declared (p)
Average monthly number of employees
196,762
4.00p
4,035
196,762
3.85p2
4,146
196,762
12.00p
4,303
178,582
11.25p
3,904
178,582
10.50p
3,568
APMs and KPIs
LFL revenue growth (%)1
Adjusted operating profit (£’m)1
Adjusted operating margin1
Adjusted profit before taxation (£’m)1
Adjusted net debt (£’m)1
Adjusted basic earnings per share (p)1
Return on capital employed (%)1
Operating cash conversion (%)1
Leverage (x)1
2020
2019
(6.0)%
80.3
14.0%
68.4
(100.6)
27.22p
12.3%
130.9%
1.11×
(1.8)%
85.4
13.9%
71.0
(164.5)
27.46p
12.0%
132.2%
1.72×
2018
2.7%
83.6
14.1%
72.7
(210.7)
27.68p
13.4%
92.4%
1.96×
2017
1.7%
76.8
14.7%
68.3
(163.7)
26.91p
13.6%
85.6%
1.83×
2016
0.9%
69.8
15.3%
62.1
(176.7)
25.41p
13.8%
105.9%
1.89×
1 See Alternative performance measures on pages 183 to 188.
2 The 2019 final dividend of 8.35p was withdrawn due to COVID-19.
191
Annual Report and Accounts 2020Tyman plcFINANCIAL STATEMENTS Shareholder notes
192
Tyman plcAnnual Report and Accounts 2020 T
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Tyman plc
29 Queen Anne’s Gate
London
SW1H 9BU
enquiries@tymanplc.com
www.tymanplc.com