Tyman plc
Annual Report
and Accounts for
the year ended
31 December 2022
e expert to u c h t
h
T
t r a n sforms
t
a
h
Tyman is a leading
international supplier
of highly-engineered door
and window components
and access solutions to the
construction industry.
Summary Group Results
Revenue
Adjusted EPS
Leverage
£715.5m
2021: £635.7m
34.7p
2021: 32.1p
1.0x
2021: 0.9x
Adjusted operating profit
Basic EPS
Adjusted net debt
£94.6m
2021: £90.0m
24.6p
2021: 25.4p
£116.0m
2021: £91.7m
Profit before taxation
Dividend per share
£61.4m
2021: £64.0m
13.7p
2021: 12.9p
Contents
Strategic report
Highlights
Why invest in Tyman?
Chair’s statement
Our purpose and values
Our products
Our brands
Our business model
Our markets
Our divisions
Our geographical reach
Our strategy
Key performance indicators
Chief Executive Officer’s review
Operational review
Financial review
Managing risk
1
2
4
6
8
13
14
16
18
19
20
24
26
30
36
42
Climate-related disclosures (TCFD) 50
Sustainability performance
Section 172 statement
Going concern and viability
Non-financial information
statement
Governance report
Board of Directors
Directors' report
Chairman’s introduction
Statement of governance
Nominations Committee report
Audit and Risk Committee report
Remuneration report
Financial statements
Independent auditors’ report
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated statement of
changes in equity
Consolidated balance sheet
70
80
84
87
88
90
93
95
105
108
115
140
147
148
149
150
Highlights:
Performance at upper end of expectations despite
challenging macroeconomic backdrop
• Revenue growth of 13%, with LFL growth of 5% reflecting successful pricing
actions and share gains, partially offset by lower market volumes, including
the exit from Russia
• Adjusted operating profit growth of 5%, with a LFL decline of 3%
reflecting lower volumes, including the exit from Russia; operating profit
decline of 3%
• Adjusted operating margin decline principally reflects the dilutive impact of
the pass-through of cost inflation
• Good progress with our strategic initiatives:
Share gains, driven by innovation, market expansion and executing well
with customers
Consolidated cash flow statement 151
Notes to the financial statements 152
•
•
Structural margin enhancement activities, including further
footprint optimisation, ERP upgrade, factory automation and
process enhancement projects
•
•
Further external recognition of our sustainability credentials; 90% of
funding now linked to sustainability performance following successful
debt refinancing
Full year dividend increase of 6%, reflecting growth in adjusted EPS of 8%
and confidence in the Group’s future growth prospects
Company balance sheet
Company statement of
changes in equity
Notes to the Company
financial statements
Alternative Performance
Measure reconciliations
GRI Standard Content Index
201
202
203
208
216
Definitions and glossary of terms 218
Roundings and exchange rates
Five-year summary
220
221
01
Annual Report and Accounts 2022Tyman plc Why invest in Tyman?
Favourable megatrends, differentiated value-creation and high cash generation support
long-term growth.
Favourable
megatrends
Compelling customer
value-creation
Sustainable
growth potential
• Global population growth together
• 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
with demographic and social
change drives construction and
remodelling activity
• Housing market fundamentals,
notably housing shortages and an
ageing housing stock in the USA,
support both construction and
remodelling activity
• Climate change demands more
energy efficient buildings,
supported by enhanced building
codes and rising sustainability
awareness amongst consumers,
with product certifications getting
stricter
•
Increasing technology advances
and post-pandemic changes to
lifestyles and the use of homes
raises expectations for improved
aesthetics and ease of use
• 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 markets
on pages 16 to 17.
Read more about our products
and brands on pages 8 to 13.
Read more about our business
model on pages 14 to 15.
02
Strategic ReportTyman plcAnnual Report and Accounts 2022 Case study
Protecting commuters at Grand Central Station, New York City
The infrastructure segment of the US construction market is currently one of the fastest
growing sectors of the market, benefitting from funding at federal, state, and local levels.
Bilco has a leading position in the provision of fire-rated access doors and panels to the
public and commercial construction markets.
What was the challenge?
The Metropolitan Transit Authority (MTA) in New York
City recently completed the largest capital project in their
history to expand their service to Long Island and provide
a much-needed expansion to the Grand Central Terminal.
The centrepiece of the project is a new 350,000 square foot
passenger concourse underneath Grand Central Station that
includes 800,000 feet of underground raceways, 7,000 light
fixtures, seven power stations and two off-track facilities.
The MTA required a solution to access various plumbing and
electrical connections through a fire-rated floor.
How did Tyman develop a solution?
Bilco and its local representative designed and developed a
range of doors that met both the size requirements and the
critical life safety and performance demands of the application.
Amid all the tunnels and junctions for electrical and plumbing
fixtures, 53 fire-rated floor doors manufactured by Bilco
have now been installed. Each fire-rated floor door is
constructed with door hardware and sealants to maintain
the fire-rating. Bilco’s type FR fire-rated doors, often found in
public buildings, office buildings and exit stairwells, are the
industry’s only UL listed fire-rated floor door. The UL listing
indicates that it has been tested and certified to maintain its
integrity in the event of a fire for up to three hours. The doors
also incorporate a separate UL listed self-closing device that
automatically closes the door in the event that the door is
open when a fire breaks out.
What value does this create?
Bilco’s UL listed fire-rated floor doors provide the highest
levels of quality and fire protection, attributes that are
essential for such an important public infrastructure project.
In addition to the fire protection provided, the FR door also
allows for the installation of finished flooring in the cover,
enabling the door to blend with the aesthetics of the new
passenger concourse at Grand Central Station.
“These doors provide a continuation of the regular
floor,’’ said Jason Benfield of Tutor Perini, the civil
engineering team working on the project. “If a fire
breaks out, these doors provide access and give
people the chance to get out to an adjacent space.
If they weren’t fire-rated, smoke or fire could pass
through the door and into the public area.”
0303
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Chair’s statement
The Group has performed well
in a challenging environment,
testament to the agility and
resilience of its business
model and the dedication and
expertise of its people.”
Nicky Hartery
Non-executive Chair
04
Introduction
This has been the third consecutive year in which the
operating environment for our business was incredibly
unstable and challenging. Given this, and on behalf of the
Board, I would like to say how incredibly proud I am of how
well our people have responded. Their tireless hard work,
determination, resilience and agility is hugely appreciated by
the Board and gives us confidence in the long-term future of
the Group.
People and culture
The Board’s priority is always to ensure the health and safety
of our employees, their families and our communities.
It is extremely pleasing to report that the Group’s safety
performance has continued to improve, with the 2022 lost
time incident frequency rate 70% lower than in 2018. This
reflects the disciplined execution of our programme to deeply
embed a safety excellence culture and move Tyman closer to
world-class levels of safety performance.
Developing a strong business ethics culture is also a key
focus for the Board. In 2022, the Group deployed a ‘Leading
with Integrity’ workshop to provide senior leaders across
the business with the skills to create an environment of
psychological safety within their teams so as to encourage the
raising of concerns and open discussion of ethical dilemmas.
Obtaining employee feedback is also important to the Board;
this occurs on a regular basis through site visits as well as
in skip-level meetings held by the Workforce Engagement
Non-executive Director, Pamela Bingham. In addition, in early
2022, the Group conducted an all-employee engagement
survey, achieving a healthy response rate of 80% and results
in line with the benchmark scores for global manufacturing
businesses. Following the survey, focus groups were held to
discuss the results with employees and gather further insights
to be incorporated into detailed action plans. Pulse surveys
will be used to assess progress against these plans, with the
next full employee engagement survey planned for 2024.
Performance overview
The Group delivered a solid trading performance in 2022
given what were increasingly challenging market conditions.
Group revenue grew to a record £715.5 million, with the
positive effect of the pass-through of cost inflation and share
gains partially offset by lower market volumes. Adjusted
operating profit grew, benefitting from good cost control,
productivity improvements and foreign exchange movements,
which helped mitigate the impact of lower volumes, including
the exit from Russia and Belarus. Further details of our
financial performance are set out on pages 36 to 41.
Strategic ReportTyman plcAnnual Report and Accounts 2022 Strategy
Dividends
The Board is proposing a total dividend for the 2022 financial
year of a record 13.7 pence per share, an increase of 6%
compared to 2021, in line with the Group’s progressive
dividend policy and reflecting confidence in the Group’s
growth prospects. The dividend will be paid on 26 May 2023
to shareholders on the register at the close of business on
28 April 2023.
Summary
The Group has performed well in a rapidly changing and
challenging environment, which is testament to the agility
and resilience of its business model and the dedication and
expertise of its people. The Board remains confident in the
significant value-creation potential available to the Group as
it continues to successfully implement its strategic initiatives,
positioning itself to take advantage of the structural growth
drivers once near-term market weakness recedes.
Nicky Hartery
Non-executive Chair
2 March 2023
Whilst the near-term trading environment remains
challenging, the housing sector fundamentals are strong
and will continue to provide growth opportunities. The Board
is confident that the Group strategy, first set out in 2019,
remains the right one and supports long-term value creation
with sustainability at its core. Good progress was made with
strategic initiatives to gain market share and enhance the
Group’s operational platform in 2022 despite the market
volatility created by high levels of inflation. Together with
financial leverage remaining towards the bottom of the target
range of 1.0x to 1.5x, this leaves the Group well positioned to
resume M&A activity when the right opportunities present.
Further information about our strategy is on pages 20 to 22.
Sustainability
Given the importance of sustainability to Tyman’s strategy,
engagement from the Board on climate change and
sustainability performance was increased significantly in
2022 (see page 52 for a summary of the Board’s discussions
and decisions in relation to climate matters). In addition to
including the achievement of sustainability performance
targets as an LTIP metric since the awards in 2021, the
majority of the Group’s external financing is now linked to
sustainability targets. The Board is delighted to observe
that the Group’s progress in sustainability continues to gain
recognition from external rating agencies and has more
recently led to Tyman’s inclusion in the FTSE4Good UK index.
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 Statement
of governance on pages 95 to 104 provides an overview of
Tyman’s governance framework, as well as the work of the
Board and its Committees. It also includes a review of the
progress made implementing the three priorities highlighted
by the externally facilitated Board evaluation that was
conducted in 2021.
During 2022, the Board considered various operational
topics, such as the Group’s response to the Russian invasion
of Ukraine, the refinancing of bank and US Private Placement
debt, the impact of ongoing supply chain challenges and
inflation on the business, and preparing for a market
downturn. The Board also spent time on topics related to
the Group’s long-term strategy, such as progressing the
sustainability roadmap, upgrading the Group’s IT systems
to support greater efficiency, and oversight of the Group’s
footprint projects.
0505
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Our purpose and values
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 8 to 12 and our business model on pages 14 to 15.
Our values
Our values frame how we work with each other and with our partners, and will shape the culture of Tyman. They are the
foundation of our success and essential to achieving our purpose. Our Code of Business Ethics, ‘Integrity in action’ embodies
these values, laying out the expected standards of behaviour that all our employees must adhere to.
The
Tyman
Touch
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
r
e
S t op Growin
g
v
e
N
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
06
D
o
T
h
e
R
i
g
h
t
T
hing
n
e
p
p
a
M a k e It H
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
Strategic ReportTyman plcAnnual Report and Accounts 2022
A strategy for long-term value creation
Guided by our purpose, underpinned by our values and with sustainability at its core.
Our purpose
To transform the security, comfort and sustainability of living and working through our expert touch.
CUS
ble oper a ti o n s Sustain
O
F
D
E
a
b
l
e
F
I
N
E
c
u
l
t
u
r
e
a
n
i
a
t
s
u
S
n s
S
ustainable s o l u ti o
GROW
Margin
expansion
Positive
impact
Sustainable
growth
Engaged
people
Long-term value creation
Our values
Do the right thing. Make it happen. Never stop growing.
Read more about our strategy on pages 20 to 22.
Read more about key performance indicators on pages 24 to 25.
0707
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc
Our products
The value proposition
to customers
Our product portfolio encompasses 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. Our products represent
a small proportion of the cost of a window or
door but have a disproportionate impact on
the comfort, sustainability, security, safety and
aesthetics of buildings.
Security
•
Locking/deterrent
• Monitoring
• Remote and timebound access
Comfort
• Ventilation
• Weather resistance
•
•
Sound insulation
Ease of use
Sustainability
•
•
Energy efficiency of buildings
Longevity of buildings
Safety
•
Fall prevention
• Hurricane solutions
•
Safe access
Aesthetics
•
•
•
Look
Feel
Suiting
Read more about our business
model on pages 14 to 15.
08
Strategic ReportTyman plcAnnual Report and Accounts 2022 Window and door hardware
72%
of what we sell
Link to value proposition
Products
The Group offers a wide range of window and door
hardware for both the residential and commercial markets.
The portfolio covers all aspects of the hardware required
to open, close and lock a window or door (including patio
and bi-fold doors), such as locks, cylinders, hinges, handles
and, in the case of sash/sliding windows, balances to ensure
the smooth operation of the window. The portfolio includes
a wide range of decorative hardware and accessories
(letterplates, handles, door knockers, letters and numbers)
in a variety of colours, styles and finishes. In the UK, our
portfolio includes smart entry and monitoring solutions for
the residential market.
Value to the customer
Our products improve the comfort of both living and working
spaces by ensuring protection from weather and noise
whilst providing ventilation and insulation. Aesthetics is also
increasingly important, especially given the trend towards
larger expanses of glass and slimmer sight lines, which places
greater performance requirements on the window hardware.
We provide a wide range of colours, styles and finishes to
cater for all tastes.
Our products are independently tested to ensure the highest
levels of security and safety are met.
0909
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Our products continued
Seals and extrusions
18%
of what we sell
Link to value proposition
Products
Tyman sells a wide range of high-performance window
and internal/external door seals and other extrusions for
both residential and commercial applications. This includes
compression seals for casement applications and pile for
sliding applications.
Value to the customer
Our seals and extrusions provide excellent thermal and sound
insulation to enhance the comfort of living and working
spaces, meeting or exceeding building regulations with
regards to safety and sustainability. We collaborate with
customers to design and make new products and solutions to
improve the aesthetics and/or the sustainability credentials of
the window or door.
10
Strategic ReportTyman plcAnnual Report and Accounts 2022 Access solutions
10%
of what we sell
Link to value proposition
Products
Tyman offers a range of products that provide roof, floor or
wall access for commercial building and other infrastructure
applications. Products can be custom engineered to meet
unique access requirements.
The roof access portfolio encompasses roof hatches, ladders
and railings, providing permanent, safe and convenient
access to roof areas, as well as smoke and heat exhaust vents
to enable the release of smoke and hot flue gas in the event
of a fire.
The wall access portfolio includes a range of riser doors and
panels that provides access to mechanical and electrical
services, whilst floor access hatches enable permanent, safe
access to underfloor services and pavement access.
Value to the customer
Specified in commercial, residential and public buildings
where low maintenance access is required behind walls,
under floors or onto roofs, our access solutions deliver the
highest standards in safety, security and practicality whilst
providing protection against natural hazards such as fire,
floods and hurricanes. Our focus on ease of installation is
very important to customers and helps them improve the
efficiency of their own operations.
1111
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Our products continued
Case study
Enhancing the value proposition with improved
aesthetics and sustainability
Manufactured from grade 304 stainless steel for its high-corrosion resistance, durability and
hardness properties, this new range from Zoo has been specifically designed to perform
exceptionally in both residential and commercial applications alike.
As part of Zoo’s ongoing commitment to reduce its impact on
the environment, this range is supplied without any plastic
packaging and the packaging is 100% recyclable.
Appealing to contemporary trends towards minimalism
and simplicity, this is a fully suited range of levers, with
complementary products including hinges, door closers,
flush bolts and more, The range is available in a variety of
hard-wearing finishes to create the perfect aesthetic, whether
for a residential property or commercial office space, whilst
meeting the technical requirements of the applicable BS EN
standards.
12
Strategic ReportTyman plcAnnual Report and Accounts 2022 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
Window and door hardware
and seals. The Amesbury and
Truth brands were harmonised
in 2014
Smoke vents, roof access
hatches and pavement doors
Security hardware including
electronic security systems and
services
Established
Bilco (1926)
Howe Green (1983)
Profab (2001)
Established
Truth (1914)
Amesbury (1978)
Established
1926
Established
1838
access-360.co.uk
amesburytruth.com
bilco.com
erahomesecurity.com
C
UK
I
R
NA
I
C
NA
I
R
UK
Hardware for aluminium
windows and doors
Decorative door hardware
Decorative door hardware
Window and door seals
and extrusions
Established
1965
giesse.it
Established
1890
Established
1975
Established
1885
jatechandles.com
reguitti.it
schlegel.com
R
C
NA
UK
I
R
C
I
R
C
I
R
C
UK
I
Product category
Key user
Division
Window and door hardware
R Residential
NA North America
Seals and extrusions
C Commercial
UK UK and Ireland
Commercial access solutions
I
International
Door hardware for architectural
ironmongers
Established
2011
zoohardware.co.uk
R
C
UK
1313
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc
Our business model
We use our valuable resource to create long-term, sustainable value for all our stakeholders.
Key activities
…that allows us to undertake differentiated
activities and address customer needs…
1
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.
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.
Our leading-edge testing facilities and accreditations allow
our customers to assure their end-users of the quality and
durability of their installed windows, doors and access
solutions.
There is an increasing strategic emphasis on designing
solutions for our customers that positively impact the UN
Sustainable Development Goals (SDGs).
Read more about our Sustainable Solutions
strategy on page 22.
Key resources and
relationships
Our resources are carefully selected
and developed to create competitive
advantage…
Leading brands
Our portfolio of complementary brands has market-
leading positions predicated on the innovation, quality
and service they deliver for our customers.
Product portfolio
The Group holds 491 active patents with another 126
pending, reflecting the extent of innovation embedded in
our broad range of products.
Deep customer relationships
We work closely with our customers to understand their
requirements and become a long-term strategic partner
for them, bringing high levels of repeat business and a
customer intimacy that allows us to continually improve
the value we bring to them.
Experienced and committed workforce
Our highly skilled, dedicated workforce provides the
expert touch for our customers.
Strategic supplier relationships
We supplement our internal capabilities with select
specialisms through external collaborations, allowing us
to deliver the best in innovation, quality and service to
our customers.
Global footprint
Our global scale allows us to sustain and further develop
a rich portfolio of products and technologies that support
our customers' needs, whilst having the presence and
agility to respond quickly to the specifics of local markets.
Strong balance sheet
Our high value-add products attract high margins which,
coupled with disciplined management of capital, drives
significant cash generation. The resulting balance sheet
strength allows us to invest to drive further organic and
acquisitive growth.
14
Strategic ReportTyman plcAnnual Report and Accounts 2022 Key activities
…that allows us to undertake differentiated
activities and address customer needs…
2
Make/source
We manufacture in our own facilities where this aligns
with our core capabilities, leveraging our economies of
scale in the procurement of raw materials and outsourced
manufactured components.
We are committed to minimising our own impact on the
environment through embedding sustainable practices in
our operations.
Read more about our Sustainability
Operations performance on page 70 to 73.
3
Deliver
We are continually looking to develop and optimise our
routes to market to effectively meet the evolving needs of
our industry around the world and take into account our
impact on the environment.
This ranges from supplying just-in-time direct to the
production lines of large window and door manufacturers
through to short lead-time supply to specialist distributors
and project sites. We back this up with extensive
technical and application support.
Value created
…that together create value for
all our stakeholders.
Investors
We aim to deliver increased shareholder value through
a mix of capital appreciation and dividend distributions,
made possible through earnings growth and financial
strength as we deliver on our strategy.
Read more about our strategy on page 20.
Customers
Our highly engineered components allow window and
door manufacturers to differentiate in their marketplace
with value-enhancing windows, doors and other forms
of access solutions. In addition, Tyman delivers industry-
leading services to customers, ranging from design
support to integrated supply of components into window
fabrication processes. Our products are 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
and commercial buildings.
Employees
We invest in our people through employee training,
career path development and continual improvement of
working practices and conditions.
Suppliers
Our strategic suppliers benefit from long-term, fair
partnerships with development of their business
practices and capabilities.
Society
Our products and solutions help make society more
sustainable by making buildings more energy efficient,
protecting buildings against climate hazards, reducing
community crime rates, enhancing the safety and
fire protection of buildings, 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 of
our operations.
1515
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Our markets
Structural industry growth drivers in the new build and RMI housing markets provide
strong long-term growth prospects for Tyman's products and solutions.
In Canada, the Canada Housing and Mortgage Corporation
(CMHC) estimates that as of 2021 there was a housing supply
gap of 2 million units in the country and if past construction
trends are maintained that gap would grow to 3.5 million
units by 2030 (source: The road ahead for the economy and
housing – fall 2022 update | CMHC (cmhc-schl.gc.ca)).
The UK government has a target of 300,000 new homes
to be built each year by the mid 2020s in order to meet
the country’s needs. However, the UK has been building
substantially less over the last decade.
The housing deficits are unlikely to be quickly eradicated,
suggesting that, once the current macroeconomic challenges
have been overcome, there will be strong underlying demand
for housing in the Group’s major markets for many years.
Demographic trends, such as growth in the age brackets
critical to household formation (within an overall growth in
populations) will underpin these strong fundamentals.
Structural and secular RMI market drivers
Like demand for new homes, consumer RMI spending on
windows and doors is impacted by affordability in the short
term, and the recent rise in interest rates coupled with high
inflation has put pressure on residential RMI expenditure.
However, as with the new build market, there are strong
structural growth drivers that are expected to drive healthy
long-term growth in the residential RMI market. These include:
• An ageing housing stock, which increases the potential
that households will need to replace and/or maintain
their windows and doors. For example, the median age
of owner-occupied housing in the US has increased from
31 years in 2005 to 40 years in 2021, according to the
2021 American Community Survey. Given the average
age of a window is normally in the range of 15-20 years,
this increase in the age of the housing stock should drive
further window replacements by homeowners.
•
•
Secular shift towards greater working from home means
homeowners are seeking to improve the comfort, security
and aesthetics of their living and working environment.
This generates demand for replacement windows to
provide, for example, increased natural light or improved
ventilation and insulation.
Increased sustainability awareness amongst consumers
and a desire to reduce the impact of climate change in
the home is expected to drive a major window and door
replacement cycle over time. Buildings are estimated to
account for nearly 40% of global carbon emissions so,
as countries around the world pursue net-zero goals by
2050 or sooner, reducing emissions generated during
the construction of a building and/or its operation will
become more important. As many of the buildings likely
to be in use in 2050 will have already been built, saving
energy in existing buildings will be a major focus and is
likely to lead to the replacement and upgrade of windows
and doors.
Demand for the Group's window and door hardware products,
seals and extrusions is driven by the residential and commercial
building markets, with the residential housing market being
far more significant to Tyman. Demand is generated from both
the construction of new housing (‘new build market’), and the
replacement of existing windows and doors and/or the addition
of new windows and doors on existing homes (‘replacement,
maintenance and improvement’ (RMI) market).
RMI represents the larger part of the market, but the extent
of this varies by geography. For example, in the US the mix of
sales into the new build market is greater than in the UK and
Europe.
Demand for the Group’s access solutions portfolio is driven by
the private commercial and industrial building markets, as well
as the public infrastructure and public building markets, such
as utility works and transport systems.
Long-term market drivers
Housing deficits will take years to eradicate
Despite near-term demand challenges in many housing
markets globally, the long-term trends remain highly
attractive. For much of the last decade, housing supply has
failed to keep pace with demand, causing a structural housing
deficit and significant increases in house prices.
In the US, housing starts have averaged around 1.25 million
annually over the last 20 years, well below the 1.5 million level
needed to sustain population growth (see Figure 1: US housing
starts). The amount of housing inventory available is also near
all-time lows, with the supply of single-family homes for sale
sitting at just over three months, well below the average six to
seven months level experienced in the last 40 years (see Figure
2: Supply of single family homes for sale).
16
Strategic ReportTyman plcAnnual Report and Accounts 2022 Figure 1: US housing starts
2.50
2.00
1.50
1.00
0.50
-
(0.50)
1980 1984 1988 1992 1996 2000 2004
Single-family
Multi-Family
2008 2012 2016 2020
Figure 2: Supply of single family homes for sale
14
12
10
m
o
n
t
h
s
o
f
s
u
p
p
l
y
8
6
4
2
0
Resale inventory has increased,
but remains
3.5
3.0
2.5
2.0
1.5
)
A
S
N
(
s
n
o
i
l
l
i
m
1.0
0.5
0.0
2
8
9
1
8
8
9
1
4
9
9
1
0
0
0
2
6
0
0
2
2
1
0
2
8
1
0
2
Inventory (LHS)
Months Supply (RHS)
Low (1982-Present): 3.3
Figure 3: Who we sell to
Fabricators and
system houses
Distributors and
wholesalers
Other
Impact of government initiatives
Government actions and involvement in the housing market
can also be a key influence on the Group’s marketplace.
In the post-pandemic world, there have been a number of
government fiscal stimulus programmes that have sought
to encourage household RMI spending, normally with
the prerequisite that the spending will improve the green
credentials of the building. A notable such scheme is the
Italian superbonus programme, where the government
effectively covered the cost of energy-efficient window
upgrades.
Governments are increasingly introducing new regulations to
improve the safety and fire integrity of buildings and make
buildings more resilient to natural disasters and climate
change, for example by protecting against hurricanes,
tornados or floods. Such regulations This drives demand for
higher quality products that meet the required safety and
technical specifications, providing a competitive advantage for
Tyman's solutions and enabling share gains.
Governments have also been introducing legislation and
building regulation codes to help improve the carbon footprint
of buildings. An example of this is the UK government’s Future
Homes Standard programme that, from 2025, requires new
homes to produce 75–80% less carbon emissions than the
standards that were in place in 2022.
Customers in the commercial and public sectors are therefore
increasingly looking for sustainable solutions to ensure
they comply with building regulations and legislation, with
requirements for Energy Performance Declarations and other
certifications ever more important, notably in the UK and
Europe. Having the expertise and ability to develop, test and
meet these certification requirements, together with strong
sustainability credentials, is a key differentiator for the Group
and an enabler of share gains.
Routes to market
Tyman’s products primarily reach the end users via window and
door fabricators, system houses and/or distributors (see Figure
3: Who we sell to). The Group uses a mixture of direct sales
(field sales force and inside sales), third party agents and online
ordering to service customers.
Fabricators
The main route to market for the Group’ is via window and door
fabricators. These customers design and manufacture complete
window and door systems for their local market, encompassing
the profile (frame), glass and hardware, with the hardware
element being the part that they would purchase from Tyman.
The fabricator customer base is more consolidated in the US
than in the UK and Europe, resulting in the US fabricators
generally having greater scale and range of products and
solutions than elsewhere.
System houses
System houses is a term used to refer to businesses that
extrude the profile element of a window. Some system houses
sell the profiles to fabricators, others design and manufacture
aluminium and PVC-based windows and doors themselves
using a proprietary, bespoke system. This customer type has
been growing in significance within the industry in recent years,
notably in Europe and the GCC, and this trend is expected to
continue for the foreseeable future.
Distributors
Another significant route to market, notably in the UK and
Europe, is via building products' distributors or wholesalers.
In the UK, this group would also include architectural
ironmongers. In countries such as Italy, smaller local
distributors are often organised into buying groups. These
customers will sell a wide range of building products, of which
window and door hardware is a relatively small component.
The key requirements for this customer segment is breadth of
product range.
1717
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc
Our divisions
North America
Routes to market
UK and Ireland
Routes to market
International
Routes to market
Fabricators
and system
houses
Distributors
and
wholesalers
Other
Fabricators
and system
houses
Distributors
and
wholesalers
Other
Fabricators
and system
houses
Distributors
and
wholesalers
Other
Sales by product category
Sales by product category
Sales by product category
Window and
door hardware
Seals and
extrusions
Access
solutions
Window and
door hardware
Seals and
extrusions
Access
solutions
Window and
door hardware
Seals and
extrusions
Access
solutions
Commercial
14%
Distribution
sites
1
Residential
86%
Manufacturing
sites
10
Employees
2,500
Commercial
17%
Distribution
sites
1
Residential
83%
Manufacturing
sites
3
Employees
400
Commercial
23%
Distribution
sites
9
Residential
77%
Manufacturing
sites
6
Employees
800
Revenue
£471.9m
(2021: £397.7m)
Revenue
£103.3m
(2021: £105.8m)
Revenue
£140.3m
(2021: £132.2m)
Adjusted operating profit
£66.9m
(2021: £65.1m)
Adjusted operating profit
£14.5m
(2021: £14.8m)
Adjusted operating profit
£21.3m
(2021: £19.5m)
Read more about our North
America division on pages
30 to 31.
Read more about our UK and
Ireland division on page 32.
Read more about our
International division on
page 34.
18
Strategic ReportTyman plcAnnual Report and Accounts 2022 Our geographical reach
Key
Manufacturing site
Manufacturing HQ
Warehouse site
Office
Office HQ
Where our products
are sold
US 58%
UK 15%
Canada 6%
Italy 5%
Other 16%
Where our products
are manufactured
US 34%
Far East (including China) 26%
Mexico 18%
Italy 11%
UK 5%
Other 6%
1919
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc
Our strategy
The Group’s Focus, Define, Grow strategy is underpinned by its sustainability roadmap.
Strategic outcomes
S
ble oper a ti o n s Sustain
F
I
N
E
a
b
l
e
U
C
O
F
a
n
i
a
t
s
u
S
S
ustainable s o l u ti o
n s
GROW
D
E
Margin expansion
Expand operating margin through driving
efficiency in operations
c
u
l
t
u
r
e
Sustainable growth
Consistently deliver profitable revenue growth
Long-term
value
creation
Engaged people
Provide a safe working environment and develop
engaged, high-performing teams
Positive impact
Protect the natural world and build more
inclusive communities
The strategy is guided by our purpose and reflects that there is still much value to be realised in the near term from activities
that will optimise our business, build a more cohesive culture and create a stronger base. Combined with the growth initiatives
that leverage the Group’s inherent strengths, our strategy aims to deliver margin expansion and consistent profitable growth,
establish a high-performance culture, and make a positive impact on the environment and in our communities. This will create
meaningful long-term value for our stakeholders.
More detail on divisional strategic initiatives can be found in the operating reviews on pages 30 to 34.
Sustainability embedded at the
core of Tyman's strategy
During 2020, the Group completed a comprehensive
materiality exercise to determine the topics that matter most
in helping to deliver a more sustainable future. The insights
gained from this process were used to define the Group’s
sustainability strategy to 2030 through a roadmap setting
out the ambitions, targets and steps that Tyman is taking to
drive positive change across three pillars covering Sustainable
Operations, Sustainable Culture and Sustainable Solutions.
These pillars are fully aligned with and reinforce the Focus,
Define, Grow strategy, as outlined on the following page.
For more information on the Group’s materiality exercise visit
https://www.tymanplc.com/sustainability/materiality-exercise.
The materiality exercise identified the 10 United Nation’s
Sustainable Development Goals (SDGs) that were most
relevant to the Group. Of these 10, Tyman’s sustainability
roadmap is particularly focussed on the three SDGs that it
believes it can make a meaningful contribution to – SDG7,
SDG11 and SDG13.
For more information on how Tyman positively contributes to
the targets under these SDGs visit https://www.tymanplc.com/
sustainability/tyman-sdgs.
20
Strategic ReportTyman plcAnnual Report and Accounts 2022
Focus
The Focus strategic pillar reflects actions to streamline
and strengthen what we have. The Group’s M&A heritage
means there is a continued need to integrate and
harmonise the structures, products, processes and systems
from prior acquisitions to create a strong platform for
the future. This will drive margin expansion, enhance the
sustainability of our operations, and lay the foundations for
sustainable, profitable growth.
Rationalise
Streamline footprint: Deliver maximum operational
efficiency and economies of scale as well as having the
right routes to market in each location to best serve
the customer.
Harmonise product portfolio: Reduce portfolio complexity
and duplication whilst also improving range positioning to
give a stronger product offer that is both more efficient to
produce and better meets customer needs.
Optimise
Tune systems and processes: Efficiently support business
operations management and enable high-quality, agile
decision support to capitalise on opportunities and better
support customers.
Continuous Improvement (CI): Make CI a way of life, by
embedding lean practices, six sigma process controls and
value analysis / value engineering activities.
See also Sustainable Operations on page 70.
Define
The Define strategic pillar centres on building cultural
cohesion across the Group to facilitate ongoing synergy
extraction, through establishing ‘One Tyman’, developing
the ‘Tyman Excellence System’, and building a sustainable
culture.
Develop the ‘Tyman Excellence System’
Establish a clearly-defined business system and enhance
groupwide capabilities through a set of processes,
playbooks and other toolkits for development and
propagation of best practice.
Establish ‘One Tyman’
Build a cohesive, high-performing culture through a
common purpose, values and Code of Business Ethics to
facilitate synergy extraction.
See also Sustainable Culture on page 74.
Market expansion
Deliver share gain through optimising routes to market,
selling existing products through new channels, and
expanding into adjacent markets.
Targeted M&A
Tyman continues to be the natural consolidator in a
fragmented market and seeks to supplement organic
growth with targeted M&A to strengthen the portfolio.
See also Sustainable Solutions on page 77.
Grow
The Grow strategic pillar aims to deliver sustainable
organic share gain, through executing well in serving
our customers, developing and launching new products,
expanding our existing channels to market, and developing
sustainable solutions. We also seek to supplement our
organic activities with M&A to further strengthen the
portfolio.
Excellent customer service
Deliver a superior customer experience, fostering long-
term partnerships through excellent delivery performance,
ease of doing business, technical support and other value-
adding services such as co-development and accredited
test services.
New product development
Develop a culture and discipline of innovation that
proactively addresses changing market dynamics,
customer requirements, aesthetic trends, and latest
technologies, to create true differentiated value.
2121
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Our strategy continued
Sustainable Operations
Safety: Transform health and safety performance through
‘safety is our first language’ programme.
Environment: Reduce environmental impact by decreasing
energy and water usage and reducing waste to landfill.
Priority UN SDGs addressed1
SDG Target 7.2
Targets:
Safety:
•
•
LTIFR < 1.0 by 2022
TRIR < 3.0 by 2026
Greenhouse gas emissions:
• 46% absolute reduction in Scope 1 and 2 emissions by
20302 (1.5°C pathway)
• 28% absolute reduction in Scope 3 emissions by 20302
(well below 2°C pathway)
•
50% reduction in Scope 1 and 2 emissions per £m
revenue by 2026 (vs. 2019 baseline)
Water use:
• Capped at 233,000m3 per annum for five water stressed
sites from 2022
Waste:
• Zero waste to landfill by 2026
Sustainable Culture
Ensure our culture enables our diverse talent to contribute to
their best and our business to create long-term value for the
business, local communities and wider society.
Plans:
• Reinforce 'Safety is our first language' programme
• Reduce water at very high water stress sites
• Decarbonise own operations
•
•
Engage suppliers to source lower carbon materials
Embed climate actions to mitigate physical and
transition risk
• Reduce waste generation through prevention,
reduction, recycling and reuse
Plans:
• Reinforce Code of Business Ethics
• Continue to strengthen Integrity Champions network
• Develop diversity and inclusion programmes
• Continue to enhance employee engagement
•
Engage with local communities to support training and
charitable causes
Sustainable Solutions
Offer innovative products and services that promote
circularity, help our customers reach net zero and create
safer, more inclusive communities.
Priority UN SDGs addressed1
SDG Target 7.3
SDG Target 11.1
Targets:
•
YoY increase in % of revenue from positive impact
products and solutions
• 100% sustainable packaging by 2026
SDG Target 13.1
Plans:
• Customer engagement on sustainable solutions
•
Embed sustainability expertise into NPD process
• Grow pipeline of positive impact products and solutions
• Optimise material content and increase level of recycled
content in NPD and legacy products
•
Eliminate hazardous substances in supply chain
• Develop sustainable packaging solutions
1 For a full breakdown of Tyman's alignment against the UN SDGs click here https://www.tymanplc.com/sustainability/tyman-sdgs..
2 Science-based targets using a 2019 baseline and material Scope 3 emissions. SBTs submitted September 2022 and awaiting SBTi validation.
22
Strategic ReportTyman plcAnnual Report and Accounts 2022
Giesse microventilation is adjustable to ensure a constant
flow of air as the size of the frame and the room changes.
Value created
The constant natural air flow provided by the Giesse
microventilation system delivers many benefits:
•
•
•
•
Existing windows can be retrofitted and upgraded,
without the need to replace the entire window.
It is easier to install and cheaper than mechanical
ventilation, which needs electrical energy and constant
maintenance as well as extensive renovation work.
Ease of use - it doesn’t require any specific technical
knowledge to be handled by the user.
It comes as standard in all Giesse tilt-and-turn
window systems.
Case study
Microventilation as standard on Giesse
tilt-and-turn hardware
Building ventilation brings fresh air to interiors, ensuring
healthy and enjoyable living and working conditions
for both residential and commercial environments. By
replacing stale air with fresher air from outside, it is
possible to regulate internal temperatures and humidity.
Since the start of the COVID-19 pandemic, building
ventilation has become increasingly important when it
comes to human health and safety hazards. Airborne virus
transmission is particularly effective in crowded, confined
indoor spaces where there is poor or no ventilation. Thus,
places of work such as offices, as well as schools and
hospitals, are particularly at risk.
The challenge
New buildings can take good ventilation into
consideration, and regulations will help ensure this is the
case. But upgrading ventilation in existing buildings poses
a challenge; installing a brand new mechanical ventilation
system in a building is a long and expensive task.
How Tyman developed a solution
Giesse includes a special “microventilation setting” as
standard in all its tilt-and-turn window systems. By turning
the handle 135° the sash opens by a few millimetres
only, allowing for a constant air flow. This minimises
condensation and provides fresh air supply for the
interiors, without compromising the temperature in
the room.
Case study
Letterplate innovation to provide
enhanced security and fire integrity
performance
designed to prevent damage to postal items. It aligns with
UN Sustainable Development Goal 11 (sustainable cities
and communities) by providing enhanced security and fire
integrity performance.
ERA have recently introduced a BSI Kitemarked letterplate
with a security cowl fitted to the inside section, giving
consumers peace of mind by restricting access to the
internal lock or any keys in the vicinity of the door.
The low projection inside-flap shields the home from
within and has a patented Hardex finish which offers
exceptional resilience and durability. The letterplate has
undergone rigorous security testing to achieve TS008
security compliance, a requirement for PAS24 enhanced
security door sets. The product range is certified for security
and durability performance along with fire certification.
The solution restricts key fishing and manipulation, and is
2323
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Key performance indicators
Like-for-like (LFL)
revenue growth
Adjusted operating
margin expansion
Return on capital
employed
5.2%
13.2%
%
4
7
1
.
%
2
5
.
%
1
4
1
.
%
9
3
1
.
%
0
4
1
.
%
2
4
1
.
%
2
3
1
.
%
7
2
.
%
8
1
-
.
%
0
6
-
.
13.3%
14% target
%
4
3
1
.
%
0
2
1
.
%
3
2
1
.
%
5
4
1
.
%
3
3
1
.
Adjusted basic EPS
Adjusted operating
Lost time incidents
34.7p
p
7
.
4
3
p
1
.
2
3
p
6
.
7
2
p
5
.
7
2
p
2
.
7
2
cash conversion
63.5%
%
2
.
2
3
1
%
9
.
0
3
1
%
4
.
2
9
5 year
average
96.7%
%
3
.
4
6
%
7
.
3
6
1.4
4
4
8
.
4
4
3
0
.
4
6
1
9
.
1
1
1
4
.
1
1
1
5
.
1
Greenhouse
gas emissions
53.8
TCO2e per £m revenue
0
.
0
8
2
.
1
7
1
.
2
7
7
.
4
6
8
.
3
5
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
15
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Purpose
Purpose
Purpose
Purpose
Purpose
Purpose
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.
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.
2022 performance
2022 performance
LFL revenue increased by
5.2%, reflecting the benefit
of share gains and pricing
actions implemented to
recover cost inflation,
partially offset by lower
market volumes. Volumes
began to moderate in the
summer of 2022 due to the
impact of inflation, rapid
rises in interest rates and the
consequent fall in consumer
confidence, which led to a
reduction in residential RMI
and housebuilding activity.
Adjusted operating margin
decreased by 100 bps to
13.2%. The pass-through of
input cost inflation had a
dilutive effect on adjusted
operating profit margins due
to the higher revenue base.
In addition, there was an
adverse operating leverage
effect from lower volumes,
which was partially offset by
self-help measures.
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%.
2022 performance
ROCE decreased by 120
bps to 13.3% as a result of
significantly higher average
working capital during the
year to protect against
supply chain disruption, and
the impact of inflation and
foreign exchange on capital
employed, partially offset by
a reduction in the average
carrying value of intangible
assets through amortisation.
This KPI is used to assess the
This KPI is used to evaluate
The lost time incident
This KPI is a key indicator
profitability of the business
the cash flow generated by
frequency rate measures
of the progress made in
and the profit generated for
operations in order to pay
the number of lost time
minimising the impact
equity holders.
down debt, return cash to
incidents per million hours
of our operations on the
Target
shareholders and make
worked (excluding COVID-19
environment, in line with
further investment in the
cases). This KPI is used
the Sustainable Operations
To improve adjusted EPS
business.
to evaluate the progress
pillar in our sustainability
performance year on year.
Target
2022 performance
Adjusted basic earnings
per share increased by
5.0% to 34.7p as a result
of our safety excellence
roadmap.
programme.
Target
To maximise conversion of
adjusted operating profit into
Target
cash over any twelve-month
To reduce the LTIFR rate
GHG emissions by improving
period whilst continuing to
each year to <1.0 by 2022.
our energy efficiency, with a
To reduce our Scope 1 and 2
of the increase in adjusted
make the necessary capital
operating profit, a reduction
investments to support the
2022 performance
in the effective tax rate
growth of the business.
Specific safety improvement
50% reduction in emissions
per £m revenue by 2026.
2022 performance
due to the release of a tax
provision no longer required,
2022 performance
plans were implemented
at four locations with the
Greenhouse gas emissions
and a slight reduction in the
Adjusted operating cash
highest incident rates
intensity decreased by
weighted average number of
conversion reduced slightly
in 2021; this led to lost
17% to 53.8 TCO2e per £m
shares due to a purchase of
to 63.5% as a result of
time incidents and other
revenue (market-based
shares by the EBT in the year.
the increase in adjusted
recordables at these sites
method). This reduction has
operating profit being offset
more than halving to 20 in
been driven by the continued
by a net working capital
2022 (2021: 42).
greening of the electrical
grid, the impact of energy
efficiency measures at plant
level and reduced production
output.
outflow due to higher
inventory and settlement
of creditors which were
much higher in 2021 due
to building inventory, as
well as increased capital
expenditure following two
years of deferral of projects
due to COVID-19 and the
operational intensity of the
recovery in demand.
This enabled the Group to
achieve a LTIFR, excluding
COVID-19 cases, of 1.4 in
2022, a 26% improvement
on 2021 and a 71%
improvement versus the
2018 baseline LTIFR of 4.8.
The Group
continually
monitors progress
in delivery of
our strategic
goals using five
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 208 to 215.
For further
information, see the
Financial review on
pages 36 to 41,
Sustainability
performance on
pages 70 to 78, and
the Climate-related
disclosures (TCFD)
on pages 50 to 69.
Link to strategy
Margin expansion
Sustainable growth
Engaged people
Positive impact
24
Strategic ReportTyman plcAnnual Report and Accounts 2022 The Group
continually
monitors progress
in delivery of
our strategic
goals using five
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 208 to 215.
For further
information, see the
Financial review on
pages 36 to 41,
Sustainability
performance on
the Climate-related
disclosures (TCFD)
on pages 50 to 69.
Link to strategy
Sustainable growth
Engaged people
Positive impact
pages 70 to 78, and
year on year.
administrative costs.
To grow revenue organically
as well as overheads and
14.0%.
This KPI is used to evaluate
This KPI is used to evaluate
This KPI is used to evaluate
the ability of the Group to
the profitability and financial
how efficiently the Group’s
grow its business organically
health of the Group.
capital is being employed to
and excludes the impact
of currency translation
and acquisitions and
divestments.
Target
Target
To maintain and improve
Target
improve profitability.
operating margins
To maintain and steadily
through management
improve ROCE, with a
of the Group’s processes
medium-term target of
2022 performance
2022 performance
LFL revenue increased by
Adjusted operating margin
bps to 13.3% as a result of
5.2%, reflecting the benefit
decreased by 100 bps to
significantly higher average
of share gains and pricing
13.2%. The pass-through of
working capital during the
actions implemented to
input cost inflation had a
year to protect against
recover cost inflation,
dilutive effect on adjusted
supply chain disruption, and
2022 performance
ROCE decreased by 120
market volumes. Volumes
to the higher revenue base.
foreign exchange on capital
began to moderate in the
In addition, there was an
employed, partially offset by
summer of 2022 due to the
adverse operating leverage
a reduction in the average
impact of inflation, rapid
effect from lower volumes,
carrying value of intangible
rises in interest rates and the
which was partially offset by
assets through amortisation.
consequent fall in consumer
self-help measures.
confidence, which led to a
reduction in residential RMI
and housebuilding activity.
Margin expansion
partially offset by lower
operating profit margins due
the impact of inflation and
5.2%
13.2%
%
4
.
7
1
%
2
.
5
%
1
.
4
1
%
9
.
3
1
%
0
.
4
1
%
2
.
4
1
%
2
.
3
1
%
5
.
4
1
%
3
.
3
1
%
7
.
2
%
8
.
1
-
%
0
.
6
-
13.3%
14% target
%
4
.
3
1
%
0
.
2
1
%
3
.
2
1
15
Like-for-like (LFL)
revenue growth
Adjusted operating
Return on capital
margin expansion
employed
Adjusted basic EPS
Adjusted operating
cash conversion
Lost time incidents
34.7p
63.5%
p
7
4
3
.
p
1
2
3
.
p
6
7
2
.
p
5
7
2
.
p
2
7
2
.
.
%
2
2
3
1
.
%
9
0
3
1
%
4
2
9
.
5 year
average
96.7%
%
3
4
6
.
%
7
3
6
.
1.4
4
4
8
4
.
4
3
0
4
.
6
1
9
1
.
1
1
4
1
.
1
1
5
1
.
Greenhouse
gas emissions
53.8
TCO2e per £m revenue
.
0
0
8
.
2
1
7
.
1
2
7
.
7
4
6
.
8
3
5
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
18
19
20
21
22
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Strategic outcomes
Purpose
Purpose
Purpose
Purpose
Purpose
Purpose
Purpose
This KPI 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.
2022 performance
Adjusted basic earnings
per share increased by
5.0% to 34.7p as a result
of the increase in adjusted
operating profit, a reduction
in the effective tax rate
due to the release of a tax
provision no longer required,
and a slight reduction in the
weighted average number of
shares due to a purchase of
shares by the EBT in the year.
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
adjusted operating profit into
cash over any twelve-month
period whilst continuing to
make the necessary capital
investments to support the
growth of the business.
2022 performance
Adjusted operating cash
conversion reduced slightly
to 63.5% as a result of
the increase in adjusted
operating profit being offset
by a net working capital
outflow due to higher
inventory and settlement
of creditors which were
much higher in 2021 due
to building inventory, as
well as increased capital
expenditure following two
years of deferral of projects
due to COVID-19 and the
operational intensity of the
recovery in demand.
The lost time incident
frequency rate measures
the number of lost time
incidents per million hours
worked (excluding COVID-19
cases). This KPI is used
to evaluate the progress
of our safety excellence
programme.
Target
To reduce the LTIFR rate
each year to <1.0 by 2022.
2022 performance
Specific safety improvement
plans were implemented
at four locations with the
highest incident rates
in 2021; this led to lost
time incidents and other
recordables at these sites
more than halving to 20 in
2022 (2021: 42).
This enabled the Group to
achieve a LTIFR, excluding
COVID-19 cases, of 1.4 in
2022, a 26% improvement
on 2021 and a 71%
improvement versus the
2018 baseline LTIFR of 4.8.
This KPI 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 sustainability
roadmap.
Target
To reduce our Scope 1 and 2
GHG emissions by improving
our energy efficiency, with a
50% reduction in emissions
per £m revenue by 2026.
2022 performance
Greenhouse gas emissions
intensity decreased by
17% to 53.8 TCO2e per £m
revenue (market-based
method). This reduction has
been driven by the continued
greening of the electrical
grid, the impact of energy
efficiency measures at plant
level and reduced production
output.
2525
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Chief Executive Officer’s review
Performance in 2022
Tyman delivered a solid trading performance in 2022 against
a strong comparative period and despite increasingly
challenging market conditions. Revenue for the year of £715.5
million (2021: £635.7 million) grew by 13% compared to 2021,
reflecting like-for-like (LFL) growth of 5% together with 8%
growth from foreign exchange movements. LFL revenue
growth reflected the benefit of pricing actions implemented
to recover cost inflation, and share gains, partially offset by
lower volumes. In addition, the Group discontinued business
with Russia and Belarus from February 2022 in response to
the war in Ukraine, and this impacted LFL revenue growth by
1 percentage point.
Underlying demand in most of the Group’s major markets
began the year strongly, driven by favourable structural
industry trends and a continuation of the post-COVID rebound
in RMI activity, some of which was supported by government
fiscal stimulus. Whilst the positive long-term structural trends
remain intact (see pages 16 to 17), underlying demand levels
began to moderate in the summer of 2022 as sharp increases
in consumer inflation fed through to rapid rises in interest
rates, the combination of which has caused a cost-of-living
crisis across most major economies and led to a reduction in
residential RMI and housebuilding activity. This moderation
in demand became significantly more pronounced during
the latter part of the year. Nevertheless, our scale and
agility enabled us to win market share, notably in our North
American and International divisions (see case study on
page 31).
Input cost inflation remained a challenge in 2022 as, whilst
many commodity prices and freight rates moderated as the
year progressed, the conflict in Ukraine put upwards pressure
on energy prices and raw material conversion costs. In
addition, labour markets have remained highly competitive
for the past 18 months, especially in the US, which has
resulted in wage inflation above long-term averages. We
have reacted with agility to these challenges and successfully
passed on rising input cost inflation to customers in the
form of general price increases and temporary surcharges,
although there is an inevitable lag in recovery due to the size
and frequency of these increases, as well as some backward-
looking customer pricing mechanisms.
The Group responded to the moderation in demand in the
second half of the year with adjustments to production
shifts, reductions in temporary labour and various tactical
cost-saving actions. The improving supply chain environment
allowed the Group to implement inventory reduction plans,
although these have been constrained to some extent by
lower shipments. We are continuing to closely monitor
developments in our supply chains, especially given
heightened geopolitical tensions in many parts of the world.
The Group also progressed structural cost-saving initiatives,
including the exit of three manufacturing facilities in the UK
and Germany which will complete in early 2023 and deliver
annualised benefits of c. £3 million.
I am delighted with our
improvement in safety
performance, which reflects
the continued progress we
have made in strengthening
our culture.”
Jo Hallas
Chief Executive Officer
26
Strategic ReportTyman plcAnnual Report and Accounts 2022 The Group’s self-help measures partially mitigated the lower
volumes, including the impact of the exit from Russia and
Belarus (these markets contributed £3 million to adjusted
operating profit in 2021). Adjusted operating profit for the
year of £94.6 million (2021: £90.0 million) grew by 5% on a
reported basis compared to 2021, reflecting a LFL decline of
3% and foreign exchange benefit of 8%. The pass-through of
input cost inflation had a dilutive effect on adjusted operating
profit margins due to the higher revenue base. Inflation and
foreign exchange movements, together with the marked
reduction in volumes shipped towards the end of the year,
had a significant impact on inventory levels, in turn leading to
a reduction in return on capital employed by 120bps to 13.3%.
This also resulted in adjusted operating cash conversion of
64% (2021: 64%) remaining below the target average of 90%.
The Define strategic pillar, which aims to build cultural cohesion
to facilitate ongoing synergy extraction, has continued to gain
momentum through embedding the ‘One Tyman’ culture and
expanding the ‘Tyman Excellence System’ for the development
and deployment of best practice. Under Lean Excellence, the
Group held its first cross-divisional Kaizen week at its Budrio
site in Italy, creating stronger awareness and engagement
with lean across site representatives from around the world,
with more such events to be conducted in 2023. As part of
the Sustainability Excellence work, a database was developed
to facilitate groupwide sharing of best practice for reducing
energy, water and waste, designing sustainable products, and
transitioning to sustainable packaging. This has already helped
to drive the development of sustainable packaging for retail
customers seeking to eliminate single-use plastic.
Health and safety
The health and safety of our people is the Group’s top priority
and is being embedded across our culture through our ‘Safety
is our First Language’ programme. Pleasingly, the Group
achieved a lost time incident frequency rate (LTIFR), excluding
COVID-19 cases, of 1.4 in 2022, a 26% improvement on 2021
and a 71% improvement versus the 2018 baseline LTIFR of 4.8.
Specific safety improvement plans were implemented at four
locations with the highest incident rates in 2021; this led to
lost time incidents and other recordables at these sites more
than halving to 20 in 2022 (2021: 42).
Whilst the Group is yet to achieve its ambitious goal of a LTIFR
of less than 1.0, the downward trend in work-related injuries
and positively trending leading indicators give us confidence
that the Group now has the solid foundations in place to
deliver world-class levels of safety performance.
Strategic progress
The Group has continued to progress its Focus, Define, Grow
strategy, which is underpinned by the three sustainability
pillars of Sustainable Operations, Sustainable Culture, and
Sustainable Solutions.
The Focus activities seek to improve operational efficiency
and structurally improve the cost base by optimising
footprint, enhancing systems and processes and reducing
complexity. Examples of such activity in 2022 included the
exit of three manufacturing facilities in the UK and Germany,
the optimisation of the distribution network for the western
US market, investment in factory automation in Italy and
the UK, and the continuation of a multi-year programme to
roll out a global ERP template. The North American product
portfolio harmonisation project made further progress, with
work moving to the hinged patio door and casement product
groups during the year. The Sustainable Operations activities
included transitioning the Group’s largest manufacturing
facility in Europe to use 80% recycled aluminium content
and installing solar panels at a major UK site. The Group has
defined its Science Based Targets and submitted these to the
SBTi for validation, with Scope 1 and 2 targets in line with a
1.5°C pathway and Scope 3 targets in line with a ‘well below
2°C’ pathway (see Climate-related disclosures on pages 50 to
69 for more information).
Under Sustainable Culture, a groupwide employee
engagement survey was conducted, followed up with focus
groups to define local and cross-site action plans. An ethics
leadership course was deployed to provide senior leaders with
the skills to create an environment of psychological safety,
further embedding the Group’s Code of Business Ethics.
The Grow activities aim to deliver organic share gains through
excellent customer service, new product development (NPD)
and market expansion. In North America, there were net
customer wins of c. US$9 million in 2022, in part reflecting
the recent investment to expand Q-Lon capacity. In our
international markets, strong progress was made with system
houses, growing this channel by 26%, whilst in the UK there
was further market penetration with innovative commercial
access solutions products. The recent reduction in demand
levels and moderation of supply chain disruption is enabling
greater emphasis on innovation and NPD, and a series of
new products were launched in 2022, with a strong pipeline
of launches scheduled for 2023. In the US, shipments have
begun from the new distribution centre in Phoenix which will
enable greater market penetration in the western US, whilst
new casement hardware designed for the Canadian market is
aimed at strengthening share in 2023.
Enabling customers to innovate through more Sustainable
Solutions is a key area of differentiation for the Group. Across
Europe and the Middle East, sustainability is an enabler of
share gains with system houses (see case study on page 35).
In North America, the Group initiated high-level sustainability
workshops with several of its largest customers during the
second half of the year to understand their sustainability
priorities and investigate ways to share insights and
collaborate on new solutions. During 2023, the Group will
be working with at least two of these customers to develop
new returnable packaging solutions to eliminate transit
packaging at their plants, enabling them to enhance their
own sustainability credentials.
2727
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Chief Executive Officer’s review continued
The Group will continue to drive market share gains through
executing well with customers, launching innovative new
products, and expanding its channels and markets. In 2023,
the Group is expected to benefit from new product launches
in all its core markets, continued share gains with system
houses, greater penetration of the western US and Canadian
markets and pricing carryover. Activities to strengthen
operational efficiency will be progressed, including supply
chain improvements to reduce cost and enhance resilience.
Together with the previously announced c. £3 million benefit
from the structural cost-savings initiatives in the UK and
Germany, these self-help measures are expected to partially
mitigate lower volumes and ongoing wage and other cost
inflation. Operating margins will remain under pressure
given the volume impact as well as a continuing elevated
level of inflation.
Tyman is well positioned to navigate the near-term
macroeconomic challenges and take advantage of the
positive structural industry growth drivers as housing
market conditions improve. Our agile and resilient business
model, together with our strategic initiatives, continues
to position Tyman well for future growth, building on our
portfolio of differentiated products, market-leading brands,
deep customer relationships and sustainability credentials.
We remain confident in our ability to deliver our margin
targets over the medium term in a more normalised
market environment.
Jo Hallas
Chief Executive Officer
Tyman's commitment to achieving its sustainability targets
is now linked to nearly 90% of its funding. During 2022 the
Group successfully completed the refinancing of both
US$75 million of US private placement notes and its
syndicated revolving credit facility (providing £210 million of
committed funding together with an accordion option of up to
£100 million). In both cases, the financing included economic
incentives for the achievement of sustainability performance
targets which align with Tyman’s sustainability roadmap.
It has been particularly pleasing that the Group’s progress
on its sustainability roadmap is leading to further external
recognition. During 2022 MSCI awarded Tyman an “AA” leader
rating and both S&P Global and Sustainalytics rank Tyman
in the top 20% of building products peers globally. Tyman
completed its first Carbon Disclosure Project (CDP) submission
in 2022 and in December 2022 Tyman became a constituent of
the FTSE4Good UK Index.
The Group is prepared for a disciplined return to M&A and
has a good pipeline of targets that meet our commercial and
strategic objectives. The strengthened platform and Tyman
Excellence System should facilitate greater synergy extraction
from acquired businesses in the future.
Outlook
The underlying fundamentals of the markets the Group
operates in remain strong. For much of the last decade,
housing supply has failed to keep pace with demand in most
of the Group’s key markets, causing a structural housing
deficit. There are also positive structural growth drivers
for residential RMI spending, including ageing housing
stock, increased focus on the energy efficiency of buildings,
strengthening building codes and a desire for greater comfort
and flexibility of the home. Taken together, these factors are
expected to provide an ongoing stimulus to the replacement
and upgrade of windows and doors.
Nevertheless, the near-term outlook remains challenging,
given high levels of inflation and interest rates are
constraining housing market affordability and activity.
The industry has limited forward visibility and it is difficult
to quantify the amount of customer destocking that took
place in the latter half of 2022, but the weakness in volumes
experienced in the second half of 2022 is expected to continue
at least during the first half of 2023, which will also be
particularly impacted by a strong comparator.
28
Strategic ReportTyman plcAnnual Report and Accounts 2022 Case study
Share gains from capacity expansion investment
In 2021, Tyman installed new state-of-the-art equipment to expand its urethane seal
manufacturing capacity at its Statesville, North Carolina facility. The business is now leveraging
this investment alongside its expertise in door seals to win incremental business.
The challenge
Value created
AFCO Industries (AFCO) is a leading producer of aluminium,
plastic and fiberglass products to the US buildings and
construction industry. During the strong post-COVID
rebound in the US housing market, AFCO was sourcing their
urethane door seals from outside the US. This caused them
to experience variable lead times from their suppliers which,
in turn, led to them carrying excessive levels of inventory at
their local manufacturing plants. Their plants did not have the
capacity to properly manage this excess inventory, resulting in
major operational challenges.
The solution
Given its geographical proximity to AFCO, and with its newly
expanded manufacturing capacity, Tyman was able to commit
to significantly shorter lead times for AFCO for their Q-Lon
urethane door seals.
Tyman’s differentiated itself by understanding the customer’s
problem and clearly articulating how its value proposition
and recent investment at its Statesville facility would generate
financial and operational benefits for AFCO by switching from
an overseas to a domestic supplier for its urethane door seals.
This allowed AFCO to reduce its door seal inventory levels,
freeing up cash to invest in its business.
“We are excited to partner with Tyman as our
preferred supplier with their Q-Lon branded
door seals. In 2022, our team actively sought to
select a domestic supplier with sufficient capacity
to produce our full product range. As a result of
this partnership, we reduced inventory holding
costs while improving operational efficiencies
within our production facility.”
Mark Clayton, Global Purchasing Manager, AFCO
2929
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Operational review
Tyman North America
£m except where stated
Revenue
Adjusted operating profit
Adjusted operating margin
Markets
The US residential housing market began 2022 robustly, but
as rising inflation and interest rates took hold in the middle of
the year, demand for both the RMI and new build segments
of the market started to soften. This softening picked up pace
towards the end of the year as 30-year fixed mortgage rates
hit 7%, double the level at the beginning of the year.
According to the US Census Bureau, US housing starts
decreased by 3.1% to 1.555 million units in 2022 whilst single
family housing starts, to which the division has proportionally
higher exposure, decreased by 10.6%. The NAHB forecasts
there was a 6.9% reduction (adjusted for inflation) in private
residential improvement spending activity in 2022. In Canada,
single family housing starts declined by 5.9% in 2022, as the
Canadian housing market was also affected by rising inflation
and interest rates.
The US commercial building sector has been more resilient
in 2022, driven by domestic manufacturing and commercial
building investment. The recently passed government
infrastructure spend legislation will provide some degree
of stimulus to the public infrastructure market in the
coming years.
Business performance and developments
LFL revenue grew by 7% in 2022, despite the strong LFL
growth recorded in the comparative period. Reported revenue
growth of 19% reflected the impact of foreign exchange.
LFL revenue growth benefitted from pricing actions and net
customer wins, which more than offset a decline in volumes
in the full-year period resulting from the challenging market
backdrop. Volumes began to decline from the middle of the
year as the US residential housing market slowed, with the
pace of decline quickening as the second half of the year
progressed.
The rapid change in market conditions provided operational
challenges but, nevertheless, the division made good
progress during 2022 with its strategic initiatives aimed
at driving share gains, reducing cost and complexity, and
improving operational resilience.
2022
471.9
66.9
14.2%
2021
397.7
65.1
16.4%
Change
19%
3%
LFL
7%
-8%
-220bps
-220bps
Central to this is the implementation of a new ERP system to
enable more streamlined ordering and logistics processes for
customers, drive further back-office efficiencies and improve
the business’s decision support capabilities; this multi-year
programme is progressing well.
Optimisation of the distribution footprint to provide
enhanced service levels is also a key component of the
strategy, and this progressed with the conversion of the
Sioux Falls facility predominantly to distribution, together
with the addition of a new distribution site in Phoenix to
service the western US market. Shipments from Phoenix
began in late 2022 as planned.
These enhancements, along with the launch of a new
website, the ongoing portfolio harmonisation activity
and new products, are enabling the business to go to
market with an improved service level and more consistent
customer experience. Coupled with ongoing close customer
engagement and customer-specific projects, these activities
have enabled further share gains. During 2022, the division
achieved new net customer wins of c. US$9 million annualised
revenue. Further success with the entry-price point sliding
patio door solution for the US market and a new entry-price
point casement lock solution for the Canadian market are
expected to help drive additional net customer wins in 2023.
Labour availability and retention continued to be a challenge
throughout the US manufacturing sector in 2022, particularly
in certain locations, although the situation steadily improved
as the year progressed. The division implemented a series of
actions to alleviate the situation, including wage increases,
recruitment programmes, retention and hiring incentive
schemes, and flexible working patterns. The resultant
workforce stabilisation helped to drive improvements in
operational efficiency and a reduction in overtime. Across
the division there is an emphasis on developing continuous
improvement and lean management capabilities to further
improve efficiency and reduce working capital. A series of
supply chain resiliency projects, aimed at risk mitigation and
reducing cost, were also initiated during 2022, including both
dual sourcing and insourcing initiatives. Collectively, these
self-help measures assisted in offsetting the adverse impact
from the challenging market conditions.
30
Strategic ReportTyman plcAnnual Report and Accounts 2022 Input cost inflation remained at elevated levels throughout
2022, and whilst there was an easing in the price of certain
commodities and freight during the second half this was
largely offset by an increase in energy conversion costs. The
division successfully implemented a series of price increases
and surcharges during the year to pass on the input cost
inflation experienced in 2021 and 2022. Nevertheless, there
was a natural lag in the recovery of input cost inflation via
pricing actions given the quantum and frequency of such
actions and reflecting the backward-looking indexation
programmes with some of our largest customers. Along with
the significant volume decline at the end of the year, this was
the primary driver of the 8% decline in LFL adjusted operating
profit (3% increase in adjusted operating profit on a reported
basis, reflecting the impact of foreign exchange). The self-help
measures noted above partially offset the negative operating
leverage effect of lower volumes, administrative cost inflation
and the operational inefficiencies that arose during the work
to optimise the footprint. The pass-through of cost inflation
had a dilutive impact on the adjusted operating margin,
leading to a LFL adjusted operating margin decrease of 220
bps to 14.2%.
Outlook
The underlying fundamentals of the US residential housing
market are strong, with years of supply lagging demand
creating a significant housing deficit. Nevertheless, the
near-term outlook remains challenging given high levels
of inflation and interest rates are continuing to constrain
housing market activity. The NAHB forecasts further double-
digit declines in single family housing starts in 2023 to below
2019 levels. Having shown resilience in 2022, the commercial
market is forecast to become more challenging in 2023,
reflecting the more difficult economic environment in the US.
The division will maintain focus on gaining market share,
notably in the western US, Canada and via its distribution
partners whilst growing its new product pipeline. The benefits
of prior-year pricing actions will help mitigate the adverse
impact of lower volumes and continued cost inflation.
Moreover, work to structurally improve the fixed cost base
and return operational efficiencies across the network to
normalised levels will remain a focus in 2023, through driving
procurement benefits and continuous improvement from
lean projects. In addition, a plan has been developed to
consolidate two manufacturing sites into one in Owatonna,
which is also expected to support profitability.
Case study
Leveraging our agility, scale and
expert touch to maintain supply chain
resilience for a key part of the US
window market
Balances are an integral component within a sash (hung)
window, providing a counterbalance to the weight of the
sash to enable the smooth, easy opening and closing of
the window. Constant force balances are used in around
half of the balances in the US market, using coiled metal
springs to provide the tension to balance the sash weight,
and AmesburyTruth has a leading position in this market.
The challenge
In late summer 2021, the major supplier of the stainless
steel grade used to make AmesburyTruth’s constant
force springs announced that it would be halting supply
of the material required for the springs in January 2022.
The material used is highly specialised and this supplier
was the key supplier not just to Tyman but to the entire
constant force balances industry. At the time there was
a 100-day lead time sourcing the material, meaning
there was limited time to find an alternative source
before a gap in supply would occur.
The solution
A core team was quickly formed involving experts from
product management, supply chain and engineering
functions to evaluate alternative sourcing strategies and
then identify a new supplier with the capabilities and
material specifications required. Using the business’s in-
house AAMA certified test laboratory enabled the team
to test and qualify samples from this supplier within a
timeframe of two months. This meant the production
quantities required were obtained from the new supplier
in time to mitigate major supply disruption to this
key part of the US window market and keep Tyman’s
customers happy.
Value created
Our extensive industry knowledge and expertise,
alongside our in-house testing capabilities, put Tyman
in a unique position to solve this problem in the short
time available. In addition to expertise, clear and
regular communication with customers was another
critical success factor, as it enabled production
schedules to be amended to ensure the most efficient
and effective use of existing stainless steel material
to meet customer demand. As a result, customer
disruption was avoided and Tyman retained all of its US
constant force balances business.
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Operational review continued
2022
103.3
14.5
14.0%
2021
105.8
14.8
14.0%
Change
-2%
-2%
–
LFL
-2%
-2%
–
mobility or where there is a need to give controlled temporary
access, via encrypted electronic keys. The product is the only
solution on the market whose IoT Kitemark certification
includes fingerprint access.
In Access 360, the division’s commercial access solutions
business, sales grew modestly in the first half, reflecting the
return of the two re-certified core product lines suspended
in 2021. Work continues to optimise the business, with an
integrated ERP system launched in the first half. A project to
consolidate the three heritage Access 360 brands (Profab,
Howe Green and Bilco) into a single highly automated facility
is well-progressed, with the majority of operations transferred
to the new site by the end of 2022.
LFL and reported adjusted operating profit decreased by 2%,
reflecting lower hardware volumes offset by the benefit of
pricing actions and close control of operating costs.
Outlook
The CPA currently expects the residential RMI segment to
decline a further 9% in 2023, whilst both the industrial and
infrastructure new build segments are expected to continue
to be more resilient and show slight growth, supported
by investment in government transport and warehousing
projects.
High levels of input cost inflation, including that caused by
adverse foreign exchange movements, will continue to create
headwinds in 2023, albeit to a lesser extent than those seen
in 2022.
The division will continue to implement pricing actions as
required to offset input cost inflation. Other key priorities
are to gain share with the recent new product launches and
strong pipeline of new products in place for launch in 2023.
Tyman UK & Ireland
£m except where stated
Revenue
Adjusted operating profit
Adjusted operating margin
Markets
Residential RMI, to which the UK&I division is predominantly
exposed, softened as 2022 progressed, as household
affordability was negatively impacted by rising inflation and
interest rates. This was exacerbated by customer destocking,
following the higher than normal levels of inventory built
during the post-pandemic rebound and associated supply chain
challenges. The latest CPA forecast expected spending in the
residential RMI market to have shrunk by 4% in 2022 (having
begun the year expecting flat growth), following 17% growth
in 2021.
The commercial and public infrastructure segments were
more resilient in 2022, supported by the continued growth
in warehousing and government spending on transport
projects such as HS2. The CPA estimates that spending on
infrastructure new build grew by 5% and non-residential new
build grew by 2% in 2022.
Overall, having signalled modest growth during the first five
months of the year, the UK construction PMI has been at or
around the neutral 50 level since June, indicating flat activity
levels across the construction sector.
Business performance and developments
Revenue decreased by 2% in 2022 on a LFL and reported basis
against a very strong comparative in 2021. The benefit of
pricing actions to pass on input cost inflation was offset by a
decline in hardware volumes, reflecting the softening in the
residential RMI market.
As customers increasingly require products and solutions
that meet ever more stringent environmental and safety
regulations, with its expertise in certification requirements and
in-house testing capabilities, the hardware business is well
placed to benefit from these trends. In 2022, new business was
secured with a major UK distributor as a result of the division’s
agility in developing a retail packaging solution using recyclable
cardboard rather than plastic clam shells. Incremental revenue
will flow from this contract from the middle of 2023.
The business also made good progress on its new product
development plans. A key launch during the second half
of 2022 was Touchkey®, an innovative smart security
door locking system that can be accessed via fingerprint,
Bluetooth, smartphone app, voice control or by traditional
key method. Touchkey® is the first product of this type on
the market with multi-operational ‘smart’ opening solution,
allowing users to access their home without the need for a
key, which is especially beneficial for residents with restricted
32
Strategic ReportTyman plcAnnual Report and Accounts 2022 Case study
Revolutionising the industry with TouchKey,
the future of keyless entry
Tyman is revolutionising the expectations and capabilities of keyless entry with the launch
of ERA's versatile door security solution, TouchKey.
Tyman is revolutionising the expectations and capabilities
of keyless entry with the launch of its versatile door security
solution, TouchKey.
Suitable for fabrication with composite or timber entrance
doors, TouchKey is the only system of its kind to combine five
different entry methods into a single door handle, namely
access via fingerprint, smartphone app, Bluetooth, voice-
activated entry or by manual key override.
When used with the ERA Protect smart home hub and app,
the door can be unlocked with a single touch locally or
remotely. Electronic keys that have timed access can also be
assigned to individuals, such as family and friends, via the app
to enable temporary controlled access to the property. Voice
command can also be utilised via the app to unlock the door
on approach, without having to physically use a smartphone.
Finally, for those that prefer to turn a key in a lock, TouchKey
also contains a hidden manual key override.
TouchKey has been independently tested to BSI’s new Smart
Residential Locking Device standard, which was developed
in conjunction with Tyman and combines the BSI Internet
of Things (IoT) Kitemark with TS 621 for mechanical security
with smart locking. This provides reassurance to users that
TouchKey has been independently certified and is a trusted
smartware product for any home.
Helen Downer, President of Tyman UK & Ireland, explains:
“TouchKey provides fabricators with smarter door
security and integrates with the ERA Protect
smart ecosystem, providing homeowners with
a flexible and easy-to-use solution for their
security. TouchKey combines our extensive
expertise in mechanical hardware with the very
latest advances in smart technology to provide
a revolutionary system that sets a new standard
for keyless entry.”
3333
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Operational review continued
Tyman International
£m except where stated
Revenue
Adjusted operating profit
Adjusted operating margin
Markets
Market demand was strong during the first half of the
year across the division’s key geographies. However,
momentum slowed in the middle of the year as the uncertain
macroeconomic environment began to weigh on consumer
confidence, most notably in Europe. Demand levels
continued to reduce significantly as the second half of the
year progressed. This was evidenced by the decline in the
Eurozone construction PMI, which began the year at a healthy
level of 56.6 but then faded to 42.6 by the end of the year.
The construction PMI for Italy, the division’s largest market,
has remained above the Eurozone average throughout
the period and peaked at a record high of 68.5 in February
2022, boosted by government fiscal stimulus programmes.
However, since May this has also slowed markedly as the
funding for these programmes was reduced, remaining below
50 for much of the second half of the year.
Outside of Europe the picture was mixed. Demand across
the GCC territories remained buoyant throughout the year
due to the benefit of high oil prices. However, the Chinese
market was significantly impacted by the regional lockdowns
that were in place for most of the year as the government
responded to the resurgence of COVID-19.
Business performance and developments
Revenue grew by 6% in 2022 on both a LFL and reported basis
against a strong comparative period, driven by pricing actions
and share growth in key markets. During 2022, volumes were
broadly unchanged year over year; however, this masked a
significant change from the first half of the year, when market
conditions were buoyant, to the second half, when
the macroeconomic backdrop became increasingly
challenging. As previously reported, business with Russia and
Belarus was discontinued from February 2022 in response
to the war in Ukraine; these markets comprised c. 5% of
divisional revenue in 2021.
Share growth was achieved through continued momentum
with both systems houses and distribution partners, as well
as delivery of the NPD pipeline. Revenue from system houses
grew by 26% in 2022, with this channel now representing
16% of the division’s revenue. Greater penetration has been
driven with the system houses by establishing partnerships
to develop solutions incorporating Tyman products in their
custom systems. The Giesse CHIC concealed hinge range has
been a particular success to date and there is a developing
pipeline of system house products employing Tyman’s
innovative pull and slide system that will be delivered to the
market from 2023 onwards.
34
2022
140.3
21.3
15.2%
2021
132.2
19.5
14.7%
Change
+6%
+10%
+50bps
LFL
+6%
+11%
+70bps
There has been good progress with the strategic initiative
to optimise and enhance the division’s seals manufacturing
business. A third Q-Lon urethane line was installed in the UK
at the start of 2022 and the German seals manufacturing
facility was closed at the end of 2022, with production moving
to the UK. Once commissioning has been completed at the
Aycliffe site, this consolidation will drive economies of scale
and concentration of seals expertise, delivering structural
improvements to profitability and enhanced customer service
levels. Progress has also continued with the programme to
drive greater levels of automation in the Budrio hardware
manufacturing facility, which will lead to improvements in
safety, efficiency and throughput.
Sustainability remains at the core of how the business
operates, and during the year there was further progress with
improving the energy efficiency of the division’s own operations
and developing a pipeline of new products with a reduced
carbon footprint. Work has continued towards eliminating
the lead content in hinges, increasing the recycled content of
aluminium used across the hardware range and reformulating
the chemical composition of Q-Lon urethane products. Having
the expertise and capability to demonstrate and deliver
strong sustainability credentials is an increasingly important
differentiator for the business in the marketplace. New
sustainable solutions include the Champion Plus Microvent
locking solution for aluminium windows or sliding doors to
help improve the ventilation of living and working spaces,
and fire-retardant Q-Lon urethane seals that are certified to
European standards for use in fire door applications.
Pricing actions were successfully implemented during
the year to recover input cost inflation. Together with the
structural actions to improve margins, the negative effect on
fixed cost absorption from flat volumes and the exit of the
business in Russia and Belarus (which contributed
c. £3 million to adjusted operating profit in 2021) was more
than offset. As a result, LFL adjusted operating profit grew
11%. On a reported basis adjusted operating profit increased
by 10%, reflecting the impact of foreign exchange.
Outlook
The market environment in 2023 is expected to remain
challenging; Globaldata currently forecasts the European
construction sector will decline by 4% in 2023. Prospects for
the GCC markets are more positive, buoyed by high oil prices,
but the near-term outlook for the Chinese market remains
highly uncertain.
The priorities for the division remain to protect and grow
market share through new product launches and further
penetration of system houses in Europe and the GCC. Work
will also continue to optimise margins through completing
the seals manufacturing footprint consolidation and further
automation of hardware manufacturing.
Strategic ReportTyman plcAnnual Report and Accounts 2022 Case study
Innovation driving share gains with European system houses
Tyman has been successfully targeting market expansion and share gains with major system
houses across Europe and the GCC for several years.
It takes time to build trusted partnerships with this segment
of the market, but once a supplier is designed and specified
into a system house’s customised solution it provides a stable
recurring source of revenue.
These benefits are now manifesting themselves with strong
sales growth to this channel, with 26% sales growth achieved
in 2022. As a result, system houses now comprise 16% of the
International division's sales.
Below are examples of two collaborations with system houses.
Innovative pull and slide solution with SAMM
SAMM (Sistemas de Aluminio del Mediterraneo) is a Spanish
system house, owner of the brand QSLINE. SAMM has used
Giesse hardware since 2016 and is also an official distributor
of QSystems aluminium systems, which integrates Giesse and
Schlegel solutions.
SAMM and Giesse have recently been working together on a
customised version of Giesse’s innovative new pull and slide
system for sliding doors.
“Our goal at QSLINE is to design innovative aluminium
solutions that help create a more sustainable world. For this,
we design window systems that meet the highest technical
requirements, moulding and adapting to their projects to
achieve excellence.
That is why we work with a global partner like Tyman, who
provide us with technological solutions that make the most
demanding projects a reality. We know that we work better
when we work together. We share our common knowledge and
energy to ensure that we achieve our collective and individual
ends.” Jose Luis Escalera, SAMM managing partner
CHIC concealed hinges with
Profils Systèmes
Profils Systèmes is one of the leading system houses in the
French market. Design, innovation and sustainability are at
the heart of the strategy of Profils Systèmes.
Since 2013, Profils Systèmes and Giesse have developed a strong
collaboration, with Giesse chosen as the supplier of accessories
for the sash and tilt and turn windows and doors.
Taking advantage of the current minimalist trend, Profils
Systèmes’ latest sash window and door series – named CUZCO
– offers the Giesse NP Ultra handles accompanied by the
Giesse CHIC concealed hinge. The latest innovation developed
by the partnership between Giesse and Profils Systèmes, a
new concealed hinge for invisible flush doors, was launched in
October 2022 by Profils Systèmes at the Batimat construction
trade show in Paris.
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Financial review
Adjusted EPS growth of 8%
reflected successful pricing
actions, share gains and self-
help measures, partially offset
by lower market volumes.”
Jason Ashton
Chief Financial Officer
36
Income statement
Revenue and profit
Revenue for the year increased by 12.6% to £715.5 million
(2021: £635.7 million), reflecting significant price increases
of £54.2 million and tariffs and surcharges of £25.8 million
to recover input cost inflation, as well as favourable foreign
exchange movements of £44.5 million. This was offset by
a decrease in volume and mix of £44.7 million driven by a
significant weakening of global macroeconomic conditions
in the second half of the year and the exit of business with
Russia and Belarus. On a LFL basis, which excludes the foreign
exchange benefit, revenue increased 5.2% compared to 2021.
Selling, general and administrative expenses increased to
£151.2 million (2021: £138.5 million), predominantly due to
foreign exchange movements of £7.2 million, and a charge
relating to restructuring programmes of £6.3 million (2021:
£0.6 million credit), with cost inflation being largely offset
by tight cost management. Adjusted selling, general and
administrative costs, increased to £127.3 million (2021: £121.7
million), largely due to of foreign exchange. On a LFL basis,
adjusted selling, general and administrative expenses were
broadly flat against 2021.
Operating profit decreased by 3.3% to £70.7 million (2021:
£73.1 million). This was driven by lower sales volumes
contributing a reduction of £14.2 million, and a charge
relating to restructuring programmes of £6.3 million
(2021: £0.6 million credit), partially offset by productivity
improvements of £7.1 million due to continuous improvement
initiatives and efficiency gains from better workforce
stability, and favourable foreign exchange movements of
£7.0 million. Pricing recovered significant material, freight
and other inflation of £80.0 million and further benefits are
to be realised in 2023 due to some of the customer pricing
mechanisms being based on a look-back indexation. Adjusted
operating profit, which excludes the restructuring charge
and amortisation of acquired intangibles, increased by 5.1%
to £94.6 million (2021: £90.0 million). Operating margin
decreased by 162 bps to 9.9% (2021: 11.5%) and adjusted
operating margin decreased by 94 bps to 13.2% (2021: 14.2%),
largely as a result of the lower volumes and dilutive effect of
pass-through pricing to recover cost inflation. On a LFL basis,
excluding the benefit of foreign exchange, adjusted operating
profit decreased 3.2%.
Profit before taxation decreased by 4.1% to £61.4 million
(2021: £64.0 million), as a result of the lower operating profit
and a marginal increase in net finance costs. Adjusted profit
before tax increased by 5.3% to £85.8 million (2021: £81.5
million), as a result of the higher adjusted operating profit.
On a LFL basis, excluding the foreign exchange benefit, this
decreased by 1.8%.
Strategic ReportTyman plcAnnual Report and Accounts 2022 Materials and input costs
£m except where stated
Aluminium
Polypropylene
Stainless steel
Zinc
Far East components4
FY 2022
Materials1
Average2
21.5
45.2
80.2
31.4
41.8
+42%
+1%
+45%
+32%
+10%
Spot3
+3%
-26%
+38%
+13%
-1%
1 FY 2022 materials cost of sales for raw materials, components and hardware for overall category.
2 Average 2022 tracker price compared with average 2021 tracker price.
3 Spot tracker price as at 31 December 2022 compared with spot tracker price at 31 December 2021.
4 Pricing on a representative basket of components sourced from the Far East by Tyman UK & Ireland.
Average prices across all categories increased further during the year, following significant inflation in 2021 and the impact of
the invasion of Ukraine. Commodity prices began to moderate through the second half, although conversion costs remain high
due to energy prices. Price increases and surcharges were implemented to recover cost increases, albeit due to customer pricing
mechanisms in North America there remains an inevitable timing lag in recovery.
Adjusting items
Certain items that are considered to be significant in nature and/or quantum have been excluded from adjusted measures,
such that the effect of these items on the Group’s results can be understood and to enable an analysis of trends in the Group’s
underlying trading performance.
Footprint restructuring – costs
Footprint restructuring – credits
Footprint restructuring – net
M&A and integration – credits
M&A and integration – net
Impairment charges
Impairment credits
Impairment – net
2022
£m
(6.3)
–
(6.3)
–
–
–
–
–
(6.3)
2021
£m
–
0.3
0.3
0.6
0.6
(1.9)
1.6
(0.3)
0.6
The footprint restructuring costs in 2022 relate to the closure
of the Hamburg facility and the consolidation of the three
UK Access solutions businesses into a single site. These
are considered to be major restructuring programmes
which required Board approval and therefore are drawn
out separately as adjusting items. These programmes were
substantially completed in 2022.
The M&A credit in the prior year related to the release
of provisions made as part of the business combination
accounting for previous acquisitions, which are no longer
required. The impairment charge in the prior year related
to impairment of certain of the Group’s intangible assets
following the commencement of a multi-year ERP upgrade.
The impairment credit related to the release of a portion of
provisions made in 2019 against inventory and other assets
associated with the new door seals product in North America,
which was no longer required.
Finance costs
Net finance costs increased marginally to £9.3 million
(2021: £9.1 million).
Interest payable on bank loans, private placement notes
and overdrafts increased to £6.9 million (2021: £5.9 million),
predominantly reflecting higher net debt due to increased
working capital and an unfavourable impact of foreign
exchange. The weighted average interest rate increased to
3.4% (2021: 3.1%), with the improved coupon rates on the new
USPP debt being largely offset by higher interest rates on the
floating RCF debt, due to the increase in global interest rates.
Interest on lease liabilities of £3.0 million increased slightly
(2021: £2.5 million), reflecting foreign exchange and higher
interest rates.
3737
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc
Financial review continued
Net finance costs in the period also benefitted from a gain
on revaluation of derivative instruments of £0.1 million
(2021: £0.1 million loss) due to the movement in foreign
exchange rates. Interest income from short-term bank
deposits amounted to $0.9 million (2021: £nil). Non-cash
charges included in net finance costs included amortisation of
capitalised borrowing costs of £0.6 million (2021: £0.5 million).
Forward exchange contracts
At 31 December 2022, the Group’s portfolio of forward
exchange contracts at fair value amounted to a net liability of
£0.2 million (2021: net liability of £0.3 million). The notional
value of the portfolio was £19.8 million (2021: £24.3 million),
comprising US dollar and Euro forward exchange contracts
with notional values of US$23.3 million and €0.7 million
respectively (2021: US$28 million; RMB30 million). These
contracts have a range of maturities up to 31 October 2023.
During the year, a gain of £0.1 million (2021: loss of £0.1
million) was recognised directly in the income statement.
Interest rate swaps
During the year, the Group entered into a cross-currency
interest rate swap, swapping US$10 million of the new USPP
debt for £3.7 million and €5.0 million to fund the Group’s UK
and International operations. At 31 December 2022, the fair
value of these swaps amounted to a net asset of £0.2 million
(2021: £nil), with a fair value gain through OCI of £0.2 million
(2021: £nil) recognised.
Taxation
The Group reported an income tax charge of £13.6 million
(2021: £14.4 million), comprising a current tax charge of £17.6
million (2021: £17.3 million) and a deferred tax credit of £4.0
million (2021: credit of £2.9 million), reflecting an effective
tax rate of 22.0% (2021: 22.5%). The decrease in the income
tax charge reflects the decrease in profit before tax, and the
benefit of the release of a transfer pricing provision no longer
required. The adjusted tax charge was £18.5 million (2021:
£18.8 million) representing an adjusted effective tax rate of
21.6% (2021: 23.1%).
During the period, the Group paid corporation tax of £21.5
million (2021: £17.7 million). This reflects a cash tax rate on
adjusted profit before tax of 25.1% (2021: 21.7%). The increase
reflects the timing of payments on account.
Earnings per share
Basic earnings per share decreased by 3.0% to 24.6 pence
(2021: 25.4 pence), reflecting the decrease in profit after
tax, partially offset by a reduction in the weighted average
number of shares due to the purchase of shares by the EBT
in the year. Adjusted earnings per share increased to 34.7
pence (2021: 32.1 pence), reflecting the increase in adjusted
profit after tax. There is no material difference between
these calculations and the fully diluted earnings per share
calculations.
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
Add: Adjusting item cash costs
Adjusted operating cash flow1
Less: Pension contributions
Less: Income tax paid
Less: Net interest paid
Less: Adjusting item cash costs
Free cash flow1
2022
60.6
0.2
21.5
(19.2)
(4.9)
0.1
1.8
60.1
(0.2)
(21.5)
(9.5)
(1.8)
27.1
2021
57.0
2.8
17.7
(16.1)
(4.5)
0.8
0.2
57.9
(2.8)
(17.7)
(8.8)
(0.2)
28.4
1 Alternative performance measures, details of which can be found from page 208.
Net cash generated from operations increased by 6.3% to £60.6 million (2021: £57.0 million), reflecting an increase in profit
before tax after adding back non-cash provision movements, partially offset by a higher net working capital outflow, and higher
income tax payments. Adjusted operating cash flow increased by 3.8% to £60.1 million, reflecting the increase in adjusted
operating profit, partially offset by the higher net working capital outflow and increased capital expenditure after two years of
deferral due to COVID-19 and the operational intensity of the recovery.
Adjusted operating cash conversion decreased slightly to 63.5% (2021: 64.3%), largely due to the working capital outflow.
Adjusted operating cash conversion has been below the target average level of 90% in the last two years as a result of the
significant investment in working capital made to protect against supply chain disruption, which has been magnified by
38
Strategic ReportTyman plcAnnual Report and Accounts 2022 inflation, with the reduction in demand in the second half of the year meaning that inventory did not reduce to the extent
planned. Inventory reduction initiatives are expected to drive a much stronger cash conversion in 2023.
Free cash flow in the period was slightly lower than 2021 at £27.1 million (2021: £28.4 million), as a result of the higher adjusted
operating cash flow offset by higher income tax payments on account, higher interest payments and adjusting item cash costs.
Debt facilities
Bank and US private placement facilities available to the Group as at 31 December 2022 were as follows:
Facility
2022 Facility
5.37% USPP
3.51% USPP
3.62% USPP
In April 2022, the Group issued US$75 million of sustainability-
linked US Private Placement notes. US$40 million of the notes
have a maturity of seven years and a base coupon rate of
3.51%, and US$35 million have a maturity of 10 years and a
base coupon rate of 3.62%.
In December 2022, the Group secured a new £210 million
sustainability-linked revolving credit facility, which may be
increased through an accordion option of up to £100 million.
The facility matures in December 2026, with an option to
extend for a further 12 months.
Both the USPP notes and the new RCF incorporate
sustainability performance targets which align with Tyman’s
sustainability roadmap (see note 18).
This incentive mechanism results in a modest reduction
or increase in the interest rate depending on performance
against these targets.
Maturity
Currency
Committed Uncommitted
Dec 2026
Multi-currency
£210.0m
£100.0m
Nov 2024
April 2029
April 2032
Liquidity
US$
US$
US$
US$45.0m
US$40.0m
US$35.0m
–
–
–
At 31 December 2022, the Group had gross debt of £250.1
million (2021: £222.8 million) and net debt of £175.5 million
(2021: £145.8 million). Adjusted net debt, which excludes
lease liabilities and capitalised borrowing costs was £115.9
million (2021: £91.7 million), with the increase reflecting
the significantly higher working capital and adverse foreign
exchange movements.
The Group had cash balances of £74.6 million (2021: £77.0
million), bank overdrafts of £16.4 million (2021: £18.9 million),
and committed but undrawn facilities of £125.8 million
(2021: £123.6 million). This provides immediately available
liquidity of £184.0 million (2021: £180.8 million). The Group
also has potential access to the uncommitted £100.0 million
accordion facility.
Covenant performance
At 31 December 2021
Leverage
Interest Cover
Test
Performance1
Headroom1
Headroom2
< 3.0×
> 4.0×
1.1x
18.2x
£69.7m
£83.3m
65.0%
78.0%
1 Calculated covenant performance consistent with the Group’s banking covenant test (banking covenants exclude the effect of IFRS 16).
2 The approximate amount by which adjusted EBITDA would need to decline before the relevant covenant is breached.
At 31 December 2022, the Group retained significant headroom on its banking covenants. Leverage at the year end was 1.0x
(2021: 0.9x), reflecting the higher level of net debt, offset by the slight increase in covenant adjusted EBITDA. Interest cover at
31 December 2022 was 18.2x (2021: 17.4x).
Balance sheet – assets and liabilities
Working capital
£m
Inventories
Trade receivables
Trade payables
Trade working capital
FY 2021
137.8
69.9
(78.4)
129.3
Mvt
4.8
(7.5)
28.0
25.3
FX
10.5
5.1
(5.4)
10.2
2022
153.1
67.5
(55.8)
164.8
Trade working capital at the year end, net of provisions, was £164.8 million (2021: £129.3 million). The trade working capital
increase at average exchange rates was £25.3 million (H1 2021: £28.4 million).
3939
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Financial review continued
The increase in inventory at average exchange rates was £4.8
million (2021: £53.9 million), largely reflecting the impact of
inflation on inventory values. Inventory levels remain elevated
following supply chain disruption and the need to de-risk
key material availability early in the year. The Group has
implemented a number of initiatives to bring inventory down to
more normalised levels, whilst maintaining service levels. The
planned reduction of inventory was negatively impacted by the
shortfall in volume shipped towards the end of the year. Trade
receivables and trade payables decreased due to lower trading
activity towards the period end, with purchasing significantly
lower given the reduced demand and elevated inventory levels.
Trade working capital increased by a further £10.2 million due
to foreign exchange movements.
Capital expenditure
Gross capital expenditure increased to £24.1 million
(2021: £20.6 million) or 1.7x depreciation (excluding RoU asset
depreciation) (2021: 1.6x), reflecting remaining catch up of
expenditure deferred from 2021, investment in new product
development, operational excellence, and ERP upgrades. Net
capital expenditure was £24.0 million (2021: £19.8 million).
Goodwill and intangible assets
At 31 December 2022, the carrying value of goodwill and
intangible assets was £457.0 million (2021: £430.1 million). The
increase in goodwill and intangible assets is driven by foreign
exchange movements, offset by the amortisation of intangible
assets through the income statement of
£19.6 million (2020: £18.8 million).
Provisions
Provisions at 31 December 2022 increased to £7.9 million
(2021: £6.2 million), with the increase primarily reflecting the
Other financial matters
Return on capital employed
restructuring provision made for the costs of closure of the
Hamburg facility of £3.3 million. This provision is expected to
be settled in the first half of 2023.
Balance sheet – equity
Shares in issue
At 31 December 2022, the total number of shares in issue was
196.8 million (2021: 196.8 million) of which 0.5 million shares
were held in treasury (2021: 0.5 million).
Employee Benefit Trust purchases
At 31 December 2022, the EBT held 2.1 million shares
(2021: 0.8 million). During the period, the EBT purchased
2.0 million shares in Tyman plc at a total cost of £6.6 million
(2021: 0.1 million shares at a total cost of £0.3 million).
Dividends
A final dividend of 9.5 pence per share (2021: 8.9 pence),
equivalent to £18.4 million based on the shares in issue as at
31 December 2022, will be proposed at the Annual General
Meeting (2021: £17.4 million). The total dividend declared
for the 2022 financial year is therefore 13.7 pence per share
(2021: 12.9 pence), in line with the Group’s progressive
dividend policy. This equates to a dividend cover of 2.50x,
within the Group’s target range of 2.0x to 2.5x adjusted EPS.
The ex-dividend date will be 27 April 2023 and the final
dividend will be paid on 26 May 2023 to shareholders on the
register at 28 April 2023.
Only dividends paid in the year have been charged against
equity in the 2022 financial statements. Dividend payments
of £25.4 million were paid to shareholders during 2022 (2021:
£15.6 million).
ROCE decreased by 120 bps to 13.3% (2021: 14.5%) as a result of significantly higher average working capital during the year
and the impact of inflation and foreign exchange movements on capital employed, offset by a reduction in the average carrying
value of intangible assets through amortisation.
Currency
Currency in the consolidated income statement
The principal foreign currencies that impact the Group’s results are the US dollar and the euro. In 2022, the sterling was weaker
against the US dollar and slightly stronger against the euro when compared with the average exchange rates in 2021.
Translational exposure
Currency
% mvt in average rate
£m Revenue impact
£m Profit impact1
1c decrease impact2
US$
(10.1%)
37.7
4.8
£379k
Euro
0.9%
(0.7)
(0.1)
£96k
Other
Total
0.8
0.1
37.8
4.9
1 Adjusted operating profit impact.
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 increase by
£37.8 million and £4.8 million respectively compared with 2021.
40
Strategic ReportTyman plcAnnual Report and Accounts 2022 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 and Ireland division from the Far East, these exposures are principally sterling against the
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 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.
The gain on foreign exchange derivatives in 2022 is £0.1 million (2021: minimal). The Group’s other transactional exposures
generally benefit from the existence of natural hedges and are immaterial.
The Group’s gross borrowings (excluding leases) are denominated in the following currencies:
£m
GBP
US dollars
Euros
Gross borrowings
2023 technical guidance
2022
2021
Gross
(24.2)
(121.5)
(42.7)
(188.4)
%
12.8
64.5
22.7
Gross
(18.8)
(105.2)
(44.7)
(168.7)
%
11.1
62.4
26.5
Working capital is expected to reduce from the current elevated level as supply chain disruption has subsided, with a net cash
inflow of £20 – £30 million across the year and minimal build at the half year.
Capital expenditure is expected to be £22 – £27 million, reflecting ongoing investment in new product development, operational
excellence, and systems upgrades.
The Group’s operating cash conversion target average remains at 90% per annum. Operating cash conversion is expected to be
higher than the target average in 2023, reflecting the expected working capital inflow.
Leverage is expected to remain below the target range of 1.0x to 1.5x covenant adjusted EBITDA absent any M&A activity.
Interest charge is expected to be £9 - £10 million, reflecting higher average interest rates, offset by lower debt.
The adjusted effective tax rate is expected to be c. 23.0% – 25.0%.
Jason Ashton
Chief Financial Officer
4141
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Managing risk
Effective risk management is integral to
how we manage the Group.
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 and internal controls
processes, including strategic, financial, operational and
regulatory/compliance matters.
The Board has reviewed the systems of Internal Control and
Risk Management within the year up to the date of approval
of the Annual Report and Accounts.
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
continued to review and updated a number of key aspects of
our risk management framework, including enhancing our
Group risk appetite and our risk management processes.
Further developments are planned in 2023 both at divisional
and Group levels to enhance skills and capabilities on risk
management as well as focussing on key areas of risk.
As an international group operating in multiple countries,
the business faces a range of risks and uncertainties where
internal and external factors influence the Group’s risk
response to managing these risks, many of which are similar
in nature to other comparable companies and are not fully
within the Group's control.
The Group’s key principal risks are those risks that are
considered material and could have a significant impact on
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
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. Areas of emerging risk where the
value of or nature of these risks are not fully known are
considered as a part of the risk management process and
other existing management processes in place.
The Group’s risks and uncertainties have been considered
in the context of the broader geopolitical and economic
environment, including the ongoing impacts of the COVID-19
pandemic, the dynamic nature of the changing trading
relationships between the US and China, the impact of the
war in Ukraine and the impact of uncertain global economic
42
conditions. In addition, we have closely monitored and
responded to industry-wide inflationary pressures and supply
chain challenges, including the availability of raw materials
and labour.
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 and emerging risks facing the
Group, including those that would threaten its business
model, future performance, solvency or liquidity. The table on
pages 45 to 49 sets out the principal risks and uncertainties
facing the Group at the date of this report and how they are
being managed or mitigated.
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
84 to 86.
Responsibilities for and structure
of risk management
The Group’s risk framework defines clear roles, responsibilities
and accountabilities for risk management across the Group
using the Four Lines of Defence model, and continues to
develop in line with our strategy.
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. Divisional risk registers
are reviewed by the Executive Directors and the Audit and Risk
Committee twice per year.
The second line of defence consists of the corporate
functions that support operational management and
are responsible for establishing Group-level policies and
procedures, including the Delegation of Authority, Code
of Business Ethics and Accounting Policies. Since 2019,
the Group has progressively added specialist resources
that strengthen its risk and assurance capabilities in
areas including group finance, tax and treasury, IT, legal
and secretariat, health, safety and sustainability, risk
management, corporate development and corporate
communications and investor relations.
Risk management is embedded in many aspects of the
Group’s leadership and performance model where key areas
of risk are inherently considered throughout the year. 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 undertaken every
month for each division.
Strategic ReportTyman plcAnnual Report and Accounts 2022 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.
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 and Treasury, Legal and
Secretariat, IT, Health, Safety and
Sustainability, Corporate Development
and Corporate Communications and
Investor Relations.
Responsible for group-level design and
maintenance of the risk framework and
internal controls and providing specialist
support across the Group.
Lines of Defence
Group
Internal Audit
(3rd Line of
Defence)
Independent
Assurance
(4th Line of
Defence)
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), customer
and commercial issues, supply chain management, 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. A review of organisational capabilities is
also undertaken annually with additional reviews taking place
as required.
In addition, this line of assurance also covers the operation of
the Group’s ethics ‘Speak Up’ reporting system which enables
employees to raise concerns confidentially over ethics and
compliance matters. All ‘SpeakUp’ reports are investigated by
the General Counsel & Company Secretary, or his nominated
investigator, who tracks the actions and reports their outcome
to the Board at every Board meeting. The Group’s ‘SpeakUp’
process has been reviewed by the Board this year.
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 continues to 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. Internal Audit effectiveness was formally reviewed
in 2022, with positive feedback from key stakeholders and no
significant areas for improvement to report.
The fourth line of defence is considered to be independent
assurance provided by third party providers or specialists
where specific assurance has been request by the Board or its
Committees.
The Group’s statutory auditors provide independent
assurance. As previously reported, the Group undertook an
external audit tender in 2021, with Deloitte replacing PwC with
effect from 2022. The transition process has been effective.
Through the work of the Group Internal Audit function and
external auditors, the Audit and Risk 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 2023, recognising the dynamic nature of
risk management and the UK’s reforms in corporate governance.
4343
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Managing risk 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
2.
Evaluate
inherent risks
3.
Review existing
controls
4.
Risk response
5.
Monitor and
review actions
6.
Risk reporting
and oversight
Top-down and
bottom-up
identification
of the Group’s
risks ensuring
emerging and
arising risks are
assessed
Considers
the gross
level of risk
to the Group
in impact and
likelihood terms
Identification and
assessment of
existing controls
to manage
the risk
Further
mitigation is
considered in
line with the
Group’s risk
appetite
Regular review
and monitoring
of risks at a
Group and
divisional level
Regular
reporting of
risk-related
matters in core
governance and
performance
processes and
reporting to the
Audit and Risk
Committee
Risk priorities in 2023
The risk priorities for the year ahead are as follows:
• Management of the impact of uncertain macroeconomic
conditions with potential decline in customer demand
in key markets ensuring plans are in place to mitigate
reduced volumes.
• Remain focussed on pricing discipline to mitigate the risk
of input cost inflation whilst remaining competitive.
• Continued strengthening in key areas to improve
operational resilience given the need for adaptability of
the Group’s supply chains, particularly in the context of
climate change and changing geopolitical circumstances.
• Continued assessment and intensification of mitigation
plans relating to IT cyber security risks.
• Continued review and response to developments in
corporate governance, including climate change (TCFD
and Transition Plan), broader ESG risks and proposed
corporate governance reforms.
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 identify 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 mainly, but not exclusively, comprises 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:
• We have continued to proactively monitor and respond
to the impact of uncertain demand in key markets in the
context of global economic downturn.
• As a result of Russia’s invasion of Ukraine in February
2022, Tyman discontinued all business with Russia and
Belarus.
44
Strategic ReportTyman plcAnnual Report and Accounts 2022 Changes since
last Annual
Report
Trend after
mitigation
No significant
changes during
the year.
Risk
Risk description
Mitigation
Business
interruption
(including
pandemic)
Risk
assessment:
Medium
Strategic
outcomes
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,
significant IT interruption,
the loss of an operating
location or geopolitical
events including significant
changes in trading
relationships such as 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.
The Group has continued to
proactively manage its response to
the ongoing impacts of the COVID-19
pandemic throughout the year. This
has included temporary cost control
measures; ongoing review of demand
and production levels, regular review
of supply chain capabilities; reviewing
stock levels and responding
accordingly. More broadly, the
Group reviews business continuity
management, IT disaster recovery
and IT security as appropriate
throughout the year. The Group also
ensures appropriate insurance cover
is maintained.
Strategy Key
Margin expansion
Sustainable growth
Engaged people
Positive impact
Trend after mitigation
Up
Same
Down NEW New risk
4545
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Managing risk continued
Risk
Risk description
Mitigation
Changes since
last Annual
Report
Trend after
mitigation
Market
conditions
Risk
assessment:
High
Strategic
outcomes
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 risk of global recession
is increasing, driven by
widespread inflation and
interest rate increases. This
is exacerbated by continued
geopolitical uncertainty such
as the war in Ukraine.
Loss of
competitive
advantage
Risk
assessment:
Medium
Strategic
outcomes
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.
46
During the
course of the
year, uncertainty
over short to
medium-term
market conditions
has increased
due to wider
macroeconomic
conditions and the
ongoing war in
Ukraine.
No significant
changes during
the year.
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.
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.
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 competitive 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.
Strategic ReportTyman plcAnnual Report and Accounts 2022 Risk
Risk description
Mitigation
Foreign
exchange risk
Risk
assessment:
Medium
Strategic
outcomes
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.
The Group must maintain
sufficient capital and
financial resources to
finance its current financial
obligations and fund the
future needs of its growth
strategy.
Liquidity and
credit risks
Risk
assessment:
Low
Strategic
outcomes
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.
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
target leverage range of 1.0x to 1.5x
adjusted EBITDA.
Changes since
last Annual
Report
Trend after
mitigation
No significant
changes during
the year.
During the
year, the Group
achieved leverage
of 1.1x adjusted
EBITDA, within
the target range
of 1.0x to 1.5x
adjusted EBITDA.
Information
security
Risk
assessment:
High
Strategic
outcomes
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.
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.
Training and
IT controls
improvements
have continued to
be implemented
during the year as
a key element of
our IT Strategy.
Strategy Key
Margin expansion
Sustainable growth
Engaged people
Positive impact
Trend after mitigation
Up
Same
Down NEW New risk
4747
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Managing risk continued
Risk
Risk description
Mitigation
The input costs for the
Group’s products include
commodities that experience
price volatility (such as oil
derivatives, steel, aluminium,
zinc, freight and natural gas).
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’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 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.
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.
Raw material
costs and
supply chain
failures
Risk
assessment:
Medium
Strategic
outcomes
Attracting
and retaining
key talent
Risk
assessment:
Medium
Strategic
outcomes
Changes since
last Annual
Report
Trend after
mitigation
The Group
continues to
recover the
majority of input
cost inflation. The
Group continues
to proactively
manage supply
chain risks.
This risk was
previously
focussed on ‘Key
executives and
personnel’ but
has now been
broadened to
attracting and
retaining key
talent across the
Group.
Compliance
with laws and
regulations
Risk
assessment:
Low
Strategic
outcomes
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.
Mitigations include:
• A comprehensive and engaging
Code of Business Ethics and
associated training
No significant
changes during
the year.
•
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
48
Strategic ReportTyman plcAnnual Report and Accounts 2022 Changes since
last Annual
Report
Trend after
mitigation
No significant
changes during
the year.
Risk
Risk description
Mitigation
Execution
of major
programmes
Risk
assessment:
Medium
Strategic
outcomes
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
take 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.
No changes in
the year.
Climate
change and
sustainability
Risk
assessment:
Medium
Strategic
outcomes
The Group maintains a 2030
sustainability roadmap, setting
out Tyman’s ESG ambitions and
targets, which include reducing GHG
emissions and growing revenues
from more sustainable solutions.
A dedicated sustainability leader is
in place in each division to drive the
execution of the roadmap.
Regular reviews are held both at a
divisional level and groupwide via
a sustainability forum. Quarterly
deep-dives are held with the ExCo to
facilitate the sharing of cross-team
learnings and identify opportunities
to synergise and/or accelerate.
Disclosures will also be enhanced
against the recommendations in
the TCFD framework, including
risk mitigation and completing a
quantitative scenario analysis.
Adverse impacts of climate
change may, over time,
affect the operations of the
Group, its supply chains
and the markets in which it
operates. This could include
physical (weather related)
risks, as well as failing to
adapt to legal, technological
and market demands for
more sustainable operations
and product solutions. More
broadly, customer, investor
and societal expectations
have never been higher for
companies to respond with
action on ESG topics.
Should the Group not reduce
its GHG emissions and
deliver its other sustainability
commitments in line with
Tyman’s targets and ambition,
it may be subject to increased
costs, adverse financial
impacts, reputational damage
and failure to attract/retain
future talent.
Strategy Key
Margin expansion
Sustainable growth
Engaged people
Positive impact
Trend after mitigation
Up
Same
Down NEW New risk
4949
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Climate-related disclosures (TCFD)
Statement of compliance
In accordance with the FCA Listing Rule LR 9.8.6R(8), Tyman has made disclosures against the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations on pages 50 to 69. The table below shows where core disclosures can be found
within the report for each recommendation, and where additional detail is reported. Tyman’s status of compliance is based
on an assessment of disclosure against the recommended elements outlined in the TCFD Implementing Guidance (2021) for
all sectors, as well as supporting guidance documents from the Task Force. The areas that are not disclosed in this report are
detailed below, together with plans to improve reporting going forward.
Recommended
disclosure
Status 2022
Reference
oversight
e a) Board
c
n
a
n
r
e
v
o
G
b) Management’s role
Comply
Core disclosure: Pages 51 to 52
Additional information: Pages 62 to 63
Comply
Core disclosure: Page 51
a) Climate-related risks
and opportunities
Comply
Additional information: Page 63
Core disclosure: Pages 53 to 61
Additional information: Page 49
b) The impact of climate-
Comply
Core disclosure: Pages 55 to 61
related risks and
opportunities
Additional information: Pages 62 to 63
c) The resilience of the
organisation’s strategy
Explain (partial
disclosure)
Core disclosure: Pages 57 to 59
Additional information: Pages 166 and 170
y
g
e
t
a
r
t
S
Financial and strategy planning: In 2022, the financial impact
was quantified for the most material climate-related risks (both
physical and transition). The Group also identified climate
considerations to be included in the Group’s capital allocation
process. Further work in 2023 is planned to socialise the
results within the Group to identify appropriate mitigation and
adaptation which will be captured in future planning cycles.
Comply
Core disclosure: Pages 53 to 61
Additional information: Pages 64 to 65
Comply
Core disclosure: Page 65
Additional information: Page 22 and pages 62 to 63
Comply
Core disclosure: Pages 64 to 65
Additional information: Page 49
assessing climate-
related risks
t a) Identifying and
n
e
m
e
g
a
n
a
M
k
s
i
R
b) Managing climate-
related risks
risk management
c) Integration into overall
a) Climate metrics
Explain (partial
disclosure)
Core disclosure: Pages 66 to 69
Additional information: Pages 55 to 61
TCFD climate metrics and targets: Tyman has increased
its disclosure from last year, including metrics and targets
for climate risk exposure. In 2023, the Group will begin the
development of an internal carbon price strategy which will
strengthen the capital allocation process.
b) GHG emissions
Comply
Core disclosure: Page 67
Additional information: Page 68
c) Climate targets
Comply
Core disclosure: Page 22 and pages 67 to 68
Additional information: Page 72 and page 77
s
t
e
g
r
a
T
d
n
a
s
c
i
r
t
e
M
50
Strategic ReportTyman plcAnnual Report and Accounts 2022
Governance
Summary of disclosure
Next steps
•
•
•
The Board is responsible for the oversight of climate-related matters, with the
CEO accountable for the management of climate-related risks and opportunities.
•
The Executive Committee (ExCo) is accountable for the daily management of
climate change, guided by the Group Health, Safety and Sustainability (HSS)
Director through monthly meetings and the Group strategy review process.
The Audit and Risk Committee (A&RC) is responsible for ensuring the integrity
of climate-related disclosures.
Embed sustainability
considerations within the capital
expenditure approval process
and develop further to include
an internal carbon price.
Governance structure for climate-related matters
Climate-related responsibilities are embedded into the Group’s governance and leadership structures. The Board has oversight,
with the CEO holding ultimate accountability, to ensure that climate action and ambition are driven into all aspects of the
business, including strategic planning, approval of capital investment projects, sourcing decisions, acquisitions and execution
of other business initiatives. The Group’s governance structure considers specific responsibilities, frequency and mechanisms of
communication, and the flow of information across different committees.
Board Oversight
D
R
A
O
B
T
N
E
M
E
G
A
N
A
M
Audit and Risk Committee
Remuneration Committee
WHEN: Discusses climate matters
at least annually
WHEN: Discusses climate matters
at least annually
WHAT: Assessment and
management of climate R&Os
and scrutiny of climate-related
disclosures
WHAT: Align remuneration policy
with the Group’s sustainability
strategy and monitor performance
against targets
Executive Committee
WHEN: Discusses sustainability, including climate-related matters at least monthly
WHAT: Reviews and approves sustainability roadmap / divisional plans (including progress against targets) and
scrutinises response to climate risks and opportunities quarterly
Tyman Sustainability Forum
Group Strategy Review
SBT & TCFD working groups
WHO: Meeting with divisional
sustainability leads, chaired by
Group HSS Director
WHO: Chaired by Group CEO,
with representation from across
functions
WHEN: Meets monthly
WHEN: Meets every two months
WHAT: Development and
sharing of best practices
across the divisions to support
implementation of the Roadmap
WHAT: Review of progress against
all groupwide strategic initiatives
WHO: X-functional representation
facilitated by external advisers
WHEN: Continual engagement
throughout the year
WHAT: Understand impacts,
risks and opportunities, and
discuss business response to
climate change
Setting near-term Science Based Targets (SBTs) illustrates how the Group’s governance processes work in practice. A cross-functional
working group comprising the Tyman Sustainability Forum and Group/divisional finance, risk, company secretariat, procurement
and operations personnel, quantified Tyman’s value chain emissions and modelled reduction pathways out to 2030. This work was
presented to and approved by the ExCo, prior to final sign-off by the Board, before it was sent to the SBTi for external validation.
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Climate-related disclosures (TCFD) continued
Board engagement related to climate change in 2022
Sustainability and climate change is a standing agenda item for the Board to ensure regular progress updates and timely
access to information on climate-related developments both internally and externally. The table below is a non-exhaustive list of
discussions and decisions made by the Board during the year.
Date
Audience Topic
Outcome
January
Board
Climate Reporting • Update on the Group’s performance against ESG ratings
March
Audit
and Risk
Committee
TCFD disclosures
• Review and sign-off of TCFD-related disclosures in the Annual Report
and Accounts
RemCo
LTIP
• Alignment of LTIP with ESG measures (including reducing Scope
1 and 2 emissions)
Board
Sustainability and
Climate Risk
• Overview of risk assessment approach and update of management
response
•
Identification of best practices regarding sustainability responsibilities
May
Board
Sustainable
Solutions
• Update on sustainable product sales and performance to increase
revenues
July
Board
August
Board
Update on
Sustainability
Plans
Science of
Climate Change
•
Showcase of sustainable-related products and solutions related
to packaging, climate resilience, circular economy and hazardous
substances
•
TCFD and SBT workstreams
• Divisional highlights on packaging and solar energy
• Upskilling on climate science, including the greenhouse effect and
concept of the global carbon budget
September
Board
SBTi submission
• Review and sign-off on the Group’s near-term (2030) targets for
Scope 1–3 emissions
• Overview of 2022 CDP submission
November
Board
2023
sustainability plan
• Review of performance against 2022 plan and sign-off 2023 plan,
including Tyman’s near-term transition plan with defined actions over
the short to medium term
December
Board
TCFD and
RCF update
• Progress review of physical and transition risks and quantified
scenario analysis
•
Sustainability-linked loan for revolving credit facility
Inclusion of climate considerations into the Group’s capital allocation process
To achieve carbon reduction targets and enhance resilience to climate impacts, the Group will continue to direct capital towards
lower carbon investments as well as climate emission reduction and resilience projects. Tyman has developed three climate
resilience considerations to be included in its capital expenditure proposal process: These considerations will be embedded into
financial approval processes in 2023 and further strengthened when the Group has established an internal price of carbon (see
page 66).
52
Strategic ReportTyman plcAnnual Report and Accounts 2022 Strategy
Summary of disclosure
Next steps
•
Financial impact quantified for the most material climate-
related risks (both physical and transition).
• Quantified physical risks from climate scenario analysis have
been incorporated into Tyman’s impairment assessment
process, concluding the Group is resilient to modelled worst-
case forward-looking climate scenarios for the potential costs
for operational damage or productivity impacts.
• Near-term climate transition plan addresses potential impacts
of climate change and seeks to mitigate risk and seize
opportunities.
•
Finalise review of quantitative assessment
and resilience to transition risk scenarios by
integrating climate modelling results into
Tyman’s financial planning processes.
• Measure performance against Tyman’s
transition plan to manage exposure to climate
risks and opportunities.
• Monitor longer-term impacts from climate
change with the intention to set long-term
goals and interim milestones within five years.
Climate resilience strategy
Tyman recognises climate change to be a potentially significant strategic issue for the business and has undertaken a detailed
climate scenario analysis to inform its understanding of current and future climate impacts.
By assessing the potential business impacts across forward-looking climate scenarios, Tyman has a better understanding of its
possible exposure to operational disruptions and building damage from physical hazards, as well as cashflow impacts from the
transition to a low carbon economy. At the same time, Tyman is well positioned to help its customers enhance climate resilience
through products designed to better withstand severe weather events, adapt to climatic fluctuations, and enhance energy efficiency.
Tyman’s strategy to enhance the climate resilience of its operations, and that of its customers, are threefold:
1. Grow the Group’s climate-resilient product portfolio: through innovation focused on products that enhance thermal efficiency,
decrease embodied carbon emissions and enhance resilience against physical climate hazards such as hurricanes and fire.
2. Plan for the transition: through investment in decarbonisation and adaptation measures, as well as adjusting management
systems to address material climate risks and opportunities (see pages 62 to 63).
3. Internalise the future cost of carbon: through the incorporation of climate-related considerations into all project capital
allocation decisions and the development of an internal carbon price to further strengthen the business case for decarbonisation.
Approach
The following TCFD-aligned ‘Strategy’ disclosure describes the process undertaken to identify and assess actual and possible
future climate-related risks and opportunities (R&Os).
The development of Tyman’s Climate Scenario Analysis approach
An overview of the Group’s approach to climate-risk management is shown below, with further information on the methodology
detailed on page 54 . This approach has allowed Tyman to better understand the potential impacts from physical and transition
climate change across its value chain.
2022
2023
2021
1
Identify
2
Qualitative
assessment
3
Prioritise
4
Quantitative
assessment
• Identify full spectrum
of climate-related
R&Os through
cross functional
engagement, desk-
based research and
peer review
• Understand
exposure across the
value chain
• Score across climate
• Rank of R&Os based
scenarios and
time horizons to
understand how
R&Os could manifest
• Assessment criteria
included vulnerability,
the magnitude of
impact and likelihood
on scoring with
internal engagement
to validate
• Assessment of
quantification
feasibility considering
assessment score,
data availability,
links to financial
performance
and alignment to
standard practice
• Define ‘value drivers’
for priority R&Os to
describe financial
outcomes.
• Build financial model
to estimate potential
future impacts on
cashflows across
climate scenarios out
to 2050 expressed as
a net present value
5
Integrate,
respond and
monitor
• Cross functional
engagement to
discuss opportunities
to integrate analysis
into existing systems
to inform decision-
making, including
financial planning
and modelling
processes
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Climate-related disclosures (TCFD) continued
Climate scenarios
TCFD encourages consideration of different possible future
climate scenarios to assess the potential impacts of climate
change. Qualitative and quantitative assessments were
conducted using publicly available projected data against
three hypothetical climate scenario sets, shown below.
These scenario sets describe the level of climate policy
intervention and market changes which lead to broad ranges
of temperature outcomes and indicate the significance of
physical vs. transition risks.
Climate risks and opportunities have been assessed across
the short (0-3 years), medium (4-9 years) and long-term
(10+ years to 2050). The short-term period aligns with
financial planning cycles, the medium-term period aligns with
the Group’s sustainability roadmap and near-term transition
plan to 2030, and the long-term period aims to account for
the longer-term nature of climate risks out to 2050 and the
impact on manufacturing/infrastructure assets.
Scenario set
Ambitious climate policy Middle of the road
High warming
Description
•
•
Early and ambitious action to
support the transition to a net
zero economy.
•
Late, disruptive and/or
unanticipated action, no
earlier than 2030.
Incentives are introduced
to put a cost on carbon and
increase demand for low
carbon products and services.
• A high warming scenario with
limited action being taken
beyond what has already
been committed, leading to
continued global warming
and significant increases
in exposures to physical
climate risks.
• NGFS’s Hot House World
scenario including REMIND-
MAgPIE 3.0-4.4 Current
policies and NDCs
IEA WEO Stated Policies
IPCC’s SSP5-8.5
•
•
• Action is slower and delayed
compared to the orderly
transition, resulting in more
extreme action taken in the
longer term to make up for
lost time.
• NGFS’s Disorderly Transition
scenario including REMIND-
MAgPIE 3.0-4.4 Delayed
Transition and Divergent
Net Zero
•
•
IEA’s WEO Announced Pledges
IPCC’s SSP2-4.5
Data sources
• NGFS’s1 Orderly Transition
including REMIND-MAgPIE
3.0-4.4 Net Zero 2050 and
Below 2oC
•
•
IEA's WEO2 Net Zero Emissions
IPCC’s3 SSP41-2.6
Temperature
outcome range
1.4oC to 1.8oC
1.4oC to 2.7OC
2.6oC to 4.4oC
1 NGFS – Network for Greening Financial Systems.
2
3
IEA’s WEO – International Energy Agency's World Energy Outlook.
IPCC – Intergovernmental Panel on Climate Change.
4 Shared Socioeconomic Pathways (SSPs) represent low, middle and high warming scenarios, which are the same ones used in the IPCC Sixth
Assessment Report to align with the latest climate science.
54
Strategic ReportTyman plcAnnual Report and Accounts 2022 Results for identified transition and physical climate-related risks
In 2021, a granular review of all risks and opportunities was undertaken. Now nearing the end of its first climate scenario
analysis, the Group is able to categorise and simplify its key risks and opportunities to describe the potential financial and
strategic impacts of a changing climate. The following tables below synthesise the assessment results, providing the qualitative
scoring outcomes for transition risks and potential financial impact for physical risks.
Market
The Group uses materials which are energy intensive to produce, including aluminium, steel, zinc and polymers. These
industries will face pressures as the cost of fossil-derived energy increases and market pressure grows for products which
facilitate end-of-life recovery/circularity. In addition, Tyman’s global operations may be exposed to higher energy prices as
suppliers pass on increased costs to their customers.
Quantified value drivers: change in electricity and natural gas prices at Tyman facilities.
Risk drivers
Strategic impact
Management response
Assessment
•
•
Scarcity of by-/
co-products from
petrochemicals.
Increased cost of
manufacturing
process.
• Raw material price
increases.
•
Energy regulation
leading to higher
energy costs.
S
M
L
Switch to low-carbon energy
sources, renewables and
implement efficiency measures
across the Group’s operations
to reduce exposure to future
higher costs for fossil fuel
consumption.
A
M
H
• Optimise product design to
reduce the weight of materials
used and select lower-impact
alternatives (including higher
levels of recycled content).
•
Initiate research into lower
carbon, more recyclable
materials.
Metrics and targets
• # and value of energy
saving opportunities
• % electricity sourced
from renewable
sources/green tariffs
•
Scope 3 (category
1a) SBT
• Changes in energy prices
•
could impact the cost of
operations.
• All suppliers could be
exposed to transition risks
with the Group’s material
and component suppliers
operating energy-intensive
activities likely to face the
greatest cost increases.
• Potential impact on
financial performance from
operating cost increases
which cannot be passed on
to customers.
•
Suppliers could cease
production of carbon-
intensive or non-
recyclable/non-circular
materials.
Key
Low risk
Low-Medium risk
Medium risk
Medium-High risk
High risk
A: Ambitious climate policy, M: Middle of the road, H: High warming, S: Short-term, M: Medium-term, L: Long-term
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Climate-related disclosures (TCFD) continued
Technology
To align with global climate goals and to achieve environmental targets, the Group will need to invest in the identification and
implementation of efficiency measures, switching to renewable sources and decarbonising across the value chain.
Quantified value drivers: capital investment in lower emissions technology.
Risk drivers
Strategic impact
Management response
Assessment
• Obsolescence or
impairment of
equipment due to
the introduction
of new climate
change-orientated
technologies.
• High cost of
transition to
lower emissions
technology.
•
Engagement with site
managers and suppliers
is needed to identify
appropriate solutions
which will direct capital to
adaptation and mitigation
activities.
• Continued investment
in low-carbon material
R&D, and upskilling of
employees throughout
the roll-out of sustainable
design tools.
• Assessment of the feasibility
of on-site solar at owned
manufacturing sites.
•
•
Introduction of a sustainable
operations database to monitor
ideas and implementation of
energy, emission and resource
efficiency and reduction
measures.
Embed climate considerations
in capital allocation and
introduce internal price of
carbon.
S
M
L
A
M
H
Metrics and targets
•
Scope 1 and 2 near-
term SBT
• # sites completing solar
deployment feasibility
studies
Policy and Legal
In the transition to net zero, there will be an increasing array of voluntary and mandatory regulations which Tyman may
need to comply with. The greatest impact is expected from carbon pricing mechanisms which are being introduced across
jurisdictions to encourage decarbonisation. Whilst Tyman is not exposed to these mechanisms today there is a possibility
this may change in the future or that suppliers may face increased taxes which are passed on in the cost of goods supplied.
In more advanced economies, tax schemes are being introduced, not only on emissions generated by the company but
also on goods/services imported to limit carbon leakage e.g., the EU Carbon Border Adjustment Mechanism proposed for
introduction in 2026 for aluminium and steel imports.
Quantified value drivers: introduction of carbon tax mechanisms impact direct operations
as well as suppliers increasing material costs.
Risk drivers
Strategic impact
Management response
Assessment
S
M
L
A
M
H
Metrics and targets
•
Scope 1, 2 and 3 near-
term SBTs
• % recycled content in
key products
•
Switch to low-carbon energy
sources, renewables and
implement efficiency measures
across the Group’s operations
to reduce exposure to potential
carbon taxes on Scope 1 and 2
emissions.
• Climate considerations
reviewed when taking ‘make or
buy’ decisions.
• Outputs from quantitative
climate scenario analysis,
which provide a value of future
potential costs, will be used to
support the case for further
investment in mitigation.
• Value chain: material
optimisation, increase in
recycled content and low-
carbon material R&D.
It is expected that the
greatest impact would be
from the pass-through of
taxes from suppliers. This
would most likely come
from large suppliers of
aluminium or polymers
which are energy
intensive.
•
Increase in taxes at Tyman
manufacturing sites which
are subject to carbon
pricing mechanisms.
• Carbon regulation
•
•
•
(e.g. carbon pricing
mechanisms).
Energy regulation
leading to higher
costs and/or
disruption to energy
availability.
Introduction of
energy efficiency
standards and use
of recycled materials
made mandatory.
56
Strategic ReportTyman plcAnnual Report and Accounts 2022 Reputation
Expectations on climate ambition, as well as the transparency and maturity of disclosure, continue to grow. Should the Group
fail to meet its targets in the near-term, or not align with the latest ambition levels, then it could see investors, customers and
talent look to other companies.
Quantified value drivers: not applicable.
Risk drivers
Strategic impact
Management response
Assessment
•
Investor concern
over climate
credentials.
• Customers seeking
lower carbon,
more sustainable
products.
•
Employees seeking
an employer actively
delivering on a
meaningful climate
ambition.
• Access to capital could
•
become limited if investors
switch to better climate-
performing stocks.
Seek to grow revenues of SDG-
aligned product categories,
identifying the subset with
climate-resilient characteristics.
• Decline in customer
demand for products
if competitors are able
to demonstrate greater
climate ambition.
• Hampered ability to
recruit/retain talent.
• Report transparently on climate-
related matters to demonstrate
ambition and performance to
external stakeholders.
• Participate in external ESG ratings.
• Align climate metrics to external
finance (e.g. USPP and RCF)
and senior management
remuneration (LTIP metrics).
S
M
L
A
M
H
Metrics and targets
• Revenues from SDG
aligned positive impact
solutions
• CDP scores
Physical
Extreme weather events as well as gradual climatic changes are expected to cause disruption across Tyman’s value chain. Climatic
events including heatwaves, floods, water stress, heavy precipitation, and storms etc. may cause damage to Tyman’s facilities as
well as causing temporary shutdowns and negative effects on working conditions which result in reduced outputs in Mexico, parts
of the US, Canada and Italy. These types of disruptions may also be experienced by Tyman’s suppliers and customers which could
have an indirect effect on Tyman in southeast Asia (particularly China) and Mexico.
Quantified value drivers: damage to assets and physical loss.
Risk drivers
Risk driver
Financial impact (NPV1 2023-2050)
•
•
Extreme weather events degrade
building materials requiring increased
maintenance and replacement.
•
Site failures where facilities are not
constructed fit for future climate risks.
Lower efficiency of labour due
to working conditions which
reduces employee comfort, or
due to disruption if the site is
temporarily out of operation.
Strategic impact
• Physical damage to an asset
increases the costs to replace or
repair damaged property.
Management response
• Update their business continuity plans
and mitigation actions to address
physical risk from a changing climate
(page 64).
Strategic impact
• Reduced efficiency and temporary
shutdowns result in loss of revenue
if orders cannot be fulfilled.
Management response
•
Implement heat stress
mitigations including increased
frequency of breaks, heat index
monitoring, provision of cooling
systems etc (page 58).
Damage
to assets
Productivity
loss
£5.3m-
£7.3m
£21.2m-
£35.2m
£5.3m-
£7.5m
£21.7m-
£38.5m
£5.4m-
£8.2m
£23.3m-
£46.7m
Ambitious
climate
policy
(SSP1-2.6)
Middle of
the road
(SSP2-4.5)
High
warming
(SSP5-8.5)
The Group considers its operations are
resilient to identified potential physical
risks on its operations, including in a
'below 2oC' scenario (see page 166).
1 The financial impact is represented as a ‘climate risk-adjusted net present value’ which is used to account for the risk associated with the
projected cash flows varying from the originally forecasted cash flows amount due to climate impacts.
Key
Low risk
Low-Medium risk
Medium risk
Medium-High risk
High risk
A: Ambitious climate policy, M: Middle of the road, H: High warming, S: Short-term, M: Medium-term, L: Long-term
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Climate-related disclosures (TCFD) continued
Deep dive on impacts from physical risks
The Group has undertaken an in-depth analysis of physical
hazards across its value chain, including key suppliers,
customers and all 19 manufacturing sites.
The outcome of this analysis showed that supply chain
operations in Asia (specifically China) and in Mexico
could face the highest levels of physical risk in the future,
reinforcing the importance of dual sourcing and business
continuity plans for critical materials and components,
as well as integrating climate risk evaluation into new
supplier selection processes.
In 2022, the Group identified nine of its manufacturing
sites (in Mexico, parts of the US, Canada and Italy) that
could be critically exposed to heat stress, water stress and
flooding and prioritised these for further investigation
and quantification of financial risk.
The forward-looking financial modelling identified the
main driver of physical damage to the nine sites assessed
was due to flooding (which accounts for riverine
and precipitation-based events). In contrast, the main
productivity loss driver is heat stress. The analysis showed
that, over time, the potential cost impact of heat stress
increases at a much faster rate than the impact of flooding
and by 2050 will be the main driver of financial losses. This
is driven by expected increases in global temperatures
and heatwave events over time.
The potential financial impacts of the physical risks of
climate change on the Group’s manufacturing operations
have been included in the Group’s financial impairment
assessment (page 166).
The Group’s facility in Brampton (Canada) faced two
months of heatwaves which required additional
temperature breaks to manage employee safety, and, in
February 2022, the Zanesville (Ohio) plant was closed for
two days due to snow and ice on the surrounding roads
which made them impassable. In both instances, the
financial impact was negligible and customer disruption
was minimal.
Tyman manufacturing locations assessed for physical risk impacts
Key
Water stress
Heat stress
Flood
Cannon Falls, Minnesota
Brampton, Ontario
Owatonna, Minnesota
Zanesville, Ohio
Budrio, Bologna
Trumann, Arkensas
Juarez, Chihuahua - two sites
Monterrey, Nuevo León
58
Strategic ReportTyman plcAnnual Report and Accounts 2022
Scope of physical climate risk assessment
The set of climate analytics software packages and global climate models used for these assessments over
the past two years is summarised in the table below.
Function
Data source
Methodology notes
Supplier and
customers
Indexed score to indicate
potential risk exposure
Moody’s Climate
Solutions
Moody’s Climate
Solutions
Tyman
manufacturing sites
Location and site-specific
analysis of potential climate
changes
Open-source climate
analytics
Physical risk exposure scoring for six different
climate hazards, including heat stress, water
stress, flooding, wildfire, hurricanes and sea-
level rise.
Physical risk exposure scoring as above for all
19 manufacturing locations. Followed by deep
dive for priority sites to investigate changes in
climate data from baseline year over the next
10-20 years. Using data from WRI Aqueduct,
CMIP 6 data from the World Bank and IPCC
WGI Interactive Atlas.
Understanding situational
characteristics and
management of risk
Interviews
Reviews with site managers to explore
historical climatic events and measures in place
or planned to manage impacts.
Value at Risk for physical
damage to asset and
productivity loss due to
climatic changes
Climate Insights tool
by CLIMsystems (part
of SLR)
Data from the Climate Insights tool shows
potential future changes in climatic variables
across 15 hazards based on global climate
models (GCMs) of the coupled model
intercomparison project (CMP6) for the periods
2010 to 2055 with a five-year step under
selected scenarios of SS1-1.9, SSP2-4.5 and
SSP5-8.5.
Deep dive on impacts from transition risk
The Group has already begun to implement a low-carbon
transition plan which will reduce exposure to transition
risks associated with the Group’s emission profile and
energy consumption mix. The qualitative climate scenario
assessment indicated that market risks posed the most
significant threat across all scenarios.
Priority transition risks for quantification were agreed
by the TCFD working group, following the methodology
described below. Impact pathways were developed for
each risk which identified specific value drivers and the
internal/external data needs and assumptions to estimate
the potential impact on future cashflows. The transition
risks subject to financial impact assessment were:
1. Carbon prices – the potential impact of a carbon tax
being applied to the Group’s own energy consumption
across its global operations (Scope 1 and 2 emissions).
2. Energy prices – changes to the electricity and natural
gas prices at Tyman’s own manufacturing plants.
3. Material prices – the potential introduction of carbon
taxes on suppliers of carbon-intensive materials
such as aluminium and steel, both globally and more
specifically for imports of these metals into Europe
under the proposed Carbon Border Adjustment
Mechanism (CBAM).
4. Additional expenditure due to low carbon mitigation
– increases in capital investments to decarbonise the
Group’s direct operations (its Scope 1 and 2 emissions)
such as procuring 100% renewable electricity, investing
in more energy efficient plant, equipment and buildings
(including on-site renewable technologies) and
neutralising hard-to-reduce residual emissions through
carbon removals from the atmosphere. Over time, these
investments reduce the on-costs from higher carbon
process and energy costs for the Group’s consumption
of electricity and natural gas.
Preliminary modelling for the financial impact of these
value drivers was completed as part of the 2022 TCFD work
programme. Further work is required to fully understand
the implications of the data and inform the development
of a financial planning model to support future decision-
making in a climate-constrained world. The Group expects
to socialise the outcomes of the quantification exercise
across the divisions in 2023 and include these costs in the
Group’s impairment modelling by the end of 2023.
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Identified climate opportunities
A climate opportunity assessment was conducted to determine the potential impact across climate scenarios and time horizons.
The assessment criteria considered the size of the opportunity (in terms of market size, efficiency gains etc.) and Tyman’s
ability to execute (in terms of alignment to strategy, cost etc.). The scoring outcomes were informed through a cross-functional
workshop in 2021 and validated in 2022.
Qualitative Opportunity Assessment
e
t
u
c
e
x
e
o
t
y
t
i
l
i
b
A
3
4
7
1
2
8
12
10
9
13
6
5
11
1 Reuse and recycling measures in production processes
2
3
Use of more efficient production and distribution processes
Increased water efficiency (at most water intensive sites)
4 Procure renewable energy and adopt energy-efficiency
measures in own operations
5 Use of new lower carbon technologies (e.g., switch from
natural gas to electric process heating)
6
Shift towards low emissions sources and/or decentralised
on-site energy generation
7 Continue to develop micro-ventilation products for indoor
climate control, ventilation, security and energy saving
8 Continue to develop hurricane resistant hardware
9 UK regulatory developments promoting energy efficiency
(e.g. Future Homes Standard)
Size of opportunity
10 Global regulation on energy performance and
thermal efficiency
11 Include flood considerations in portfolio development
12 Account for value, emissions and product spec trade-offs
to deliver sustainable operations and solutions
13 Assessing product lifecycle to reuse waste
Resource Efficiency
In September 2022, Tyman submitted its near-term (2030) science-based targets to the SBTi. As part of the work to set targets,
the Group has identified several measures which will reduce the environmental impact of its value chain. As these measures
are implemented, the Group will reduce its exposure to the future potential higher costs in a low carbon transition and will
generate cost savings for resource efficiency projects.
Opportunity
drivers
1
4
2
5
3
6
Strategic impact
• Meet expectations from
customers for lower
carbon / more resource-
efficient supply chain.
• Reduced operational costs
from resource-saving
projects.
Management response and
alignment to transition plan
• Monitor performance against
targets, including new GHG
reduction targets set in line with
climate science.
• Monitor climate-related cost
savings to reinvest capital into
climate adaptation and mitigation.
•
Introduction of a sustainable
operations database to monitor
ideas and implementation of
energy, resource efficiency and
reduction measures.
Assessment
S
M
L
A
M
H
Metrics and targets
•
Scope 1, 2 and 3 near-term SBTs
• # and value of resource
efficiency measures identified/
implemented
Key
Low opportunity
Low-Medium opportunity
Medium opportunity
Medium-High opportunity
High opportunity
A: Ambitious climate policy, M: Middle of the road, H: High warming, S: Short-term, M: Medium-term, L: Long-term
60
Strategic ReportTyman plcAnnual Report and Accounts 2022
Markets and Products
Tyman has a commercial opportunity to respond to climate-related issues through its product portfolio with sustainable
solutions that support energy efficiency savings for customers and mitigate the increasing threat from physical climate
change, as well as products that minimise environmental impact as a result of their material content (page 69).
Opportunity
drivers
7
8
9
10
11
Strategic impact
•
•
Increased sales as
customers opt for
lower carbon and more
sustainable products.
Increased sales to
customers as the need
for climate resilient/
adaptation solutions
increases.
Management response and
alignment to transition plan
•
•
Investigation and roll-out of
sustainability-driven design tools.
Engagement with suppliers to
access better data and achieve
shared goals related to climate
change.
• Grow the pipeline of positive
impact solutions (e.g. energy
saving and severe weather
protection products).
Assessment
S
M
L
A
M
H
Metrics and targets
• Revenue growth from sales of
positive impact solutions.
Resilience
The Group has also identified sustainable design tools to transition to lower-carbon materials and reduce product costs. This will
be a key contribution to both the delivery of climate-resilient solutions to customers, as well for Tyman to achieve its targets.
Opportunity
drivers
12
13
Strategic impact
• Better management of
Management response and
alignment to transition plan
climate-related risks leads
to an increase in capital
available to invest in
climate and sustainability
ambitions and implement
robust adaptation and
mitigation plans.
• Development of a near-term
transition plan and investigation
into longer-term plans out
to 2050.
•
Introduction of an internal carbon
price to support the redirection
of capital towards low-carbon
projects.
Assessment
S
M
L
A
M
H
Metrics and targets
• None
Key
Low opportunity
Low-Medium opportunity
Medium opportunity
Medium-High opportunity
High opportunity
A: Ambitious climate policy, M: Middle of the road, H: High warming, S: Short-term, M: Medium-term, L: Long-term
Deep dive on impact from
climate opportunities
The Group is committed to growing revenues of products
aligned with the UN Sustainable Development Goals (SDGs)
including those with climate-resilient characteristics. Whilst
it is difficult to predict how demand for products might
change under different climate scenarios, we expect that
demand will grow for products which are either energy
efficient, resilient to climate hazards, or have lower
embodied emissions (page 78). In response, Tyman’s
sustainability roadmap outlines plans to increase % revenue
from positive impact solutions year on year to meet
demand. Example solutions include Schlegel’s Q-Lon seals
for energy saving, and AmesburyTruth and Bilco hurricane
protection products.
This places Tyman in strong alignment with policy
developments relating to enhancing building and
infrastructure resilience. This is being discussed widely
and has featured in the IPCC’s 'Sixth Assessment Report on
Impacts, Adaptation and Vulnerability', which emphasised
the importance of the adaptation of buildings to climate
change, and the UK's Climate Change Committee's
'Advice to Government' report which included calls for
climate adaptation and resilience. In addition, the UN's
Environment Programme (UNEP), supported by World
Bank analysis, estimates that investing in more resilient
infrastructure could save $4.2 trillion from climate change
damages – emphasising the need for climate-resilient
products.
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Response: near-term climate transition plan
During the latter part of 2022, Tyman participated in the
‘Sandbox Coalition’ as one of a number of corporates from
different sectors to road-test and apply the latest guidance
from the Transition Plan Taskforce (TPT) on preparing
and disclosing a transition plan. The Group’s near-term
transition plan is reflected in the Group’s sustainability
roadmap (page 22) together with further commentary
below, detailing Tyman's ambition, plans and governance
arrangements for its delivery.
It includes the new absolute reduction targets for Scope
1 and 2 emissions (1.5°C pathway) and Scope 3 emissions
for materials purchases (well below 2°C pathway) by 2030.
A pre-COVID 2019 baseline year was selected as this was
considered more representative of normal operations.
The Group has also committed to going beyond these
absolute reductions by the end of this decade by seeking
to neutralise all residual Scope 1 and 2 emissions with
high-quality offsets, including nature-based solutions.
The plan translates the Group’s climate ambition into a
series of concrete actions over the near term. This plan
will evolve over time as the Group’s experience grows
and to reflect emerging best practices. It is integrated
into the Group’s Focus-Define-Grow business strategy to
strengthen its resilience to the physical and transition risks
of a changing climate, together with the opportunity to
grow sales of climate resilient products.
An early priority for the plan is the decarbonisation of the
Group’s own operations. In 2021, the Group developed
a playbook detailing clean energy best practices and
established a sustainable operations database to capture
and replicate opportunities to reduce energy, water,
materials and waste generation (see pages 68, 72 and 73
for further information). Energy audits and clean energy
assessments were commissioned at three of the Group’s
larger sites in Owatonna (USA), Juarez (Mexico) and Budrio
(Italy) in 2022 (page 68). These assessments will be extended
to Tyman’s larger plants in North America, in aggregate
responsible for over 75% of the Group’s Scope 1 and 2
emissions footprint. Best practices generated through these
studies will then be replicated across other facilities. Indirect
emissions from electricity consumption are responsible for
two-thirds of the Group’s Scope 1 and 2 footprint.
The Group has adopted a clean electricity hierarchy for
these emissions, focusing initially on reducing energy
consumption (KWhs) at source through energy efficiency
projects. On-site and off-site renewable projects will then
be prioritised, where viable, supplemented with 100%
renewable electricity contracts and then through the
purchase of Renewable Energy Certificates (RECs) for the
balance of the emissions footprint. Two-thirds of the Group’s
electrical consumption is attributable to sites located in
Europe and North America, with good access to green
electricity grids (100% renewable tariffs).
The Group’s Scope 1 footprint is dominated by onsite
combustion processes – typically natural gas for space
heating and process use (e.g. painting of hardware
components). These emissions sources will be prioritised in
the early years of the plan ahead of less-material emissions
from the company-owned vehicle fleet by examining
control technologies, insulation and other opportunities.
Decarbonising heat is more challenging than switching to
cleaner forms of electricity where experience of electric
and hydrogen alternatives in industrial combustion
processes is less widespread.
As further projects are identified and renewables
assessments are completed over the next two years, these
costs and associated glidepath will be further refined to
inform capital investment priorities. To support optimal
capital allocation, the Group will develop an internal price
of carbon mechanism in 2023.
Following the physical risk assessment from a changing
climate (page 58), the Group will continue to apply a
risk-based approach to improving the resilience of its
operations to heat and water stress and to increased
flooding risk from higher precipitation events. The insights
gained from climate modelling work undertaken this year
have informed the development of a new water reduction
target focused on those locations exposed to very high
water stress as well as the Group’s most water intensive
plant in Owatonna (page 72).
The Group recognises the importance of engaging its
leadership teams and key functions such as finance,
procurement, operations, product development and
commercial, as well as the wider workforce, on the low
carbon transition. Building on engagement already
undertaken in 2022, training sessions for the divisional
and Group leadership teams are planned for 2023. These
sessions will explore the science of climate change, the
Group’s climate ambition through its SBT work and their
contribution in making the near-term plan happen.
As 75% of the Group’s value chain carbon footprint is
covered by raw material purchases (Scope 3, category
1a), these emissions represent the priority for reduction
according to the SBTi net zero corporate standard1. The
Group will therefore focus on these emissions in executing
its near-term plan. Other applicable Scope 3 emissions
categories amount to 17% of the total value chain carbon
footprint. These include logistics, products in use and
employee commuting etc., which will be addressed post
2030, when the Group implements its long-term net
zero plan.
1 SBTi next zero corporate standard published in October 2021.
62
Strategic ReportTyman plcAnnual Report and Accounts 2022 Workshops with three of Group’s largest NA fabricator
customers have already resulted in plans to share
knowledge (e.g. optimising compressed air systems and
applying kaizen techniques to save energy) and to deliver
more sustainable packaging solutions and lower impact
paint finishes on components. Engaging with customers
now on these topics allows the Group to better manage
the transition and provides opportunities for competitive
advantage with more sustainable solutions.
The Group will continue to strengthen its resources
and governance around climate change. Sustainability
specialists will be recruited in 2023 to support the North
American procurement, product design and operational
energy management functions. Going forward, the Group’s
internal audit function will focus attention on delivery of the
plan and review the effectiveness of its data collection and
reporting processes. This work will facilitate the planned
external independent verification of the Group’s climate-
related data in the 2023 Annual Report and Accounts.
The Group is committed to maintaining high levels of
transparency in sustainability-related disclosures and will
continue to report its climate progress through CDP (page
28), as well as engaging with the primary ratings agencies.
Sustainability criteria were applied to the Group’s
refinancing activities during the year. Early in 2022,
the refinancing of $75 million of the Group’s US private
placement notes were linked to economic incentives for
the achievement of sustainability targets. These included
delivery against the Group’s Scope 1 and 2 emissions
reductions commitments, submitting the Scope 3 target
to SBTi and disclosing its climate performance annually
through CDP. These commitments were built on in
December 2022 when the Group linked sustainability
criteria to the margin it pays on its refinanced revolving
credit facility. These included the same Scope 1 and 2
emissions reductions commitments, together with a year-
on-year increase in revenues generated from positive-
impact solutions that contribute to the United Nations
Sustainable Development Goals, and a reduction in the
Total Recordable Incident Rate.
Like many companies calculating their Scope 3 footprint
for the first time, access to accurate data is a challenge.
To calculate the baseline data for raw material purchases
(Scope 3, category 1a), 31% of the emissions data was
derived from weight data and 69% was calculated from
spend data. The SBTi framework and climate science
requires emissions reductions to be absolute. Forecasting
growth and product mix out to the end of the decade was
also challenging and based on an assumed growth rate of
3% per annum with known material/product changes and
ready access to low carbon alternatives on the market.
Further improvements to the quality of data used to calculate
these emissions have been identified as an early priority
in the plan by using supplier-specific and actual weight
data where possible instead of generic spend data. This
will include the development of a groupwide responsible
sourcing strategy, setting out expectations for carbon data.
Further supplier engagement work will then be undertaken
to identify specific emissions factors, such as those generated
for Environmental Product Declarations (EPDs), and seek
lower carbon materials. Data collection practices will also
be enhanced when the Group transitions its emissions
reporting to a proprietary system (SpheraCloud) in 2023. A
phased implementation process is envisaged, focusing on
Scope 1 and 2 emissions first, then moving on to Scope 3
materials and finally addressing the other applicable Scope 3
categories. This system will allow the Group to move from an
annual disclosure of emissions to more frequent analysis and
tracking to facilitate emissions reductions.
Reducing Scope 3 material emissions will require
optimising product designs, using new software tools
(page 78) to minimise the use of material, select lower
impact materials and increase recycled content. Over
time, the Group will increase its R&D effort around lower
carbon materials, including lower carbon/more recyclable
polymers. Estimating the cost of the transition to lower
carbon materials is challenging at this stage but as the
Group’s experience of this topic grows and suppliers are
engaged, refinement will be made to the investments
required to deliver this transformation. Whilst modelling
the impact of these initiatives is complex and involves
many uncertainties out to 2030, there are clear levers for
action in design and material selection already available to
the Group to explore and start applying now.
As part of its target to achieve year-on-year growth in
revenue from sustainable products in use, Tyman is
looking to grow its sales of climate-resilient solutions.
In 2023, each division will engage their key customers
to understand their sustainability priorities and, more
importantly, explore how the Group can provide solutions
to their challenges and opportunities.
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Risk management
Summary of disclosure
Risk process:
• Climate change risk is assessed as part of the Group’s risk
management process and was identified as a principal risk in 2021
(page 49).
•
•
Site-specific physical risks and broader transition risks have been
documented in divisional risk registers.
Tyman’s climate scenario analysis has identified and assessed climate
risks by geography, time horizon and forward-looking scenarios. The
outcomes of this risk assessment are being integrated into the Group
risk management process.
Risk controls:
• A near-term transition plan has been formalised which sets out the
implementation of decarbonisation measures which will reduce future
emissions and exposure to climate transition risks (pages 62 to 63).
•
The Group’s capital expenditure process has been reviewed to include
climate resilience considerations going forward, which will require
mitigation measures to be identified to manage additional climate risk
exposure.
Next steps
• Climate-related key risk indicators will
be developed to target, monitor and
manage climate risks. This will further
aid the integration of climate risks into
the Group risk management process.
•
Embed actions into day-to-day
operations for the mitigation of
identified physical and transition risks
detailed in divisional risk registers.
Risk management process to identify and assess climate risk
To account for the unique characteristics and complexity around climate risks, Tyman has developed a groupwide climate risk
management process from which the outputs are integrated into the Group risk management framework. This seeks to identify
and assess existing and emerging transition and physical climate risks (and associated opportunities), followed by implementing
an appropriate risk response.
Climate risk identification
A long list of climate risks has been identified through research and engagement with cross-functional teams across the
Group via:
• Reviews with key functions, including finance, sustainability, plant managers, risk management, supply chain and product
development teams.
• Desk-based research on country/regional climate policy and regulatory requirements.
• Review of NGFS database and IEA World Energy Outlook for transition risks.
• Review of global climate models and IPCC Atlas database for physical hazard data.
Climate risk assessment and prioritisation
The identified climate risks (and opportunities) were qualitatively assessed to better understand their relative importance. Each
risk was scored and ranked across three climate scenarios and time horizons (see pages 55 to 57) against criteria including
vulnerability, likelihood and magnitude of impact. The assessment results were sense-checked with key functions from across
the business through a risk and opportunity workshop held in December 2021 to achieve consensus on the principal climate
risks to the business.
64
Strategic ReportTyman plcAnnual Report and Accounts 2022 The climate risk and opportunity assessment scoring criteria are described below.
Climate Scenarios: Ambitious Climate Policy, Middle of the Road, High Warming
Short-term
0-3 years
Medium-term
4-10 years
Long-term
10+ years
RISK SCORE
OPPORTUNITY SCORE
VULNERABILITY
LIKELIHOOD
Chance of outcome
occurring
MAGNITUDE
Size of impact
SIZE OF
OPPORTUNITY
ABILITY TO
EXECUTE
EXPOSURE
Presence of systems
that could be
affected
SENSITIVITY
Degree to which
systems could be
affected
ADAPTIVE
CAPACITY
Ability to adjust or
respond
Management and integration of climate-
related risks into risk management
During 2021, the potential impact of climate change and the
growing importance of the broader sustainability agenda was
raised to a principal risk (page 49). As such, climate-related
issues are assessed alongside Tyman’s 10 other principal
risks, including business interruption and market conditions.
This ensures appropriate management controls are in place
and allows the Group to consider the significance of climate
change and sustainability against other business risks.
In 2022, the climate risk assessment was further progressed
by quantifying the financial impacts of selected material
climate risks and opportunities. The initial results of this
quantification are described on pages 55 to 61 and will
ultimately enable further integration of climate considerations
into financial planning and risk management processes in
2023. One of the first steps in this process, which is underway,
is the incorporation of the climate-specific risk assessment
into divisional risk registers. This will give a divisional view of
the significance of identified risk and the controls put in place.
Management of climate-related risks and opportunities is
founded on Tyman’s Sustainability Roadmap, has developed
through the launch of the Group’s transition plan, and
will evolve as climate risks become operationalised within
divisional risk registers. The risk registers will be used to
define the control environment, as well as monitoring and
improvement plans to ensure suitable response plans are put
in place according to the risk assessment. Broadly, the focus
of our risk controls centre on the following areas of operation,
and are reflected in the Group’s Transition Plan (pages 62
to 63):
• Operational efficiency and decarbonisation
• Product design
•
•
Supply chain management
Site resilience mitigation and adaptation measures
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Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Climate-related disclosures (TCFD) continued
Metrics and targets
Summary of disclosure
Next steps
• Complete GHG inventory reported for Scope 1, 2 and 3 baseline
• Develop an internal carbon price
emissions for 2019.
• Near-term absolute emission reduction targets submitted to the SBTi
for validation.
•
Increased alignment, monitoring, and reporting of climate-related
metrics, as part of Tyman’s transition plan.
strategy to support the allocation of
capital to GHG-saving projects.
•
Embed additional climate-related
metrics for mitigating transition risks.
• Review and set longer-term targets by
2028 for emissions reductions out to
2050 to increase alignment with the
SBTi’s Net Zero Standard.
Climate-related metrics
Over the past two years, Tyman has advanced the metrics it uses to monitor exposure to climate-related risks and opportunities
under the TCFD framework, as well as tracking its environmental performance over time (pages 67 to 68 and pages 72 to 73).
A summary of the Group’s reporting against TCFD’s cross-industry metrics reporting categories is provided below. Where the
Group is not yet tracking against a metric or target, an explanation is provided on its intentions going forward.
Metric
Target
GHG emissions
Total Scope 1, 2 and 3 emissions (purchased
goods and services).
The Group reports its GHG inventory breakdown
as well as its emissions intensity per £m revenue
against a 2019 baseline (page 67).
Absolute emission reduction near-term targets for
Scope 1 and 2 and Scope 3 raw materials to 2030
to be validated by the SBTi (see table opposite and
page 22).
Transition
Physical
Additional metrics will be reported going forward
to track energy reduction initiatives
and percentage of energy procured from
renewable sources.
Targets to reduce operational Scope 1 and 2 as well
as purchased raw material emissions will reduce
the Group’s exposure to future transition costs.
The Group reports its consumption of water at
sites operating in areas of very high water stress
against a 2021 baseline (page 72).
Absolute water consumption at water-stressed
sites capped at 233,000m3 whilst further reduction
opportunities assessed (page 72).
Climate-related
opportunities
Revenues and percentage of total product
revenues associated with climate-resilient products
are tracked and reported from 2020 (page 69).
Year-on-year growth in positive impact products
to 2030.
Capital deployment
Not currently reported. Will be further developed
as part of the Group’s transition plan to mitigate
exposure to rising energy prices and potential for
carbon taxation.
A year-on-year increase of capital directed to
climate mitigation and adaptation.
Internal carbon
Not currently reported.
prices
Remuneration
The Group’s Long-Term Incentive Plan gives 15%
weighting for four sustainability metrics, of which
two are climate-related: growing sustainable
product revenues (year over year improvement
in UN SDG-aligned products revenues as a
proportion of total Group revenues) and reducing
Scope 1 and 2 emissions by 2026.
Development of an internal carbon price to
commence in 2023.
The Remuneration Committee keeps this under
review each year to ensure that senior leadership
across the Group is appropriately incentivised to
deliver on our climate commitments.
Additional environmental metrics (water, waste) are reported on pages 72 to 73.
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Strategic ReportTyman plcAnnual Report and Accounts 2022 Energy and GHG inventory reporting
The Group quantified its value chain carbon footprint for
its 2019 baseline year in 2021. Scope 1 and 2 emissions
accounted for 8% of emissions (43,714 TCO2e restated), and
Scope 3 emissions accounted for the remaining 92% (515,374
TCO2e), with direct purchases of raw materials accounting
for the single largest portion at 75% of the total footprint
(421,395 TCO2e). Further detail on the Group’s GHG inventory
is reported below, together with information on energy and
emission reduction measures implemented during the year.
In 2022, a target modelling assessment to set targets in line
with climate science and develop an action plan of measures
was completed. This was the first year that the Group tracked
its progress against the Scope 3 baseline (no data was
collected in 2021). Tyman submitted its targets for validation
by the SBTi in September 2022.
For more information on the Group’s value chain carbon
footprint visit https://www.tymanplc.com/sustainability.
The Group measures and reports its global greenhouse gas
(GHG) emissions according to the UK’s Streamlined Energy
and Carbon Reporting (SECR) requirements for both Scope
1 and 2 emissions as defined by the GHG Reporting and
Accounting Protocol and Reporting Standard. Emissions
are reported for all the Group’s operations worldwide over
which it has operational control (manufacturing, warehouses,
offices). Scope 3 value chain carbon emissions have been
reported for the 2019 baseline in line with best practice set
out by the SBTi.
Energy and GHG emissions
Targets
UK Scope 1 emissions (TCO2e)
Offshore (outside UK) Scope 1
emissions (TCO2e)
Total global Scope 1 direct emissions1
TCO2e
UK Scope 2 emissions (TCO2e)
Offshore (outside UK) Scope 2
emissions (TCO2e)
Total global Scope 2
indirect emissions2 TCO2e – location
based
Total global Scope 2 indirect
emissions3 TCO2e – market based
Total direct and indirect emissions
(Scope 1 & 2) TCO2e - market based
for SBT
Intensity ratio (Scope 1 & 2) TCO2e
per £m revenue – location based
Intensity ratio (Scope 1 & 2) TCO2e
per £m revenue - market based
Global energy consumption used to
calculate above emissions kWh4
Scope 3 indirect emissions5
Purchased goods and services
(metals and polymers)6 –
category 1a for SBT
2022
435
2021
549
2020
711
11,788
12,010
10,959
2019
(baseline)
2018
12,222
1,002
12,559
1,077
11,670
1,057
12,627
13,988
23,664
25,962
25,681
24,666
27,039
26,738
30,002
33,327
26,270
28,599
29,618
31,087
33,327
2030: 23,518
38,493
41,157
41,288
43,714
47,315
2026:
35.6
51.6
53.8
62.3
64.7
67.1
72.1
69.5
71.2
80.0
80.0
131,451,110
136,235,840
127,049,716
2030:
305,511
405,479
–
353,820
421,395
1 Direct emissions through combustion of fuels and process emissions using DEFRA GHG factors. Refrigerant emissions, e.g. from process and
building cooling systems, were collected for the first time in 2021.
2
3
Indirect emissions through consumption of electricity (location-based method) using the latest IEA conversion factors.
Indirect emissions through consumption of electricity (market-based method) restated from 2019 as part of the Group's SBT work to reflect
European residual emissions and IEA conversion factors.
4 Required by the UK Government’s SECR requirements using DEFRA conversion factors for natural gas and combustion of fuels for heating and
process use, electricity consumption (location-based) and transport fuel (from quantities consumed) across the Group’s global operations.
5 Emissions from raw material purchases account for 75% of the Group’s value chain carbon footprint and feature in Tyman’s near-term science-
based target to 2030 as the priority for action. A full emissions inventory for 10 applicable Scope 3 emissions categories for 2020 and 2019 as
part of the SBT baselining exercise is available online in the sustainability data table on Tyman's website. These other Scope 3 emissions amount
to 93,979 TCO2e and are not covered by the near-term target.
6 Restated in 2022 with more accurate material weight and updated price factor data as part the Group’s SBT work.
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The Group’s Scope 1 and 2 emissions in TCO2e per £m revenue
decreased by 17% in 2022 to 53.8 (2021: 64.7 restated) and an
8% reduction in absolute terms to 26,270 TCO2e (2021: 28,599
restated). This reduction has been driven by the continued
greening of the electrical grid, reduced product output and
the impact of energy efficiency measures at plant level. Nine
energy saving opportunities were captured in the Group's
sustainable operations database in 2022, estimated to save
209,000 KWhs of electricity on a fully annualised basis.
The Group is prioritising energy efficiency projects to reduce
emissions at source before pursuing green certified electrical
supply contracts. When the latter are implemented over the
next two years, the rate of emissions reduction is expected to
accelerate. See the Group’s transition plan on pages 62 to 63
for further detail.
A summary of the Group's energy and carbon reduction
projects implemented in 2021 and 2022 is presented in the
table below. Mitigating the Group's Scope 1, 2 and 3 emissions
is expected to benefit nature too (water scarcity, resource
extraction, eliminating plastic packaging) – see page 73 for
details.
2021
2022
•
LED lighting upgrades (Carlisle, Monterrey, Trumann and
Valinhos)
• Replacing propane fuelled forklifts with an electric
powered version (Cannon Falls and Sydney)
• New more energy efficient compressed air system (Budrio)
•
•
LED lighting upgrades (London, Agnosine, Budrio, Juarez
and Monterrey) coupled with movement sensors (at new
Access 360 manufacturing facility in Wolverhampton)
Local electric heaters replace natural gas fired space
heating (Fossatone) and thermostats fitted to heaters
(Trumann)
• Reduced heating hours for office areas (Agnosine)
•
Installation of 1.2MW rooftop solar array and switch
to a 100% renewable electricity tariff (ERA facility in
Wolverhampton)
• Various compressed air initiatives (Brampton and
Owatonna), namely pressure reduction, repairs and leak
reduction, optimised scheduling
Scope 1 and 21 emissions TCO2e / £m revenue
72.1
71.2
80.0
64.7
53.8
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
2022
2021
2020
2019
2018
1 According to market-based method.
68
Strategic ReportTyman plcAnnual Report and Accounts 2022 Climate-resilient product revenues
The Group’s strategy to develop sustainable solutions is covered on pages 77 to 78. A subset of the Group’s sustainable product
revenues includes those products that have a positive impact on the climate during their use by saving energy and also in
protecting buildings from climate hazards such as hurricanes, fire and flood, together with those products that reduce wider
climate impacts through their formulation in terms of lower carbon materials/circular economy principles. Climate resilient
product revenues totalled £109 million in 2022 (2021: £98 million restated), corresponding to 15% of Group revenues. The Group
aims to increase both the revenues, and the associated proportion of these products, over time.
Climate resilient product revenues
SDG alignment
Energy saving products
Climate hazard protection
Circular economy/lower carbon materials
Totals
£m
2022
76.8
2021
74.1
22.3
15.2
9.6
8.4
108.7
97.8
Case study
Environmental sustainability at the
heart of Giesse’s window and door
hardware accessories
Technological innovation and environmental sustainability
are the main pillars behind our new product development
activities. That is why the Giesse product range is choosing
to focus on a metallic coating with advanced technical
performance for its accessories: Magnelis®.
Why Magnelis® is the ideal
choice for Giesse
Magnelis® is a metal coating with a unique chemical
composition that offers three times the corrosion
resistance of standard galvanized steels. In hostile
environments with a high degree of salinity, such as
marine areas, its resistance is also more than three times
greater. It ensures an excellent level of surface protection,
which has been proven by both accelerated laboratory and
outdoor testing and certified by independent bodies.
The material also offers superior hardness and abrasion
resistance compared to a galvanized material, even in
desert and sandy areas. When exposed to the elements, it
forms a very dense zinc-based protective film that external
agents have difficulty penetrating. As a result, the entire
structure is fully protected, including from welds, scratches
and perforations.
With Giesse's window and door hardware and accessories
being sold in over 100 markets around the world its
products need to maintain their quality and integrity
in a wide range of climates. The protection afforded by
Magnelis® is therefore a critical differentiator for Giesse.
Magnelis® is 100% recyclable and contains no harmful
elements.
“The 50% lower emissions associated with
the Magnelis® solution compared to those
associated with stainless steels1 supports
Tyman's focus on reducing the emissions
associated with the manufacture of its
products, in turn fighting climate change.”
Giovanni Liconti, Divisional Sustainability Manager,
Tyman International
1 Official EPD comparison
Samples of Magnelis® at the French Corrosion Institute in Brest
(credits: ArcelorMittal Europe – Flat Products)
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Sustainability performance
Sustainable Operations
Safety excellence
Safety is a focus at every level of the Group from the Board
and ExCo to divisional leadership teams, site management
and functional 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. To view Tyman’s governance
arrangements for health and safety visit https://www.
tymanplc.com/application/files/2716/4873/2558/Tyman_
health_and_safety_management_system.pdf and to view
Tyman's health and safety policy visit https://www.tymanplc.
com/application/files/5716/2160/6164/Group_Health_and_
Safety_Policy.pdf.
All our businesses have management systems in place to
identify, control and take action on all health and safety
risks in the workplace, alongside training, audits and local
Standard
Lock Out Tag Out (LOTO)
Electrical safety
Machinery safety
Fall prevention / working at height
Manual handling and ergonomics
Fork-lift truck operations
Confined space entry
Contractor management
Chemicals management
Preventive maintenance
TOTAL
Safety performance
The Group’s headline safety metrics are the Total Recordable
Incident Rate (TRIR) for incidents requiring medical
intervention beyond first aid and the Lost Time Incident
Frequency Rate (LTIFR) for incidents involving time off work,
both expressed as per million hours worked.
In 2019, the Group set out its safety excellence ambition to
achieve world-class levels of safety performance, targeting
a LTIFR of <1.0 by 2022 and a TRIR of <3.0 by 2026. The bar
was set deliberately high, with the LTIFR target representing
an 80% reduction against the baseline year of 2018 (4.8).
Following a year of progress in 2020 the period of intense
operational activity experienced across the Group in 2021 led
to increases in both the LTIFR and TRIR, with four locations
(Budrio, Owatonna, Profab and Statesville) accounting
for most of the increases. During 2022 safety turnaround
plans were focused on these four locations, resulting in the
number of LTIs and other recordable injuries at these sites
more than halving over the year to 20 (2021: 42). These
actions translated into a Group LTIFR (excluding COVID) of
70
management reviews. Where considered appropriate for
their particular markets our businesses also seek external
certification to international health and safety standards.
All injuries resulting in first aid or more are investigated.
Lessons learned from Hi-Po near misses and other incidents
are shared across the Group and, where appropriate, Group
safety alerts are issued and corrective actions tracked to
closure.
The Group tracks its safety performance through a range
of leading and lagging indicators, which are underpinned
by groupwide safety standards focused on key areas of risk.
All manufacturing plants and distribution centres complete
a gap analysis against the requirements of each standard
and develop a corrective action plan to address areas
for improvement, followed by site-level audits to assess
compliance.
Date deployed/
planned
# corrections actions
closed
May 2020
October 2020
January 2021
May 2021
October 2021
January 2022
August 2022
December 2022
2023
2023
331
340
319
285
184
323
228
–
–
–
2010
1.4, a 26% improvement on 2021 and 71% lower against the
2018 baseline, despite continuing high levels of operational
intensity during the first half of the year. Whilst the Group is
yet to achieve its ambitious goal of a LTIFR of less than one,
this strong downward trend in work-related injuries and
positively trending leading indicators (see page 71) gives us
confidence that we have solid foundations in place to deliver
the world-class levels of safety performance that Tyman is
capable of.
The Group’s Total Recordable Incident Rate (excluding COVID)
reduced by 23% ending the year at 5.7 (2021: 7.4). For the
second consecutive year, there were no serious injuries across
the Group. Tyman’s overall safety performance continues
to compare favourably against industry benchmarks (LTIFR
between 4.5 and 8 and a TRIR of 15.5–201).
1 Source: US Bureau of Labor Statistics 20201 for other plastics
manufacturing (NAICS 32619), window and door manufacturing
(332321), hardware manufacturing (3325) and turned product and
screw, nut and bolt manufacturing (33272).
Strategic ReportTyman plcAnnual Report and Accounts 2022 Safety performance overview– all employees (permanent and temporary)1
Metric
Targets
2022
2021
2020
2019
2018
Lost Time Incident Frequency Rate
(LTIFR)2 including COVID-193
Lost Time Incident Frequency Rate
(LTIFR) excluding COVID-19
<1.0
by 2022
Total Recordable Incident Rate (TRIR)4
including COVID-19
Total Recordable Incident Rate (TRIR)
excluding COVID-19
Number of serious incidents5
<3.0
by 2026
zero
2.5
1.4
6.7
5.7
–
4.4
1.9
9.9
7.4
–
3.1
1.5
7.5
5.8
1
4.0
4.0
7.6
7.6
4
4.8
4.8
n/a
n/a
n/a
1 Covers all permanent and agency staff working under the Group’s direct supervision worldwide. Injuries to visitors or contractors reported
separately in the sustainability data table online.
2 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)
3 The Group uses the US OSHA definitions for its classification and reporting on work-related injuries and illnesses. Lost time incident reporting
includes workplace transmission cases of COVID-19 where ‘close contact’ has been identified (<2 metres for 15 minutes or more in any 24-hour
period). Incident frequency rates are expressed with and without COVID-19 cases to enable a LFL comparison with pre-pandemic years.
4 Total Recordable Incident Rate for all work-related injuries or illnesses to employees/agency staff that causes fatality, unconsciousness, lost
workdays, restricted work activity, job transfer or medical care beyond first aid, per 1 million hours worked.
5 Serious incidents are those deemed life threatening or life changing due to their severity.
Lost Time Incidents by cause 2022 vs 2021
25
20
15
10
5
0
5
2
1
0
Slip,
trip, fall
Burns &
scalds
3
1
Repetitive
strain/
motion
2022
2021
8
4
Pinch/
cut/
contact
1
0
Manual
handling
1
0
Other
COVID
One contractor lost time injury was recorded in 2023 following
a slip, trip and fall on ice in a car park resulting in four days off
(2022: 1). Gritting was underway but not complete during the
time of the incident.
The disruption to operations caused by the COVID pandemic
has been reflected in safety performance over the past three
years, impacting absences due to safety-related incidents and
those associated with workplace exposure to COVID. Given
vaccinations have now been widely deployed, the number of
COVID-related workplace transmissions noticeably reduced
during the year with eight cases across the Group (2021: 21).
21
8
The Group is encouraged to see all its leading indicators
continuing to trend positively during the year, with
record numbers of safety leadership tours (3,123), safety
improvement opportunities (13,911) and positive safety
observations (2,878) being reported, which augers well
for 2023 and beyond. The Group received no safety fines,
penalties or notices of violation from the regulatory
authorities (2021: zero).
To see Tyman’s full suite of health and safety metrics and
access the Tyman sustainability data table visit https://www.
tymanplc.com/sustainability.
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Occupational health and wellbeing
Health surveillance programmes are in place across the Group for routine exposures such as noise and airborne dust/fumes
from painting and welding. One occupational health exposure resulted in lost time during the year (2021: zero) due to
Carpal Tunnel Syndrome diagnosed at the Group’s i54 facility in Wolverhampton. Following a thorough ergonomic review of
repetitive assembly activities, modifications were made to working practices, training and mechanical aids to improve the
control of this risk.
Environment
Environmental management systems
All businesses across the Group are required to maintain policies and programmes for managing the environment, including
compliance with local regulations. These policies and management systems cover areas such as the use of materials, are aligned
to the principles of reduce, reuse and recycle and ongoing energy and water efficiency programmes. These measures help improve
production efficiencies, deliver compliance with legal obligations, reduce costs and minimise the Group’s environmental impacts.
Where considered appropriate for their particular markets, our businesses also seek external certification to international
environmental standards. Operations in the UK and Italy have environmental management systems in place that are externally
certified to the ISO 14001 international standard, representing 24% of the Group’s revenue (2021: 27% restated). The Group
believes its approach to a more sustainable future is best served through the targets and ambitions set out in its sustainability
roadmap (see page 22) rather than extending the procedural elements of ISO 14001 to other locations.
Visit https://www.tymanplc.com/sustainability/sustainable-operations to access the Group’s environmental policy.
Energy and GHG emissions
The Group reports on its energy consumption and greenhouse gas emissions within the TCFD section (see pages 67 to 68).
Water stewardship
Following the successful commissioning of a new closed-loop recovery system at the Group’s most water intensive plant in
Owatonna, which led to a reduction of 45% in water consumption in 2021, the Group examined its water use in the context
of those sites operating in areas of very high water stress as indicated by the WRI Aqueduct model and Moody’s 427 climate
risk tool. An interim target, establishing a cap of 233,000 m3, has been set for these water-stressed sites, while more detailed
assessments are undertaken to determine the scope to drive down consumption still further.
Water sources1
Municipal authorities (m3)
Ground water (m3)2
Total water usage (m3)
Total water usage at water stressed
manufacturing sites (m3)3
Water use intensity (m3 per £m
revenue) all sites
2026
Target
2022
2021
2020
2019
2018
234,361
263,683
450,956
493,369
510,973
17,926
23,904
17,426
19,965
14,985
252,287
287,587
468,382
513,334
525,958
233,0004
224,378
260,595
352
452
818
836
889
1 All the Group’s water use is captured here. There is no abstraction from rivers, lakes or other water sources.
2 Two plants (Mexico and Brazil).
3 Plants located in areas of very high water stress, as indicated by physical climate risk assessment (see page 58); three in Mexico and one in Italy,
together with the Group’s most water intensive facility in the US.
4 Capped at 10% of 2021 consumption.
Source: US Bureau of Labor Statistics 2021 for other plastics manufacturing (NAICS 32619), window and door manufacturing (332321), hardware
manufacturing (3325) and turned product and screw, nut and bolt manufacturing (33272).
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Strategic ReportTyman plcAnnual Report and Accounts 2022
Waste management
The Group generated 6,618 tonnes of waste in 2022, of which 29% was landfilled (2021: 34%) and 71% was recycled/recovered
(2021: 66%), with increased focus on recycling and diverting previously landfilled waste to incineration. Hazardous waste
represents a relatively small proportion of the total (7%), comprising materials such as oil contaminated rags, cutting fluids,
chemicals and fluorescent light tubes.
Waste arisings
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
Biodiversity
2026
Target
2022
1,765
128
4,397
2021
2,118
367
4,677
2020
2,083
418
4,363
2019
2,301
432
4,744
328
248
155
148
Zero
6,618
29
9.2
7,410
34
11.7
7019
36
12.3
7,625
36
12.4
Addressing climate change is well understood as an area for business action. Tackling species extinction and destruction of
the natural world is starting to gain momentum with initiatives such as the Taskforce for Nature-related Financial Disclosures
(TNFD) following on from TCFD. Many of the actions being taken by the Group to tackle climate change by reducing emissions
and eliminating plastic packaging will also benefit nature as set out in the table below. The Group will continue to enhance its
identification of opportunities to reduce or eliminate its impact on the natural world.
Dependency
Tyman response
The extraction of fossil fuels, minerals and metal
ores such as bauxite for aluminium, impact the
natural world.
By taking a circular approach to the design and manufacture
of its products and specifying higher levels of recycled
content, these impacts can be reduced (see page 78).
Water is important at the Group’s manufacturing facilities
where die-casting and painting processes take place.
By reducing the Group’s consumption of water, especially in
areas suffering high levels of water stress, these impacts can
be reduced (see page 72).
GHG emissions negatively impact the natural world, with
climate warming known to cause species extinctions.
By taking action to reduce GHG emissions, the Group can
reduce these impacts (see pages 67 to 68).
Packaging is responsible for habitat destruction and pollution
on land, rivers and the oceans. Similarly, discharges of
hazardous substances in the supply chain can impact the
natural world.
Procuring paper-based packaging from responsible sources
(e.g. FSC certified) and eliminating single-use plastics and
hazardous substances reduces these impacts (see page 78).
Natural capital improvement and nature-based solutions can
also be part of the solution to some sustainability challenges.
Carbon removal projects such as forestry can play an
important role in tackling hard-to-reduce GHG emissions.
Visit https://www.tymanplc.com/sustainability to access Tyman’s sustainability data online.
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Sustainable Culture
Ethics and compliance
The Group believes that high standards of business ethics are
integral to the development of its culture and future growth
and we seek to maintain a reputation for integrity in all of our
business dealings and our relationships with authorities and
our workforce. The Group’s Code of Business Ethics (CoBE),
was published in 2021 and fully deployed across the Group in
early 2022.
Visit https://www.tymanplc.com/sustainability/sustainable-
culture/ethics to see the Group’s Code of Business Ethics.
In 2022 we focused on supporting the Group’s leaders
and Integrity Champions to develop a culture of integrity.
Accordingly, a ‘Leading with Integrity’ (LWI) workshop was
designed and deployed to help leaders appreciate how they
can take practical steps to foster environments that are
conducive to ethical decision-making. During 2022 a number
of these LWI workshops were held in the UK, Italy and the USA
and the content also reformatted for online delivery so that
it can be readily deployed to leaders in other locations across
the world.
The Integrity Champions network was launched in 2022 to
help localise Business Ethics and Compliance programme
materials and initiatives, create local points of contact for
employees, champion business ethics and deliver training,
such as the discussion of business ethics topics. In 2023,
the Group plans to further strengthen the network through
regularly scheduled conference calls and events.
Speak Up
The freedom to raise concerns is 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”. Leaders and Integrity Champions have been
trained, via the LWI workshops, to foster psychologically safe
environments that encourage speaking up, and the CoBE sets
out how employees can then raise any concerns.
Eleven speak-up reports were received by the General Counsel
& Company Secretary in 2022 (2021: 10) and investigated, with
the findings of each investigation and any corrective action
taken reported to the Board. In the period three of the reports
were determined to be breaches of the CoBE on “Working
Together”; two were serious enough to result in the dismissal
of employees whilst the subject of the third report has
received coaching and the business will continue to monitor
his performance.
The Group does not know of it being subject to any regulatory
investigation during 2022 and confirms that it did not have to
pay any fines for material regulatory breaches in this period
(2021: 0).
People
Training and development
Training and development programmes across the Group
during the year prioritised the deployment of the Group’s
Leading With Integrity workshop, together with safety
leadership and lean excellence as well as ongoing technical/
functional training.
72,521 hours of training were delivered in 2022 of which
41,163 were safety related (2021: 89,376 of which 42,278
hours were safety related), giving an average of 19.5 hours of
training per employee (2021: 21.5).
Remuneration
The Group strongly believes in fairly rewarding its employees.
In the UK. Tyman is an accredited Living Wage Employer by
the Living Wage Foundation. In the US, the Group pays above
a living wage as defined by the MIT Living Wage Calculator.
Diversity, equity and inclusion
To support its growth, the Group draws 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 that are consistent with its
principles on diversity and inclusion, in line with local laws and
accepted employment practices.
Visit https://www.tymanplc.com/application/
files/1616/2150/9060/Group_Diversity__Inclusion_Policy.pdf to
access Tyman’s diversity and inclusion policy.
As of 31 December 2022, the Group employed 3,717
people (2021: 4,159), of which 1,483 workers were female
representing 40% of the total headcount (2021: 40%). 36% of
the Group’s headcount is based in the US, 29% in Mexico, with
a further 16% in UK and 9% in Italy. The Board had female
representation of 43% (2021: 43%) and at senior management
level this was 24% with 47 managers (2021: 28%). Temporary
personnel accounted for 3.5% of the Group’s total employees
in 2022 (131), of which 99% are based in Australia, Canada,
Germany, Italy, the UK and US.
The Group’s workforce reduced by 11% during the year in
response to softening market conditions and planned factory
consolidation activity in the UK and Germany. The majority
of this headcount reduction was achieved through natural
attrition with 75 employees receiving redundancy payments in
line with statutory provisions in Mexico, the UK and Germany.
74
Strategic ReportTyman plcAnnual Report and Accounts 2022 Permanent and temporary headcount
FTE by gender (2022-2021)
3,000
2,500
2,000
1,500
1,000
500
0
83
2,151
48
1,435
77
177
63
147
2,404
2,271
1,615
1,536
Female
Male
Female
Male
Female
Male
2022
2021
2020
Permanent FTE
Temporary FTE
2022: 3,717 FTE headcount
Canada 2%
China 3%
Italy 9%
Mexico 29%
UK 16%
USA 36%
Latin America
(Argentina and Brazil) 1%
Other Europe
(France, Germany, Greece,
Portugal, Spain) 2%
Other International
(Australia, India, UAE) 2%
Employee engagement
Three conferences were held during the year for the Group’s
leadership population to update them on Tyman’s strategic
initiatives and business performance. Two were virtual
with over 100 participants and one was face-to-face in the
UK with around 40 leaders on the theme of “accelerating
performance”. This included updates on the Group’s and
divisional growth strategies, lean excellence, sustainability,
cyber security, bringing the Group’s purpose to life and
developing the foundations for leadership competencies.
All locations carry out communications programmes to engage
their employees around important topics. Communication
methods include video conferencing, webinars, video
messages, town hall meetings, team briefings, physical and
electronic noticeboards, training sessions, newsletters, Works
Council meetings, employee engagement focus groups,
leadership tours/Gemba walks, skip level meetings, supervisor
networks and employee recognition events.
The Chief Executive Officer receives regular reports on employee
matters and has skip-level meetings with employees around
the Group whenever possible. She reports on such employee
matters to the Board at every Board meeting. Pamela Bingham,
in her role as Non-executive Director and Board member
responsible for employee engagement, also meets employees
at all levels in the business to understand local challenges and
promote a direct link to the Board. Four virtual and in-person
meetings with cross-functional representatives from sites in Italy,
the UK and the US were held during the year to coincide with site
visits by the Board (2021: eight). Written and verbal reports were
provided by Pamela to the Board for its consideration following
each such meeting. In 2022, the Remuneration Committee Chair,
Paul Withers, also led a skip-level meeting with employees across
the Group to explain Tyman’s remuneration philosophy and how
executive pay supports the Group’s strategy and ambitions. For
more details, see pages 115 to 139.
26% of our employees belong to a recognised trade union
(2021: 30%). In addition to trade union representation, a
number of Works Councils exist, where required by legislation,
together with other employee consultation groups, including
Employee engagement survey
In early 2022, the Group undertook a global all-employee
engagement survey. A pleasing 80% of employees
responded, with results in line with the benchmark scores
for global manufacturing businesses.
Key themes that emerged from the survey included
employees having a sense of pride in their work, which
correlates directly with having a meaningful purpose
at work. Results also indicated that employees have
a favourable work-life balance and our trend for the
burnout signal was 50% below the global trend rate. For
improvement, employees want more feedback and greater
levels of recognition to help them grow in their roles.
Following the survey, focus groups were held at all
locations to discuss the results with employees at all
levels and gather further insights to be incorporated into
detailed action plans. The survey results and action plans
were then cascaded at all-employee meetings to engage
employees in strengthening the culture.
A follow-up pulse survey initiated in North America in
October had an 84% response rate and indicated 95% of
employees said that original employee engagement survey
results were shared with them. Further pulse surveys will
be used to assess progress against these plans, with the
next full employee engagement survey planned for 2024.
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safety committees. The Group continues to have positive
and constructive relationships with its trade unions that
collectively represent its employees. Comprehensive
consultation processes were undertaken during the year
with employees affected by closure plans for the Group’s
manufacturing facility in Germany and the consolidation of
the Access 360 sites in the UK. Tyman offered support for all
affected employees at all stages of the processes, including
holding one-to-one meetings with staff to help with their
next steps, alternative roles, relocation support and the
reimbursement of additional travel costs. For those who
were made redundant, financial severance payments and
outplacement support were offered.
Our communities
The Group has adopted three core themes for its community
programmes, namely: (i) transforming careers through
STEM programmes for disadvantaged/under-represented
communities; (ii) transforming living and work spaces for
disadvantaged groups; and (iii) transforming our impact on
the natural world through conservation and climate projects.
Each division has developed programmes to focus on these
priorities and will leverage partnerships with community
groups / non-profit organisations, customers and greater
levels of employee volunteering to reduce inequalities in
our society. These engagements will provide an opportunity
for the Group’s employees to bring its purpose and Code
of Business Ethics to life, benefitting both the business
(through employee retention, attraction and development)
and the communities it operates in. An example of this is the
partnership between our UK seals business and University
Technical College in South Durham to support and develop
the next generation of engineers (see opposite).
During 2022, 50 local fund-raising activities were undertaken
across the Group. The Group’s fund-raising activities delivered
£46,463 of community investment in 2022 (2021: £80,641). For
example, in Budrio, 80 employees volunteered in their own
time to pack food parcels for people impacted by the invasion
of Ukraine.
Community investment 2022: £46,453
Company cash donation to charity: £36,483
Employee cash donation to charity: £951
Value of staff time volunteered in company hours: £6,663
In-kind contributions to local communities: £2,356
76
Developing the next
generation of engineers
Tyman’s seals business in Newton Aycliffe in the UK has
partnered with the local University Technical College
(UTC) in South Durham to support and develop the
next generation of engineers. The team, aptly named
Thread Solutions, won the UTC business award for
the Best Industry Project for their work on reducing
downtime in our weaving department by designing and
installing a pneumatic device to successfully prevent
pile stoppages.
“Working with Tyman as one of our industry
partners has been a real privilege. Being
able to work with an organisation who has
provided a real-life industry problem for
our technical students to be able to solve
has been key to the students’ success. Our
students have done an exceptional job of
understanding the brief, but then having the
support of the team at Newton Aycliffe to
help them think through the problem and
offer feedback and advice has ensured that
they have designed and built a prototype of
quality and purpose. We couldn’t be prouder
of the partnership and the connection that
we have made with the team at Tyman and
this is an example of a true collaboration that
has had impact for not only our students but
for one of our partners.”
Tom Dower, Principal
Strategic ReportTyman plcAnnual Report and Accounts 2022 Sustainable Solutions
Sustainable products in use
Buildings are significant contributors to global carbon dioxide emissions, both during the construction phase and in operation,
and are estimated to account for nearly 40% of global emissions, higher than agriculture or transport. Therefore, as countries
around the world pursue net-zero goals by 2050 or sooner, reducing emissions generated during the construction of a building
and/or its operation will become more important. As many of the buildings likely to be in use in 2050 will have already been
built, saving energy in existing buildings is a major area of focus and a growth opportunity for the Group. This could be via
energy saving products (see table below for examples of these) or more generally via components supplied for replacement
windows and doors being part of the solution to a fabric-first approach to building insulation.
The Group started measuring revenues from products that positively impact one or more of the UN SDGs in use in 2020.
Sustainable product revenues remained at 21% of total revenues (2021: 21%), amounting to £147 million.
Category (SDG)
Examples
Demand drivers
2022
2021
2020
• Windows and door seals
• Building codes (e.g., UK
10.7%
11.7%
10.5%
% Group revenues
Energy saving
•
•
Thermally broken roof hatches
Tilt ‘n’ turn micro-ventilation
products reduce energy losses
in winter and heat gain in
summer
Building Regulations and
Future Homes Standard1)
•
Sustainability standards
(e.g., LEED)
• Government green stimulus
packages (e.g., Italy)
• High security locks and
• Reducing community crime
3.8%
4.4%
3.8%
Security solutions
smart alarm systems proven
to reduce break-ins (e.g.
community/social housing)
•
Fall prevention (window
restrictors, railing system and
ladder access protection)
• Health and safety
• Building codes
2.4%
2.3%
2.1%
• Riser doors (fire-rated/
• Health and safety
2.7%
2.0%
2.0%
certified)
• Building codes/fire safety
•
Intumescent seals
regulations
• Changing climate (increasing
fire risk)
• Products designed to meet
• Ageing population
0.6%
0.6%
0.6%
the needs of disadvantaged/
vulnerable groups such as
the elderly and those with
disabilities
•
Severe weather protection
products (e.g. strengthened
window hardware and
hurricane resistant roof
hatches)
• Water-tight sidewalk doors
protect against flooding
• Care homes/hospital
requirements
• Building codes in hurricane
0.4%
0.4%
0.2%
vulnerable areas
• Changing climate/resilience
(e.g., flooding)
21%
21%
19%
Safety products
Fire safety products
Inclusive living
Climate hazard
protection
TOTAL
1 From 2023 changes to Parts F, L and O of the UK Building Regulations standards aim to reduce CO2 emissions by 30%, requiring improved
ventilation and the need to combat heat gain in new housing. From 2025, the UK’s Future Homes Standard will require reductions in CO2
emissions of 75-80%. In Europe, changes to the Energy Performance of Buildings Directive and the Fit for 55 Package, which aims for a 55%
reduction in emissions by 2030, should also support continued growth of energy saving and ventilation products. Growing demand for double
and triple glazed units is expected to increase sales of seals and hardware.
7777
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Sustainability performance continued
The Group continues to work with trade associations such
as the UK’s Surface Engineering Association (SEA) and the
European Federation of Associations of Locks & Builders
Hardware Manufacturers (ARGE) to find alternatives to
hazardous substances such as chromium VI in electroplated
products sourced from Asia and lead used in brass alloys for
locks and other hardware components.
Product integrity
Each division is responsible for negotiating the terms and
conditions of trade with its suppliers. Tyman requires all of
its suppliers to adhere to the Group’s Code of Business Ethics
or a comparable set of principles of business conduct and
reserves the right to terminate a business relationship and
take appropriate action against any supplier that breaches
any part of the Code.
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.
The Group’s businesses are encouraged to gain and maintain
certification to specific standards required by the markets
they serve, including quality, weather resistance, security and
fire protection.
Extensive product and safety-related testing is undertaken
by the Group’s in-house test facilities in the UK, US, Italy and
Australia, and externally through accredited partners. Tyman
UK and Ireland for example, has its own UKAS accredited test
facility in Wolverhampton to put its products and complete
window/door installations through a variety of tests, including
product strength, weather tightness and other performance
characteristics, for both the Group’s products and those
of its customers. Many of the Group’s products have been
tested to other relevant BS/EN standards in fire protection
and acoustics and also meet UL fire standards in the relevant
markets. Steel riser doors manufactured under the Access 360
brand are independently CERTIFIRE rated, making it the only
access panel manufacturer in the UK to offer independent
bi-directional fire testing accreditation from Warrington Fire.
Circular economy
Quantifying Tyman’s value chain carbon footprint has shown
the Group how important it will be to reduce emissions
from purchased raw materials. Working on reducing these
emissions now prepares the Group to respond to customer
demand for lower carbon products in the future and helps to
differentiate our offer in the marketplace.
75% of the Group’s value chain carbon footprint is attributable
to raw materials purchasing, with aluminium, steel and
polymers accounting for the majority of these raw materials,
and work continues to address these impacts. Reusing
post-consumer waste and specifying high levels of recycled
content offer good opportunities to reduce these impacts. For
example, the Group’s Cannon Falls extrusion facility uses over
900 tonnes of post-consumer recycled PVC in its products
and the Giesse hardware business in Italy successfully trialled
the use of extruded aluminium with 70%+ recycled content
compared to the current 23%, saving an estimated 2,600
TCO2e in 2022. Recycled aluminium has the benefit of using
significantly less energy than virgin aluminium. Work will
continue to explore other circular economy opportunities as
the Group progresses its SBT plans (page 22 and pages 62
to 63).
Packaging
The Group continues to work towards its goal of 100%
sustainable packaging by 2026 by optimising the amount of
packaging used, moving to more sustainable/renewable/fully
recyclable materials and avoiding single-use plastic packaging
where possible. Where single-use plastic is unavoidable the
Group will look to source plastics with the highest levels of
recycled content, which can be recycled or composted via
arrangements that are widely available.
ERA’s new smart lock and hardware supplied to UK retailers
in 2023 now include plastic-free packaging and de-inked
cardboard cartons, making them easier to recycle once
discarded by the consumer. Finding solutions to minimise
transit packaging to window and door fabricators has been
another example of applying the Tyman touch for customers
seeking our expertise and in 2023 the Group will work with at
least two major North American customers to develop new
returnable packaging solutions.
Conflict minerals, human rights
and hazardous materials
As Tyman is not a US-listed company, §1502 of the U.S. Dodd
Frank Act on conflict minerals does not apply to it directly.
However, the Group abhors the human rights abuses that
are enabled by the sale of raw materials from controversial
sources and has taken steps to help it generate the
information that its customers need to disclose under §1502
of the U.S. Dodd Frank Act.
Tyman adheres to policies that support human rights principles
and, in keeping with its approach to human rights, as set out
in its Code of Business Ethics, it conducts due diligence on its
suppliers to ensure their alignment in this respect.
78
Strategic ReportTyman plcAnnual Report and Accounts 2022 7979
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc 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 interests and wellbeing of our people;
the need to act fairly as between members of the
Company;
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 building a
sustainable and successful business.
Some examples of direct engagement by the Board include
the Workforce Engagement NED’s skip-level meetings with
employees and their representatives; and meetings or
calls with customers, suppliers or shareholders. However,
engagement may also be indirect, such as through Board
reports, employee surveys and feedback from investors and
analysts. All such engagement has provided invaluable input
to the Board’s discussions and decision-making.
Who?
Why?
How?
Stakeholder
group
Why it is important
to engage
How management and/or
Directors engaged
For the business to achieve long-term
success, continued access to capital is vital.
As a company with shares on the Main
Market of the London Stock Exchange's
premium list, we must provide fair, balanced
and understandable information about the
business to enable informed investment
decisions to be made.
• Results presentations and post-results
engagement with institutional shareholders
•
Investor roadshows, site visits, face-to-face
meetings and conference calls addressing investor
and analyst enquiries
• Annual Report and Accounts
• Annual General Meeting
• Regulatory announcements
• Corporate website, including dedicated
investor section
The Group’s suppliers are integral to the
quality of our products and the reliability of
their delivery. Engaging with our supply chain
ensures the security of supply and speed
to market. We seek to curate high-quality
suppliers that help us deliver market-leading
products that meet our customer expectations
and requirements and are consistent with
our ethical, sustainable and responsible
procurement standards and policies.
• Meetings with key suppliers
•
The results of supplier audits are reported to the
The Group’s 2021 Modern Slavery Statement
•
•
•
Supplier audits and inspections
Through our Tyman Sourcing Asia organisation
based in China
Engagement on our Code of Business Ethics
and topics such as anti-bribery and corruption,
anti-modern slavery and fair competition
Investors
Suppliers
80
What?
Outcomes and actions
What were the key topics of engagement
What was the impact of the
and what feedback and input did the
engagement, including any
Board/management obtain?
actions taken?
Key topics discussed included:
• Refinement of investor communications based on prior
feedback to best address investors' key questions and concerns
• Use of case studies to provide further insight into aspects of the
business of key interest to investors
•
Sustainability metrics feature as measures in the Group’s
LTIP and have been introduced into the Group’s US private
placement notes and revolving credit facility as performance
targets linked to the loan margin (when they were refinanced)
•
•
due diligence
Support for the investment in automation of supplier
•
Supply chain challenges and the Group's response
• Ability of Tyman to pass on cost inflation to
• Ability of the Group to react to potential changes
•
The Group’s strategy and sustainability roadmap
• Progress against the Group's medium-term margin
customers
in demand
targets
Feedback and input were obtained from the Group’s
corporate brokers and financial PR advisers.
Board in connection with its consideration of the
Group’s modern slavery policy and statement
•
The CEO regularly reports to the Board on material
supplier matters and on the Group’s progress in
procuring sustainably
• Development of approaches to help our supply chain
become more sustainable, including the substitution
of hazardous substances with less harmful finishes
Strategic ReportTyman plcAnnual Report and Accounts 2022 Who?
Why?
How?
Stakeholder
Why it is important
group
to engage
How management and/or
Directors engaged
What?
Outcomes and actions
What were the key topics of engagement
and what feedback and input did the
Board/management obtain?
What was the impact of the
engagement, including any
actions taken?
Investors
For the business to achieve long-term
• Results presentations and post-results
Key topics discussed included:
• Refinement of investor communications based on prior
success, continued access to capital is vital.
engagement with institutional shareholders
As a company with shares on the Main
Market of the London Stock Exchange's
premium list, we must provide fair, balanced
and understandable information about the
business to enable informed investment
decisions to be made.
•
Investor roadshows, site visits, face-to-face
meetings and conference calls addressing investor
and analyst enquiries
• Annual Report and Accounts
• Annual General Meeting
• Regulatory announcements
• Corporate website, including dedicated
investor section
Suppliers
The Group’s suppliers are integral to the
• Meetings with key suppliers
quality of our products and the reliability of
their delivery. Engaging with our supply chain
ensures the security of supply and speed
to market. We seek to curate high-quality
•
•
suppliers that help us deliver market-leading
products that meet our customer expectations
and requirements and are consistent with
our ethical, sustainable and responsible
procurement standards and policies.
Supplier audits and inspections
Through our Tyman Sourcing Asia organisation
based in China
•
Engagement on our Code of Business Ethics
and topics such as anti-bribery and corruption,
anti-modern slavery and fair competition
feedback to best address investors' key questions and concerns
• Use of case studies to provide further insight into aspects of the
business of key interest to investors
•
•
•
Sustainability metrics feature as measures in the Group’s
LTIP and have been introduced into the Group’s US private
placement notes and revolving credit facility as performance
targets linked to the loan margin (when they were refinanced)
The Group’s 2021 Modern Slavery Statement
Support for the investment in automation of supplier
due diligence
•
Supply chain challenges and the Group's response
• Ability of Tyman to pass on cost inflation to
customers
• Ability of the Group to react to potential changes
in demand
•
The Group’s strategy and sustainability roadmap
• Progress against the Group's medium-term margin
targets
Feedback and input were obtained from the Group’s
corporate brokers and financial PR advisers.
•
•
The results of supplier audits are reported to the
Board in connection with its consideration of the
Group’s modern slavery policy and statement
The CEO regularly reports to the Board on material
supplier matters and on the Group’s progress in
procuring sustainably
• Development of approaches to help our supply chain
become more sustainable, including the substitution
of hazardous substances with less harmful finishes
8181
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Section 172 statement continued
Who?
Why?
How?
Stakeholder
group
Why it is important
to engage
How management and/or
Directors engaged
Employees
Our people are critical to our long-term and
sustainable success. We recognise that an
engaged workforce is also a productive one.
Across our global network, we seek to foster
diverse and inclusive workplaces where every
employee feels psychologically safe to achieve
their full potential and job satisfaction. This
helps to ensure that we can retain and develop
the best talent.
Customers and
end-users
Society
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.
We conduct and build our business responsibly
and sustainably, which enables us to respond
to stakeholder expectations and manage a
range of emerging risks. We continually seek
to contribute positively to the communities and
environments in which we work.
• All-employee engagement survey
• Health and safety
•
•
•
Skip-level meetings held by the CEO, Chair
of Remuneration Committee, the Workforce
Engagement Director, Group Health Safety and
Sustainability Director and divisional management
Training and development (e.g., Safety Leadership
Programme; One Tyman; Leading with Integrity)
Tyman Group leadership conference and virtual
conferences with the Group’s leaders
• All-employee communications from the Chief
Executive Officer
•
SpeakUp hotline
• Meetings with major customers, including face-to-
• Product availability and ability to meet required
Further investment in capacity where appropriate
face sustainability workshops with several of the
Group’s largest US customers
• Participation in industry forums and events
• Reports on new product development
• CEO and division leadership reports on material
customer updates
• Membership of trade associations and
industry bodies
• Meetings with major organisations and employers
Ukraine
• 50 local fund-raising activities were undertaken during 2022
in the local community
• Reports from the Director of Health & Safety
and Sustainability
What?
Outcomes and actions
What were the key topics of engagement
What was the impact of the
and what feedback and input did the
engagement, including any
Board/management obtain?
actions taken?
• Company strategy and financial performance
•
Sustainability
• Cost-of-living pressures
•
Executive remuneration
•
The results of the all-employee survey were reported to the
Board and opportunities for improvement were discussed in
focus groups, with follow-up actions taken.
•
Feedback from the employee representatives on executive
remuneration was discussed with the Remuneration Committee
and will be taken into account in future policy decisions.
service levels given supply chain challenges
Investment in innovation and product development, including
•
Innovation and new product development, including
sustainable solutions (see pages 77 to 78 for more information)
sustainable product lines and packaging
•
Increased levels of customer communication and interaction on
• Price changes to adjust for industry-wide cost
both supply chain challenges and inflation/pricing
inflation
•
•
• Climate change
• Approving Tyman’s near-term carbon emissions targets for
• Humanitarian crises, such as Russia’s invasion of
submission to the SBTi
•
Support for local issues and charities
• Partnership between our UK seals business and University
• Apprenticeships are offered in certain locations
Technical College in South Durham to support and develop the
next generation of engineers
•
Employee-volunteering activities such as packing food parcels
for people impacted by the Russian invasion of Ukraine
82
Strategic ReportTyman plcAnnual Report and Accounts 2022 Who?
Why?
How?
Stakeholder
Why it is important
group
to engage
How management and/or
Directors engaged
What?
Outcomes and actions
What were the key topics of engagement
and what feedback and input did the
Board/management obtain?
What was the impact of the
engagement, including any
actions taken?
Employees
Our people are critical to our long-term and
• All-employee engagement survey
• Health and safety
•
Skip-level meetings held by the CEO, Chair
• Company strategy and financial performance
•
Sustainability
• Cost-of-living pressures
•
Executive remuneration
sustainable success. We recognise that an
engaged workforce is also a productive one.
Across our global network, we seek to foster
diverse and inclusive workplaces where every
employee feels psychologically safe to achieve
their full potential and job satisfaction. This
helps to ensure that we can retain and develop
the best talent.
of Remuneration Committee, the Workforce
Engagement Director, Group Health Safety and
Sustainability Director and divisional management
•
Training and development (e.g., Safety Leadership
Programme; One Tyman; Leading with Integrity)
•
Tyman Group leadership conference and virtual
conferences with the Group’s leaders
• All-employee communications from the Chief
Executive Officer
•
SpeakUp hotline
Customers and
We want to continually deliver the best relevant
• Meetings with major customers, including face-to-
end-users
products to our customers on time every time.
face sustainability workshops with several of the
Engaging with our customers enables us to
Group’s largest US customers
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.
• Participation in industry forums and events
• Reports on new product development
• CEO and division leadership reports on material
customer updates
• Product availability and ability to meet required
service levels given supply chain challenges
•
Innovation and new product development, including
sustainable product lines and packaging
• Price changes to adjust for industry-wide cost
inflation
•
•
•
•
•
The results of the all-employee survey were reported to the
Board and opportunities for improvement were discussed in
focus groups, with follow-up actions taken.
Feedback from the employee representatives on executive
remuneration was discussed with the Remuneration Committee
and will be taken into account in future policy decisions.
Further investment in capacity where appropriate
Investment in innovation and product development, including
sustainable solutions (see pages 77 to 78 for more information)
Increased levels of customer communication and interaction on
both supply chain challenges and inflation/pricing
Society
We conduct and build our business responsibly
• Membership of trade associations and
• Climate change
• Approving Tyman’s near-term carbon emissions targets for
and sustainably, which enables us to respond
industry bodies
• Humanitarian crises, such as Russia’s invasion of
submission to the SBTi
• Meetings with major organisations and employers
Ukraine
• 50 local fund-raising activities were undertaken during 2022
•
Support for local issues and charities
• Partnership between our UK seals business and University
• Apprenticeships are offered in certain locations
Technical College in South Durham to support and develop the
next generation of engineers
•
Employee-volunteering activities such as packing food parcels
for people impacted by the Russian invasion of Ukraine
to stakeholder expectations and manage a
range of emerging risks. We continually seek
to contribute positively to the communities and
environments in which we work.
in the local community
• Reports from the Director of Health & Safety
and Sustainability
8383
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc 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:
• Although demand has weakened in the second half
of 2022 as a result of the challenging macroeconomic
conditions, the Group has achieved share gains in core
markets, and has successfully implemented pricing
actions to recover cost inflation. The Group has a
demonstrated ability to flex the cost base in response to
changes in demand.
• Operations are highly cash generative and drive a high
operating cash conversion ratio. Cash conversion in 2022
is lower than average at 63% due to the investment in
working capital and increased capital expenditure, with a
typical average of c.90%.
•
•
The Group has significant headroom in borrowing
facilities and debt covenants at 31 December 2022, with
liquidity headroom of £210.4 million and leverage of 1.1x.
A significant deleveraging has been achieved over the last
three years from 1.7x at the end of 2019.
The Group successfully refinanced both the USPP and
RCF facilities during the year, with total committed debt
facilities now c.£310 million. In February 2022,
$75 million of new US Private Placement notes were
issued, bringing the total to $120 million. $40 million of
these notes have a term of seven years, and $35 million
have a term of 10 years. The remaining $45 million is due
for repayment in November 2024. In December 2022,
the RCF facility was refinanced, giving a total committed
facility of £210 million as well as potential access to an
additional accordion facility of £100 million. This facility
matures in December 2026, with an option to extend for
a further year. This gives an average debt facility life of
4.5 years, covering the majority of the assessment period.
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 17 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.
• Our sustainability roadmap positions the Group well
to derive benefits from the transition to a low carbon
economy.
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.
•
•
84
• Co-development and customisation services create long-
term partnerships.
• Rationalisation of footprint and other self-help activities
are driving margin expansion.
•
The growth strategy is focussed on gaining market
share through new product introductions and channel
expansion initiatives.
• Maintaining focus on pricing discipline to protect margins
from the effects of adverse exchange rate movements,
increasing tariffs and material input price inflation.
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 22 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,
market conditions, and raw material costs and supply chain
disruption. See further details of the Group’s principal risks on
pages 42 to 49.
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 2025.
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 42 to 49 of the Annual Report.
The Directors have determined that five years is an
appropriate timeframe over which to provide a viability
statement. Although the Board’s strategic planning period is
three years, given the position of the business, the viability
of the Group can reasonably be assessed for a further two
years beyond this. The Directors consider that demand in the
Strategic ReportTyman plcAnnual Report and Accounts 2022 Group’s business is ultimately driven by consumer confidence
and discretionary spending patterns which are difficult to
project accurately beyond a five-year time horizon.
In order to assess the Group’s viability over this period,
the strategic plan has been extrapolated for a further two
years at a nominal growth rate of 3%. The key assumptions
underpinning the assessment include:
•
average market growth forecasts in line with local
consensus;
• no future loss of significant customers;
•
•
forecasts of market share growth, selling price increases
and the impact of new product development;
forecasts of the benefits from self-help and continuous
improvement activities;
Severe but plausible downside scenarios
•
the RCF which is due for repayment in December 2026
is either extended for a further year by exercising this
option, or successfully refinanced at the existing facility
limit of £210 million; and
• no future acquisitions or disposals.
These financials have then been flexed by overlaying the
estimated financial impact of crystallisation of certain of
the Group’s principal risks that are considered to have
the potential to threaten viability in ‘severe but plausible’
downside scenarios. The risks modelled were a downturn in
market conditions, raw material and supply chain failure, and
business interruption.
The downside scenarios applied to the strategic plan are
summarised below.
The ‘severe but plausible’ scenario models the impact of a significant short-term contraction in revenue on the Group.
Strategic plan flexed for the
following scenarios
Link to principal risks
and uncertainties
Level of
severity tested
Downturn in market conditions
Market conditions
Raw material cost increases and
supply chain disruption
Raw material costs and
supply chain failures
Business interruption resulting
from a significant event such as
a pandemic, IT interruption, or
loss of an operating location.
Business interruption
The scenario modelled is
a 10% fall in revenue from
the base case in each of
the next five years.
The scenario modelled is a
10% reduction in revenue
from the base case in
each of the next five years
resulting from supply
chain failure, combined
with further cost inflation
of 3% that is not fully
passed on to customers.
In an environment where
inflation persists, it is likely
there would be further
interest rate rises and
therefore an increase in
interest rates in each year
of 100bps from the base
case is also modelled.
The scenario modelled is a
15% reduction in revenue
from the base case in year
one, representing lost sales
during the interruption
event, a 5% reduction
in each of the following
four years representing a
longer-term effect, and a
one-off exceptional cost of
£10 million representing
costs of resolving the issue.
Conclusion
Tyman, after undertaking
reasonable mitigating
actions, should be able to
comfortably withstand the
impact of this severe but
plausible scenario.
Tyman, after undertaking
reasonable mitigating
actions, should be able to
comfortably withstand the
impact of this severe but
plausible scenario.
Tyman, after undertaking
reasonable mitigating
actions, should be able
comfortably to withstand
the impact of this severe
but plausible scenario.
8585
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Going concern and viability continued
Reverse stress test scenario
The ‘reverse stress test’ scenario models a scenario that would represent the point at which the Group’s future viability becomes
less certain. In effect, this would be a breach of covenants.
Strategic plan flexed for the
following scenarios
Link to principal risks
and uncertainties
Level of
severity tested
This models the impact of a
larger short-term contraction in
revenue which is sustained for a
period of time, causing a breach
of covenants.
Business interruption
Market conditions
Raw material costs and
supply chain failures
A reduction in revenue
from the base case of 37%
in 2023 and then a 40%
reduction from 2024 to
2027 was modelled.
Conclusion
This sustained level of
performance deterioration
is considered highly
implausible. This is much
more severe than what
was experienced through
the height of the COVID-19
pandemic in 2020 and the
global financial crisis in
2007-2009.
The flexed models take account of the natural reduction in variable costs and availability and likely effectiveness of mitigating
actions available to the Group, including the flexing of working capital, capital expenditure, dividend payments and discretionary
spend. The models do not include significant structural actions, such as closing or mothballing facilities or divesting assets,
which would be undertaken in the event necessary. 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 2027.
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).
86
Strategic ReportTyman plcAnnual Report and Accounts 2022 Non-financial information statement
This section of the Strategic Report constitutes Tyman’s non-financial information statement and is produced to comply with
Sections 414CA and 414CB of the Companies Act 2006. The table below summarises the applicable policy or code corresponding
to each reporting requirement and where this information is located within the Annual Report and Accounts.
Reporting requirements
Relevant policy/code
Location within Annual Report
Environmental matters
•
Environmental Policy
•
Sustainable Operations performance on
pages 70 to 73
Employees
• Code of Business Ethics:
•
Sustainable Culture on pages 74 to 76
Integrity in Action
• Health & Safety Policy
• Diversity & Inclusion Policy
• Anti-Bribery and Corruption Policy
•
•
•
Fair Competition Policy
Trade Controls Policy
Speak Up Policy
• Workforce Engagement
Human rights
• Code of Business Ethics: Integrity
• Business ethics and compliance on
in Action
page 74
• Diversity & Inclusion Policy
• Diversity and inclusion on page 74
Anti-corruption and anti-
bribery matters
• Code of Business Ethics: Integrity
• Business ethics and compliance on
in Action
page 74
• Anti-Bribery and Corruption Policy
Social matters
• Code of Business Ethics: Integrity
in Action
•
Section 172 statement on pages
80 to 83
•
Stakeholder engagement
• Community investment on page 76
Business model
Principal risks
Non-financial KPIs
Peter Ho
General Counsel & Company Secretary
2 March 2023
• Business model on pages 14 to 15
• Risk management on pages 42 to 44
• Group principal risks on pages 45 to 49
•
Lost time incidents and greenhouse gas
emissions KPIs on page 25
8787
Annual Report and Accounts 2022Tyman plcStrategic ReportAnnual Report and Accounts 2022Tyman plc Board of Directors
Nicky Hartery
Non-executive Chair
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Pamela Bingham
Non-executive Director
Helen Clatworthy
David Randich
Paul Withers
Non-executive Director
Non-executive Director
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 University of
Galway. He has extensive
operational and general
management experience
gained in international
manufacturing companies,
which he later leveraged
to set up 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 10 years.
External appointments
Nicky is Chair of the
Musgrave Group, a Non-
executive Director of Finning
International Inc and Chair
of Horse Racing Ireland.
88
A
N
R
A
N
R
A
N
R
A
N
R
Appointment to the Board
Jo Hallas joined Tyman
on 1 March 2019 and was
appointed Chief Executive
Officer with effect from 1
April 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 10 years
with Procter and Gamble in
Germany, the USA and Asia.
Jo is a former Non-executive
Director of Norcros plc.
External appointments
Jo is a Non-executive Director
of Smith & Nephew plc.
Appointment to the Board
Jason Ashton joined Tyman
on 29 April 2019 and was
appointed Chief Financial
Officer on 9 May 2019.
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 €2.6
billion acquisition by Nomad
Foods and subsequent €0.7
billion acquisition of the
Findus Group. Jason has
also held senior finance and
commercial positions with
Mondalez (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.
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 building
products, engineering, mining,
renewable energy, and oil and
gas sectors.
Relevant past experience
Pamela was most recently
Managing Director,
Infrastructure Products Group,
Europe & Australia, at CRH and,
before this, she was 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 an
in-house counsel for English
Welsh and Scottish Railway Ltd
and for the Yorkshire Building
Society.
External appointments
Pamela is Chief Executive of
Glen Dimplex’s Heating and
Ventilation Division.
Appointment to the Board
Appointment to the Board
Appointment to the Board
Helen Clatworthy was
David Randich was
Paul Withers was
appointed to the Board in
appointed to the Board as a
appointed to the Board as
January 2017 as a Non-
executive Director. She
Non-executive Director on
a Non-executive Director
15 December 2021 and is a
in February 2020 and as
was appointed Chair of the
member of the Nominations,
Chair of the Remuneration
Audit and Risk Committee in
Audit and Risk, and the
Committee and Senior
May 2017.
Remuneration Committees.
Independent Director from
Skills and qualifications
Skills and qualifications
April 2020.
Helen is a Fellow of the
Dave brings extensive
Skills and qualifications
Chartered Institute of
experience of the North
Paul qualified as a
Management Accountants
American building products
Mechanical Engineer, is a
and has significant
market to the Tyman Board.
Sloan Fellow of the London
operational and corporate
experience, particularly
in cost management,
acquisition integration,
information technology and
He holds a BS in Industrial
Management from Purdue
University and an MBA from
Mercer University.
Business School, and holds
an MA in Mathematics from
Cambridge University and a
DPhil in Mathematics from
Oxford University. He has
change management.
Relevant past experience
extensive experience in
At Fortune Brands, Dave
international manufacturing
was President of the
Masterbrand Cabinets
businesses and, in particular,
strong knowledge of
business for seven years and
US markets, both as an
President of the Therma-
Executive and Non-executive
Tru Doors business for
Director.
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.
five years. Prior to Fortune
Brands, Dave held an
international career with
Armstrong World Industries,
with roles in China, the UK,
Germany and the US. Dave
was also a Non-executive
Director of Springs Window
Fashions.
External appointments
Dave lectures at Purdue
University’s Krannert School
of Management.
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, Devro plc and Keller
Group plc. He held the roles
of Senior Independent
Director and Chair of the
Remuneration Committee in
each of these.
External appointments
None.
Tyman plcAnnual Report and Accounts 2022Governance
Nicky Hartery
Non-executive Chair
N
R
Jo Hallas
Jason Ashton
Pamela Bingham
Chief Executive Officer
Chief Financial Officer
Non-executive Director
Helen Clatworthy
Non-executive Director
David Randich
Non-executive Director
Paul Withers
Non-executive Director
A
N
R
A
N
R
A
N
R
A
N
R
Appointment to the Board
Appointment to the Board
Appointment to the Board
Appointment to the Board
Nicky Hartery was appointed
Jo Hallas joined Tyman
Jason Ashton joined Tyman
Pamela Bingham was
to the Board as a Non-
on 1 March 2019 and was
on 29 April 2019 and was
appointed to the Board
executive Director on 1
appointed Chief Executive
appointed Chief Financial
in January 2018 as a Non-
October 2020 and as Chair
Officer with effect from 1
Officer on 9 May 2019.
executive Director. She is
of the Board and Chair of the
April 2019.
Nominations Committee on
1 December 2020.
Skills and qualifications
Jason is a Chartered
Jo is a Chartered Engineer
Accountant and has a
Skills and qualifications
the Non-executive Director
responsible for employee
engagement across the Group.
Skills and qualifications
with an engineering degree
degree in Economics
Skills and qualifications
Nicky is a Chartered
from the University of
from the University of
Pamela has a law degree from
Engineer with an electrical
Cambridge and an MBA from
Manchester. His career in
the University of Edinburgh
engineering degree from
INSEAD. She has extensive
international manufacturing-
and holds an MBA from
University College Cork and
international management
based businesses includes
Warwick Business School.
an MBA from University of
experience focused on
significant experience of
She practised as a solicitor
Galway. He has extensive
business transformation
commercial finance, M&A,
before moving into general
operational and general
through organic and
investor relations and tax
management. Pamela has
management experience
acquisitive growth in
and treasury functions.
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 building
products, engineering, mining,
renewable energy, and oil and
gained in international
the global industrial and
manufacturing companies,
consumer sectors, achieved
which he later leveraged
through establishing and
to set up a Lean Six Sigma
leading strategic clarity and
business transformation
execution.
Relevant past experience
Jason was formerly Interim
Group Chief Financial Officer
of Nomad Foods Limited,
the UK-headquartered,
consultancy, Prodigium. He
has strong experience of
North American markets,
both as an Executive and
Non-executive Director.
Relevant past experience
NYSE-listed frozen foods
Jo was previously Business
group. Prior to this, he was
Group Director for
Spectris plc, where she
had responsibility for a
Group Finance Director for
the Iglo Group, leading the
gas sectors.
business through its €2.6
Relevant past experience
Relevant past experience
portfolio of global industrial
billion acquisition by Nomad
Pamela was most recently
From 2012 to 2019, Nicky
technology businesses. Prior
Foods and subsequent €0.7
Managing Director,
was the Chair of CRH plc,
to this, Jo led the Invensys
billion acquisition of the
Infrastructure Products Group,
the global building materials
heating controls business.
Findus Group. Jason has
Europe & Australia, at CRH and,
FTSE 100 company, and has
Jo has also held senior
also held senior finance and
before this, she was Managing
also been a Non-executive
commercial roles with the
commercial positions with
Director of Weir Minerals
Director of Eircom Ltd. Nicky
Bosch Group in the UK and
Mondalez (Kraft), Plum Baby
Europe. She previously held
spent his executive career at
Germany, and 10 years
and Cadbury plc, based
senior management roles with
General Electric, Verbatim /
with Procter and Gamble in
variously in the UK, Belgium,
Rotork plc, David Brown Group
Eastman Kodak and Dell Inc,
Germany, the USA and Asia.
Poland, Russia and Turkey.
Ltd and CSE-Servelec Ltd. Her
Jo is a former Non-executive
Director of Norcros plc.
External appointments
Jo is a Non-executive Director
of Smith & Nephew plc.
His early career included
early career was spent as an
roles with Diageo plc, Tetley
in-house counsel for English
Group and KPMG.
Welsh and Scottish Railway Ltd
and for the Yorkshire Building
External appointments
None.
Society.
including being based in the
US for 10 years.
External appointments
Nicky is Chair of the
Musgrave Group, a Non-
executive Director of Finning
International Inc and Chair
of Horse Racing Ireland.
External appointments
Pamela is Chief Executive of
Glen Dimplex’s Heating and
Ventilation Division.
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.
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.
Appointment to the Board
David Randich was
appointed to the Board as a
Non-executive Director on
15 December 2021 and is a
member of the Nominations,
Audit and Risk, and the
Remuneration Committees.
Skills and qualifications
Dave brings extensive
experience of the North
American building products
market to the Tyman Board.
He holds a BS in Industrial
Management from Purdue
University and an MBA from
Mercer University.
Relevant past experience
At Fortune Brands, Dave
was President of the
Masterbrand Cabinets
business for seven years and
President of the Therma-
Tru Doors business for
five years. Prior to Fortune
Brands, Dave held an
international career with
Armstrong World Industries,
with roles in China, the UK,
Germany and the US. Dave
was also a Non-executive
Director of Springs Window
Fashions.
External appointments
Dave lectures at Purdue
University’s Krannert School
of Management.
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
Paul qualified as a
Mechanical Engineer, is a
Sloan Fellow of the London
Business School, and holds
an MA in Mathematics from
Cambridge University and 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, Devro plc and Keller
Group plc. He held the roles
of Senior Independent
Director and Chair of the
Remuneration Committee in
each of these.
External appointments
None.
Committee membership key
A Audit and Risk Committee
N Nominations Committee
R Remuneration Committee
Committee Chair
8989
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance
Directors' report
Principal activities
Annual General Meeting
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 197 to 200.
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 (LSE: TYMN). 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
2022 was 196,762,059 ordinary shares of 5.00 pence each, of
which 478,714 shares are held in Treasury.
Further information on the Company’s share capital may be
found in note 22 to the Group financial statements.
Directors
The names and biographical details of the Directors are on
pages 88 and 89 of this report. Further information regarding
the Directors who served during the year to 31 December
2022 may be found on pages 125 to 139 in the Remuneration
report.
Appointment and removal of Directors
Directors may be appointed by ordinary resolution of the
Company or by the Board. In addition to any powers of
removal conferred by the Companies Act 2006, the Directors,
or any committee authorised by the Directors, may terminate
the appointment of any Executive Director.
Each Director of the Board will stand for re-election at the
AGM. Accordingly, Nicky Hartery, Jo Hallas, Jason Ashton,
Paul Withers, Pamela Bingham and David Randich will offer
themselves for re-election at the 2023 AGM.
Qualifying indemnity provisions
The Company does not have a qualifying third-party indemnity
provision or a qualifying pension scheme indemnity provision
in place.
Directors’ and Officers’ insurance
Details of the Group’s Directors’ and Officers’ insurance
arrangements may be found on page 103.
At the Company’s 2022 AGM, the Directors were authorised to
allot shares equal to, approximately, one-third of the issued
share capital of the Company as at 1 April 2022, 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 at 1 April 2022, without first offering these shares to
existing shareholders in 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
1 April 2022.
At the 2022 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 1 April 2022. 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, subject
to such changes in value as have been supported by
the Pre-Emption Group and the Investment Association.
Accordingly, resolutions to renew such authorities will be
put to shareholders at the Company’s AGM, to be held on 18
May 2023.
The Notice of the Company’s 2023 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. The special
business at the 2023 AGM will include resolutions dealing with
the authority to allot shares, to purchase its own shares and
call General Meetings on not less than 14 clear
days’ notice.
90
Tyman plcAnnual Report and Accounts 2022Governance Results and dividend
The Group’s results for the year are shown in the Consolidated
statement of comprehensive income on page 148.
An interim dividend of 4.2 pence per share was paid to
shareholders on 9 September 2022 and the Directors are
recommending a final dividend in respect of the financial year
ended 31 December 2022 of 9.5 pence per share. If approved,
the final dividend will be paid on 26 May 2023 to shareholders
on the register at the close of business on 28 April 2023. The
total dividend paid and proposed for the year amounts to 13.7
pence per share.
As at 31 December 2022, the Tyman Employee Benefit
Trust held 2,560,733 ordinary shares in Tyman plc. Further
information on the Employee Benefit Trust may be found
on page 40. Dividend waivers are in place from Tyman plc
in respect of the 478,714 shares held in Treasury as at 31
December 2022, and all but £0.01 of the total dividend to the
Tyman Employee Benefit Trust.
Strategic report
Pages 2 to 139 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 42 to 49.
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 page 44 of the Strategic report.
Pursuant to Section 414c of the Companies Act 2006 the
Strategic report on pages 2 to 87 contains disclosures in
relation to future developments, dividends, finance and
financial risk management, and 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
(including the Group’s policies on ensuring the fair treatment
of disabled job applicants and the development and
promotion of disabled employees) may be found on pages 74
to 76 of the Strategic report.
Share transfer restrictions
There are no restrictions on the transfer of fully paid-up
shares in the Company.
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.
Teleios Capital Partners
Alantra Asset Management
Allianz Global Investors
Artemis Investment
Management
Aviva Investors
Chelverton Asset Management
Columbia Threadneedle
Investments
BlackRock
Janus Henderson Investors
abrdn
Ordinary shares
held as at
31 December 2022
29,665,228
16,247,141
11,543,984
8,806,331
8,778,617
8,625,000
8,259,151
7,536,860
6,938,686
6,527,868
%
15.11
8.28
5.88
4.49
4.47
4.39
4.21
3.84
3.54
3.33
Ordinary shares
notified as at
2 March 2023
30,165,312
16,014,941
11,343,984
8,806,331
8,585,975
8,662,673
8,530,270
7,473,218
6,938,686
6,527,868
%
15.37
8.16
5.78
4.49
4.37
4.41
4.35
3.81
3.54
3.33
9191
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Directors' report continued
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 are 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 104
and a statement by the auditors on their responsibilities is
given on page 144.
Employee engagement and policies
This information is included in the sustainability performance
section of the Strategic report on pages 74 to 76.
Other stakeholder engagement and policies
Information summarising how the directors have had regard
to the need to foster the company’s business relationships
with suppliers, customers and others, and the effect of that
regard, including on the principal decisions taken by the
company during the financial year, is included in the s172
statement on pages 80 to 83.
Going concern
Because of the work undertaken to support the viability
statement, which may be found on pages 84 to 86, 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, Deloitte LLP have indicated their willingness to
continue in office, and a resolution that they be reappointed
will be proposed at the 2023 AGM.
Political donations
The Company did not make any political donations during the
year (2021 and 2020: £Nil). Tyman's policy is that it does not
make political donations in any form.
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 115 to 139. 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
2 March 2023
Company registration number: 02806007
92
Tyman plcAnnual Report and Accounts 2022Governance Chairman’s introduction
The Board has made good
progress against all its 2022
priorities and projects related
to the Group's long-term
strategy.”
Nicky Hartery
Non-executive Chair
Dear shareholder
On behalf of the Board, I am pleased to present the Group’s
Corporate Governance Report for the financial year ended
31 December 2022. This report explains our governance
framework and the Board’s key actions during the year,
with particular emphasis on our approach to aligning our
purpose and values with our strategy and culture, and our
engagement with the Group’s various stakeholders.
The Board’s focus in 2022
On pages 100 and 101 (Work of the Board in 2022), we have
set out the range of matters that the Board considered in the
year. Such matters included in-year topics such as: responding
to the Russian invasion of Ukraine; the refinancing of bank
and US Private Placement debt; supply chain challenges; the
multi-faceted effects of inflation on the business; and the
impact of the cost-of-living crisis on our people. The Board’s
matters also included projects related to our long-term
strategy, such as: upgrading the Group’s IT systems to support
greater efficiency; oversight of the Group's footprint projects;
and progressing Tyman’s sustainability roadmap.
Sustainability
Sustainability is core to Tyman’s overall strategy, and the
Board maintains oversight of the implementation of the
Group’s sustainability initiatives. In 2022, the Board considered
and approved the Group’s TCFD statement and its mitigation
strategies to meet near-term (2030) carbon emissions
reduction targets, and the submission of these targets to the
Science Based Targets Initiative (SBTi) for validation. It has
also supported the Group’s engagement with its customers,
suppliers and debt and equity investors, which has led to
the incorporation of safety and sustainability targets into
the Group’s US Private Placement notes and revolving credit
facility in 2022. Through the Remuneration Committee of
the Board, Tyman continues to embed ESG targets as an
LTIP metric and such targets constitute 15% of the Executive
Directors’ LTIP awards. For further information, please refer to
pages 130 and 137.
Progress in 2022
Last year, as the result of an externally-facilitated review of the
effectiveness of the Board and its committees, the following
priorities were set for 2022:
• Continually monitor Board composition and succession
planning alongside the development of its skills matrix
and a formal appraisal process.
• Develop a forward agenda that combines both formal and
informal time, including increased use of private meetings
between the CEO and the Non-executive Directors during
the year.
• Continually review and ensure alignment of its appetite
for risk against the changing business landscape and its
strategic imperatives as the Group evolves.
9393
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Chairman’s introduction continued
I am pleased to report that we have made good progress
against all of these priorities, as we:
Engagement with stakeholders
• Have developed the Board’s skills matrix to help monitor
Board composition and aid succession planning;
• Arranged for pre-meeting calls between the CEO and each
of the Non-executive Directors throughout the year; and
• Have considered the Group’s principal and evolving risks
at the Board and its Audit & Risk Committee.
Board priorities for 2023
The Board’s priorities for 2023 will be:
Ensure that the organisation has the appropriate
capabilities to achieve its strategic objectives.
To support M&A activity aligned to our strategy and
purpose.
In 2022, we engaged extensively with a broad range of our
stakeholders. Details of such engagement can be found in our
section 172 statement.
Whilst we were able to engage with many of our equity and
debt investors through meetings with members of the Board
and senior management, there were fewer such opportunities
to do so with our retail investors. Therefore, we organised
a ‘hybrid’ AGM in 2022 which enabled all shareholders to
participate in person or online via an audio webcast. We
intend to do the same this year to enable our shareholders
to interact with the Board. Information on how to participate
digitally, both in advance and on the day, will be set out in the
Notice of the Company’s AGM.
Thank you for your support.
Further embed sustainability into the business and the
monitoring of progress against targets.
Nicky Hartery
Non-executive Chair
2 March 2023
•
•
•
94
Tyman plcAnnual Report and Accounts 2022Governance Statement of governance
The Board
Key Responsibilities
The Board’s role is to promote the Group’s long-term sustainable success for the benefit of all the Company’s stakeholders,
generating value for the Company’s shareholders and contributing to wider society. The Board sets the Group’s long-term
business strategy and oversees its purpose and values, which underpin its culture.
Audit and Risk
Committee
Key Responsibilities
Monitors the integrity of the
Group’s external reporting and
provides oversight and governance
of its internal controls, risk
management and relationship with
the external auditors.
Remuneration
Committee
Key Responsibilities
Nominations
Committee
Key Responsibilities
Responsible for setting the
remuneration policy and individual
compensation for the Board Chair,
Executive Directors and senior
management to ensure that
the Group’s long-term interests
are achieved.
Responsible for appointments to
the Board, succession planning
and also the review of the Board’s
structure, size and composition
to ensure that it has a balance of
skills, knowledge, experience
and diversity.
Executive Committee
Key Responsibilities
The Board delegates day-to-day responsibility for managing the business to the Executive Committee. The Executive
Committee comprises the Chief Executive Officer, the Chief Financial Officer and the three divisional Presidents. It drives
the Group’s strategic priorities in each division, leads groupwide initiatives and reinforces the Group’s operational and
governance structures. The Executive Committee meets at least monthly and its members regularly present to the Board.
UK Corporate Governance Code: our compliance
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 Code, which is available at www.frc.org.uk, and complied with the Code’s provisions throughout the
financial year.
For the year ended 31 December 2022, and up to the date of this report, the Board is pleased to report in summary below that
the Company has applied the principles of the Code and complied with the provisions set out in the Code.
9595
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Statement of governance continued
Principle
Section
Page
1. Board leadership and Company purpose
a. The Company is led by an effective and entrepreneurial Board
• Role of the Board
that promotes the long-term sustainable success of the company,
generating value for shareholders and contributing to wider society.
b. The Company’s purpose, values and strategy align with its culture.
All Directors act with integrity, lead by example and promote the
desired culture.
c. The Board seeks to ensure that necessary resources are in place
for the Company to meet its objectives and measure performance
against them. A framework of prudent and effective controls is being
established to enable risk to be assessed and managed.
•
Strategy
• How governance
supports strategy
• Principal risks and
uncertainties
•
Internal control
d. The Board engages with shareholders and other stakeholders to
•
Section 172 statement
encourage their participation in the Group’s success.
e. The Board oversees workforce policies and practices to ensure that
they are consistent with the Company’s values and support its long-
term sustainable success. The workforce is able to raise any matters of
concern through various channels.
• Workforce engagement
•
Speak Up
2. Division of responsibilities
f. The Chair is objective and leads an effective Board with constructive
relationships.
g. The Board comprises of an appropriate combination of Non-executive
and Executive Directors, with a clear division of responsibilities.
• Our governance
framework
• Board composition and
Non-executive Director
independence
h. Non-executive Directors commit appropriate time in line with
• Directors
their roles.
• Board and Committee
attendance
• Board effectiveness
evaluation
i. The General Counsel & Company Secretary and the appropriate
policies, processes, information, time and resources support the Board.
• How governance
supports strategy
96
Tyman plcAnnual Report and Accounts 2022Governance
Principle
Section
Page
3. Composition, succession and evaluation
j. There is a transparent procedure for Board appointments and a
succession plan that recognises merit and promotes diversity.
• New Director
appointment process
k. There is a combination of skills, experience and knowledge across the
Board and its committees.
• Board composition and
Non-executive Director
independence
l. The Board’s annual evaluation considers its overall composition,
• Directors
diversity and effectiveness.
• Board effectiveness
evaluation
4. Audit, risk and internal control
m. Tyman’s policies and procedures safeguard the independence and
•
effectiveness of internal and external audit functions. The Board has
satisfied itself of the integrity of financial and narrative statements.
Internal audit
and internal audit
effectiveness
n. A fair, balanced and understandable assessment of the Group’s position
and prospects was presented.
•
External audit
• Review of the 2022
Annual Report &
Accounts
o. Procedures manage and oversee risk, the internal control framework,
and the extent of principal risks that the Group is willing to take to
achieve its long-term objectives.
•
Internal control
• Risk appetite
5. Remuneration
p. Remuneration policies and practices support the Group’s strategy and
promote its long-term sustainable success. Executive remuneration is
aligned to the Group’s purpose, values and strategic delivery.
•
The Directors’
Remuneration Policy
q. A transparent and formal procedure is used to develop policy and agree
•
executive and senior management remuneration.
The Directors’
Remuneration Policy
r. The Directors exercise their independent judgement and discretion over
remuneration outcomes, taking account of the relevant wider context.
• Remuneration
Committee
priorities 2022
9797
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Statement of governance continued
Role of the Board
The Board is responsible for promoting the Group’s long-term
success for the benefit of all its stakeholders, generating
value for shareholders and contributing to the wider society.
To achieve its strategic objectives, it focuses on the Group’s
overall leadership, strategy, culture, development and
controls, which safeguard the Group’s assets and enable risks
to be properly assessed and managed.
The areas specifically considered 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
resources, processes and controls to deliver the Group’s long-
term strategy.
Matters not specifically reserved for the Board, including the
day-to-day management of the Group, are delegated to the
Executive Directors in accordance with the Group’s delegation
of authorities.
The Board assesses and monitors the Group’s culture,
ensuring that policy, practices and behaviours of the business
align with Tyman’s purpose, values and strategy. The Board
receives regular reports from the Chief Executive Officer and
the General Counsel & Company Secretary on cultural topics
such as the development and implementation of Tyman’s
Business Ethics & Compliance Programme. In addition, the
Board made several site visits and received and discussed
reports from the Workforce Engagement NED, Pamela
Bingham, following her skip-level meetings with employees
across the divisions.
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
in which 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 2022. The full statement,
together with how Tyman engages with key stakeholders, can
be found on pages 80 to 83.
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 & Risk, Remuneration and Nominations.
Membership of these Committees is made up of the Non-
executive Directors. The Board Chair is also a member of the
Nominations and Remuneration Committees.
The work of these Committees in 2022 is explained in more
detail on pages 105 to 116, and page 125. 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 88
to 89 and on the Group’s website.
The following Directors served during the year ended
31 December 2022:
Board
member
Nicky Hartery
Jo Hallas
Jason Ashton
Paul Withers
Pamela Bingham
Helen Clatworthy
Dave Randich
Appointed to the
Board
October 2020
April 2019
May 2019
February 2020
January 2018
January 2017
December 2021
Independence of Non-executive Directors
Through the work of the Nominations Committee, the Board
ensures that its members have an appropriate mix of skills,
diverse backgrounds and relevant industry experience,
such that they can challenge and support the work of the
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 internally facilitated Board and Committees'
effectiveness evaluation in 2022, 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.
98
Tyman plcAnnual Report and Accounts 2022Governance 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.
Recent Director inductions were successfully facilitated under pandemic-related movement restrictions using a combination
of in-person and remote meetings, briefing notes and both in-person as well as video tours of facilities. Details of the Board’s
newest Non-executive Director, Dave Randich, can be found on page 89.
Key responsibilities
Roles on the Board
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,
including its approach to environmental, social and governance matters, while ensuring
that the Board determines the nature and extent of the principal risks associated with
implementing its strategy
Leads the effectiveness 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
Responsible for providing the Board with details of feedback received from institutional
shareholders and any key issues raised
Brings matters of particular significance or risk to the Chair for discussion and
consideration by the Board where appropriate
Responsible for the finance, audit, tax, treasury and IT functions
Responsible for the day-to-day management of all investor relations matters and for
contact with shareholders, as well as with financial analysts
Is available for shareholders to voice any concerns that 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
Chief Financial
Officer
Senior Independent
Director
Non-executive
Directors
Bring complementary skills and experience to the Board
Constructively challenge the Executive Directors on matters affecting the Group
9999
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Statement of governance continued
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 Hartery
Jo Hallas
Jason Ashton
Paul Withers
Pamela Bingham
Helen Clatworthy
Dave Randich
Board
Audit
Remuneration
Nominations
AGM
8/8
8/8
8/8
8/8
8/8
8/8
8/8
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
2/2
2/2
2/2
2/2
2/2
2/2
2/2
1/1
1/1
1/1
1/1
1/1
1/1
1/1
Attendance at Board meetings
Eight scheduled Board meetings were held during the year. The Board also met on an ad hoc basis on other occasions as
required. Where expedient, 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 2022
The Board’s principal matters during 2022 are summarised below:
Principal matter
Health
and safety
• Received reports on the delivery of safety turnaround plans for the Group’s priority four plants
(see page 70)
• Received details of every health and safety lost time incident, including remedial actions
taken, lessons learned and future preventative measures (see pages 70 to 71)
• Oversaw the deployment of the Group’s Safety Leadership Programme and safety leadership
tours, safety improvement opportunities and positive safety observations (see pages 70 to 71)
Strategy and
sustainability
• Approved the updated Group strategy (see pages 20 to 22)
• Received progress reports on the implementation of the Group’s ‘Sustainability Roadmap’ (see
page 20)
• Approved of the Group’s first submission to the CDP (see page 28)
• Considered and approved of the Group’s near-term Science Based Targets in respect of the
carbon emissions across its value chain (see page 51)
• Reviewed and discussed updates on trading performance, markets and strategic initiatives,
including presentations from the Group’s senior management
• Approved the incorporation of sustainability-linked targets into the Group’s US private
placement notes and revolving credit facility when they were refinanced in 2022
• Received reports on new product development, innovations in packaging and launches
• Received reports on the Group’s upgrade of IT systems
• Approved the consolidation of the Access 360 access solutions businesses in the UK
• Monitored the M&A pipeline
Governance
• Approved key Group policies and received reports on the codification of standards
• Approved the organisation of a ‘hybrid’ AGM and the notice of AGM
• Approved the recommendation and declaration of dividends
• Approved insurance renewals
• Completed the induction of a new Non-executive Director (see page 107)
• Participated in an internally facilitated Board evaluation (see page 103)
• Assessed and monitored the Group’s culture and alignment with its purpose, values and
strategy
• Received reports from the Chairs of the Nominations, Audit & Risk and Remuneration
Committees
100
Tyman plcAnnual Report and Accounts 2022Governance Purpose, values and
group culture
• Received reports from the General Counsel & Company Secretary on general governance
updates, material legal matters and Speak Up reports (see page 74)
• Received progress reports from the General Counsel & Company Secretary on the Group’s
‘Business Ethics & Compliance Programme’ (see page 74)
• Oversaw the deployment of the Group’s ‘Leading with Integrity' workshops (see page 74)
•
Supported the Group’s discontinuation of business with Russia and Belarus
• Approved the Group’s Modern Slavery Act statement
• Received reports on the results of an all-employee survey and the follow-up actions (see
page 75)
• Received reports from the Workforce Engagement Director and the Chair of the Remuneration
Committee on meetings that each of them had with the workforce
Financial
• Actively monitored trading performance conditions, ongoing scenario modelling, monthly CFO
reports and supported management’s actions in responding to ongoing challenges
• Approved the budget for 2023 and set KPIs (see pages 24 to 25)
• Reviewed and approved the half-year 2022 and full-year 2021 annual results, viability and
going concern statements and the 2022 AGM notice
• Reviewed the Group’s risk register, risk appetite statement and the effectiveness of the
systems of internal control and risk management (see pages 42 to 49)
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 2022 AGM resolutions
• Received reports and feedback from analysts and shareholders following meetings with them
(see pages 102 and 103)
Employee
engagement
• Visits to sites and discussions with management, conducted in person or remotely (see below)
• Received and discussed reports from the Workforce Engagement NED, Pamela Bingham,
following her skip-level meetings with employees across the divisions (see page 98)
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 line with the Board’s meeting
schedule in 2022, the Board visited Tyman North America’s
Owatonna and Sioux Falls sites in person. On other occasions,
members of the Board also visited other sites.
The Chief Executive Officer, the Workforce Engagement
NED and the Remuneration Committee Chair held skip-level
employee meetings in 2022. The Chief Executive met with
more than 50 managers and supervisors from Tyman North
America sites, where they expressed 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.
The Workforce Engagement NED, Pamela Bingham, had
separate in-person and online meetings with diverse
employees and employee representatives across the Group’s
Head Office and its 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 (see page 98).
The Remuneration Committee Chair, Paul Withers, met with
employee representatives from across the Group to engage
with them in a dialogue on the alignment of executive
remuneration with wider company pay policy. By meeting
with a diverse range of representatives from the workforce
covering various levels of seniority, location, business units
and gender, he was not only able to explain the behaviours
that the Group’s remuneration framework aim to promote,
but also hear their views. As with the Workforce Engagement
NED’s skip-level meeting, Paul’s meeting was reported to
the Board and is taken into account when the Remuneration
Committee makes decisions relating to executive pay.
Specifically, the Remuneration Committee will take the output
from these engagements into consideration as it develops the
Directors’ remuneration policy during 2023, which will include
engagement with shareholders before a revised policy is
tabled at the Group’s 2024 AGM.
101101
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Statement of governance continued
Board performance evaluation
The Board undertakes a formal evaluation of its performance, and that of each Director, on an annual basis. Such evaluations
are conducted in accordance with the principles set out in the Code and include consideration of the skills, composition and
performance of the Board, its Committees and individual Directors.
The following sets out the progress on key recommendations concluded in the 2021 Board evaluation, which was conducted by
Dr Tracy Long of Boardroom Review, who has no connection to Tyman or its Directors:
Recommendations
Progress made in 2022
The Board should continually monitor its composition and
succession planning alongside the development of its skills
matrix and a formal appraisal process.
The Board should develop a forward agenda that combines
both formal and informal time, including increased use of
private meetings between the CEO and the Non-executive
Directors during the year.
The Board’s skill sets and schedule for the Board’s refreshment
have been monitored by the Nominations Committee.
The CEO and each of the Non-executive Directors have had
one-to-one calls before each meeting.
The Board ought to continually review and ensure alignment
of its appetite for risk against the changing business
landscape and its strategic imperatives as the Group evolves.
This has been addressed through the Board and the Audit &
Risk Committee’s consideration of the Group’s principal and
emerging risks.
This year, the Board participated in an internal questionnaire-based assessment of the Board and its Committees, led by the
Chair and each Committee’s chair. This assessment identified the following opportunities for further development:
Finding
Actions planned in 2023
The Board has an opportunity to strengthen its ethnic
diversity.
There is an opportunity to re-evaluate the risk landscape.
•
•
In line with the Board’s schedule for its refreshment, the
Nominations Committee has prioritised the recruitment of
an ethnic minority Director in 2023.
The Board shall work with the Audit & Risk Committee to
identify emerging risks and re-evaluate existing risks.
The Board will continue to review its procedures, effectiveness
and development and composition during 2023. The
Board Chair will use the Board evaluation’s output and the
performance reviews of individual Directors to further develop
the Board’s performance in the year ahead.
The Board review also concluded that the Non-executive
Directors have sufficient time to meet their Board
responsibilities. Separately, the Senior Independent Director
led the Non-executive Directors to carry out a review of the
Chair’s performance. It was found that the Chair continues
to effectively discharge his duties and demonstrates full
commitment to the role as evidenced by the progress made in
all areas of the Board’s work.
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. They are assisted by the Group Head of
Corporate Communications & Investor Relations.
102
The 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,
the Chief Financial Officer and/or the Group Head of
Corporate Communications & Investor Relations;
•
•
•
•
four scheduled releases to the market of updates on the
financial performance of the Group;
the Chair of the Remuneration Committee contacting
institutional shareholders to consult them on any
proposals that may affect Tyman’s remuneration policy;
the Board Chair regularly engaging with larger
institutional shareholders to discuss matters including
the Board, strategy, corporate governance and succession
planning; and
a total of 117 separate meetings were held by members
of the Board and/or the Group Head of Corporate
Communications & Investor Relations in 2022 with
shareholders and prospective shareholders, analysts and
equity sales teams.
Tyman plcAnnual Report and Accounts 2022Governance 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 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 2023
financial year.
A table setting out the Company’s major shareholders can be
found on page 91.
2023 AGM
The Company’s AGM is a key date for the Board, as it provides
the Directors with the opportunity to meet with shareholders
and both private and institutional investors.
In 2022, in line with the Financial Reporting Council’s
guidance, which was published in ‘Corporate Governance
AGMs: An Opportunity for Change’, the Company organised
a ‘hybrid’ AGM that allowed shareholders to attend in person,
or electronically via a live audio webcast. This AGM format
allowed for shareholders to be counted in the quorum, ask
questions of the Directors and cast live votes via the Lumi
platform, whether or not they were able to travel to the venue.
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 at various
parts of the year, a number of the meetings were conducted
online or over the telephone.
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 & Risk Committee report on
pages 108 to 114.
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.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman 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
2 March 2023
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.
104
Tyman plcAnnual Report and Accounts 2022Governance Nominations Committee report
Nicky Hartery
Chair of the Nominations Committee
Number of meetings: 3
Membership of the
Committee:
• Nicky Hartery (Chair) – appointed
October 2020
• Paul Withers – appointed
February 2020
• Pamela Bingham – appointed
January 2018
• Helen Clatworthy – appointed
January 2017
Dear shareholder
I am pleased to present the Nominations Committee’s report
for the year ended 31 December 2022.
Role and responsibilities of the Committee
The Committee’s role is to support the Board within the
Group’s governance framework by providing oversight
of the business’s leadership needs, both Executive and
Non-executive, with a view to ensuring that the Group is
able to implement its strategy, achieve its objectives and
compete effectively. It ensures that the management team
is constructively supported and challenged 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 across short and long-term timescales.
The Committee ensures all Board appointments are made in
line with the Group’s Diversity & Inclusion Policy. This states
that all decisions involving people, including recruitment,
are based on objective assessment that reflects talent,
engagement and achievement and are not subject to any
form of bias.
The Committee’s full terms of reference are available on
our website.
Committee meetings
The Committee met twice in 2022. In addition to the members
of the Nominations Committee, who are all independent
Non-executive Directors, and the General Counsel & Company
Secretary, the Chief Executive was invited to attend whenever
the Committee felt that it was necessary to enable a full
discussion of its agenda items.
Key activities of the Committee
in the last twelve months
The Committee considered the following in 2022:
• Recommended re-election of the Board at the 2022
Annual General Meeting
•
•
The size and composition of the Board, including the
balance of skills, knowledge, independence, experience
and gender and ethnic diversity
The recommendations to shareholders for the re-election
of each member of the Board
• Progress on the Committee’s 2022 objectives
•
•
•
The results of the Committee’s performance
evaluation
The Committee’s terms of reference
The Nominations Committee report for inclusion in the
2021 Annual Report and Accounts
•
The Committee’s priorities for 2023
105105
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Nominations Committee report continued
Board skills
Our Board possesses a broad range of knowledge and
experience from a variety of industries and sectors. The
Nominations Committee seeks to ensure that the Board and
its committees have the skills required to deliver Tyman’s
strategy and objectives in the longer term, and to identify
the potential skills and experience that may become lost with
the retirement of any Non-executive Directors. The Board will
keep this mix of abilities and expertise under review to ensure
it remains appropriate as and when the Board's composition
or Tyman's strategy evolves.
Diversity
The Committee, the Board and Tyman, as a whole, pay
full regard to the benefits of diversity when searching for
candidates for the Board, the Executive Committee and other
appointments, following the principles of the Group's diversity
and inclusion policy (which is available to view on the Group's
website. The Board believes that embracing diversity, in all
its forms, enables the sharing of each individual’s unique
perspective, which promotes inclusivity and supports good
decision making. Accordingly, all Board appointments are made
on merit against a set of objective criteria informed by the skills
and experience required for each role.
Although Tyman is not currently a constituent of the FTSE 350
index, the Board supports the FTSE Women Leaders Review
(FWLR), which seeks to improve board and senior leadership
gender diversity across FTSE 350 companies. The following
table sets out the Group’s achievements in respect of the
indicators measured by the FWLR:
Level
Board
Executive Committee
Direct Reports to the Executive
Committee
% Female
Representation
42.9%
40%
24%
The Committee also aims to satisfy the recommendations of
the Parker Review on Ethnic Diversity by 2024, in line with the
Board’s schedule for its progressive refreshment.
Review of findings from the 2022
internal Board evaluation
The Board’s 2022 evaluation questionnaire (details of which
can be found on page 102) confirmed that the Directors believe
that the Board: has a clearly understood purpose; works well as
a team (each Director also fulfils their individual roles); has an
open and inclusive style that enables good debate on the main
business issues; has an appropriate combination of Executive
and Non-executive Directors, such that no one individual or
small group of individuals dominates the Board’s decision
making; and is agile and effective in its decision making, taking
in all inputs and debate whilst having a clear bias for action.
The Board’s main areas of focus in 2023 shall be:
106
Tyman plcAnnual Report and Accounts 2022Governance •
Seek opportunities to improve its ethnic diversity
• Continue to evaluate existing risks and strengthen process
to identify emerging risks
Committee performance evaluation
The Committee’s own evaluation concluded that the Directors
were, broadly, satisfied with its performance overall and
that it had fulfilled its priorities for 2022. Nonetheless, it was
observed that the Committee has an important role in the
progressive refreshing of the Board and the development of
the Group’s ‘bench strength’.
Committee membership
The members of the Nominations Committee during the year
ended 31 December 2022 were as follows:
Nominations
Committee member
Nicky Hartery (Chair)
Paul Withers
Pamela Bingham
Helen Clatworthy
Dave Randich
Board changes
Appointed to the
Committee
October 2020
February 2020
January 2018
January 2017
December 2021
Helen Clatworthy has informed the Board of her intention to
retire during 2023, following the successful recruitment of her
successor. The Committee has engaged Russell Reynolds, an
external executive search consultancy, with which the Board has
no other connection, to advise it on the recruitment process.
Committee priorities for 2023
The priorities of the Committee for 2023 are set out below:
• Continued oversight of the establishment of the Group’s
talent excellence programme, including ensuring that the
right organisational capability is in place for the Group
to deliver on its strategic and diversity and inclusion
priorities through senior management succession
planning and the strengthening of talent pipelines
•
Further development of the Board’s skills matrix to
support its succession planning
• Recruitment of a new Chair of the Audit & Risk Committee
On behalf of the Nominations Committee
Nicky Hartery
Chair, Nominations Committee
2 March 2023
Non-executive Director induction
Upon his appointment to the Board, Dave Randich received
a tailored induction plan to help him gain a thorough
understanding of Tyman’s business and his role as a
Non-executive Director.
For an overview of Tyman, he was provided with an
induction pack comprising of a broad range of key
information, including papers of the Board and its
committees, meeting minutes, details of operational and
financial performance, explanations of key controls and
the Group’s risk management, as well as key policies and a
recording of the Group’s virtual conference.
Introductory meetings were held with each other
member of the Board and the Executive Committee,
the General Counsel & Company Secretary, the Group
Financial Controller, the Group Head of Internal Audit &
Risk Management, the Director of Health & Safety and
Sustainability and other key senior managers. As he was
joining the Audit & Risk, Nominations and Remuneration
Committees, additional time with the Chairs of each of
those Committees was scheduled to cover key issues.
In addition to the sites that the Board visited in 2022, he
also undertook site visits to the Group’s plants in the UK,
the USA and Mexico and met with Tyman employees at its
Head Office.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Audit and Risk Committee report
Dear shareholder
On behalf of the Board, I am pleased to present an update
on the work of the Audit and Risk Committee during the
year. The Committee has continued to support the Board in
development of the Group’s risk management and internal
control framework, as well as ensuring the integrity and
quality of external financial reporting. This report sets out the
activities of the Committee during 2022 and the Committee’s
priorities for the year ahead.
In 2022, the Committee continued to focus on the core
aspects of governance within the Group. This included the
enhancement of the Group’s risk management and internal
controls frameworks, progress with establishing the new
approach to internal audit, and overseeing the transition to
our new external auditors, Deloitte.
The Committee was pleased with progress made in
enhancing the risk management and internal controls
frameworks, which included embedding the Code of Business
Ethic and, the Group Minimum Standards of Financial Control
framework. The implementation of a programme of risk
management activities, developed by the Group Head of
Internal Audit and Risk Management, further enhances the
Group’s approach to enterprise risk management. In addition,
the Group implemented a Controls Self-Assessment (CSA)
process, which was undertaken across the Group’s operations
twice in the year to assess compliance with key controls and
identify areas for improvement in support of the Group’s
ongoing enhancement of internal controls, including the
Group’s policies.
The updated structure and approach to internal audit has
continued to develop well in the year and forms a basis for
an increasingly risk-based approach to internal audit as we
broaden internal audit activities in 2023. The 2022 internal
audit plan is complete, and I am pleased to report that on-site
internal audits have resumed fully as the impact of COVID-19
restrictions has eased.
The Committee oversaw the successful transition of the
external auditors, from PwC to Deloitte.
The Committee has also spent time understanding the
requirements of the Taskforce on Climate-Related Financial
Disclosures (TCFD) and environmental, social and governance
(ESG) reporting, including the impacts on the Group’s risk
framework. The Committee is satisfied with progress made
to date.
The Committee has focussed
on providing effective
governance over the Group’s
financial reporting, risk
management, internal controls
and oversight of the transition
of our new external auditor.”
Helen Clatworthy
Chair, Audit and Risk Committee
Number of meetings: 5
Membership of the
Committee:
• Helen Clatworthy (Chair) –
appointed January 2017
• Paul Withers – appointed
February 2020
• Pamela Bingham – appointed
January 2018
• David Randich – appointed
December 2021
108
Tyman plcAnnual Report and Accounts 2022Governance 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
by the Committee and updated to include the Committee’s
responsibility for monitoring the integrity of climate-related
reporting. A copy may be found on the Group’s website.
In 2022, the Committee met four times, with meetings timed
to coincide with key dates in the financial reporting and audit
cycles of the Group. 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 Board Chair, Chief
Executive Officer and 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, Deloitte, 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’s finance
function, Deloitte 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
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
Deloitte 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 2022 were as follows:
Committee
member
Helen Clatworthy (Chair)
Paul Withers
Pamela Bingham
David Randich
Appointed to the
Committee
January 2017
February 2020
January 2018
December 2021
All members are independent Non-executive Directors.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Audit and Risk Committee report continued
Under provisions of the UK’s Corporate Governance Code 2018
(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 such recent and relevant financial experience.
Each member of the Committee has the requisite competence
including significant international, commercial and
operational skills and experience that are relevant to an
international manufacturer and distributor of engineered
components to the building industry.
• Reviewed the financial results for the full-year ended 31
December 2022, results announcement, and the Annual
Report and Accounts. This included a review of the TCFD
disclosures
• Reviewed the significant judgements and estimates that
impact the financial statements
• Considered the appropriateness of accounting policies
• Reviewed correspondence with the Financial Reporting
Council
Key areas of focus in relation to
the financial statements
Financial reporting
Key activities of the Committee
in the last twelve months
• Reviewed the financial results for the half-year ended 30
June 2022 and recommendation of results announcement
The Committee is responsible for monitoring the integrity of
the financial statements, including judgements and estimates.
In undertaking this review, the below significant issues were
discussed with management and the external auditors. As
part of these discussions, the Committee provided challenge
to management on the appropriateness of assumptions, and
the areas of particular consideration outlined below, and
sought clarification as necessary:
Area of focus
Audit and Risk Committee review
Conclusions
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 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 84
to 86).
Carrying value of goodwill
and intangibles
See note 10 to the Group
financial statements
The Group has goodwill and intangible assets of £456.2 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, the
level of headroom, comparison to external market information
and sensitivity analysis.
The Committee discussed the report with management and
Deloitte, 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 level of uncertainty arising from the current
macroeconomic uncertainty and the potential impact of climate
change on longer-term cash flows and the terminal growth rate.
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.
The Committee received a detailed report from management
outlining key assumptions used in the going concern and viability
assessments, along with analysis of liquidity headroom and
covenant compliance under a base case scenario, three severe,
but plausible, downside scenarios reflecting the potential impact
of the crystallisation of certain principal risks, and a reverse stress
test scenario.
The Committee considered whether the key assumptions used
were appropriate, including the assumed mitigating actions
in the downside scenarios, particularly in light of current
macroeconomic uncertainty. Consideration was also given to
the appropriateness of the assessment period, which has been
increased from three years to five years, with the refinancing of
both the USPP and RCF debt completed during the year extending
the maturity profile supporting this longer term view.
Going concern and
viability assessment
See note 2.2 to the Group
financial statements and
pages 78 to 80
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Tyman plcAnnual Report and Accounts 2022Governance Area of focus
Audit and Risk Committee review
Conclusions
Alternative performance
measures (APMs) and
exceptional items
Further information on
APMs can be found on
pages 208 to 215 and on
exceptional items in note
6 to the Group financial
statements
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.
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.
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. In addition, the Group uses standard costing to value
inventory, with a proportion of purchase price and manufacturing
variances being capitalised in order to revalue inventory to actual
cost. The allocation of variances to inventory on hand requires
some estimation, including the calculation of stock turn.
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. The Committee also considered the basis on which the
purchase price and manufacturing variances were capitalised into
inventory.
The Committee was satisfied
that APMs are appropriate
and provide useful
information to users, 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.
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.
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
judgement and estimates. Deloitte 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.
Financial Reporting Council review
In September 2022, the Group received a letter from the
Financial Reporting Council (FRC) as part of its regular review
and assessment of the quality of corporate reporting in the
UK. The letter included a request for further information on
the Group’s Annual Report and Accounts for the year ended
31 December 2021. The Committee had oversight of the
responses provided by management to the FRC’s enquiries.
Management corresponded with the FRC, undertaking to
restate the classification in two areas of the 2021 comparative
balance sheet.
The first restatement was to offset deferred tax assets against
deferred tax liabilities where these met the requirements
for offset, which had the effect of reducing deferred tax
assets and deferred tax liabilities by £8.4 million. The second
restatement was to present bank overdrafts gross as part
of borrowings rather than cash on the basis that the cash
pooling arrangement does not meet all of the criteria
for offset, with the effect that cash and cash equivalents
increased by £18.9 million and current borrowings increased
by £18.9 million. These restatements did not affect the
Group’s income statement, net assets, cash flows, or KPIs.
Further details of the restatements can be found in note 2.4 of
Consolidated Financial Statements on pages 153 to 154.
The review conducted by the FRC was performed solely on
the Group’s published 2021 Annual Report and Accounts and
does not provide any assurance that the Annual Report and
Accounts are correct in all material respects. The FRC’s review
did not benefit from detailed knowledge of the Company’s
business or an understanding of the underlying transactions
entered into. The FRC accepts no liability for reliance on their
review by the Company or any third party.
111111
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Audit and Risk Committee report continued
Risk and control
Key activities of the Committee
in the last twelve months
Risk
• Reviewed the risk management framework, the Group’s
risk philosophy, risk appetite and the principal risks and
uncertainties facing the Group, including how those risks
evolved during the year
• Participated in risk management discussions and received
presentations on the Group’s risk management process
and key developments underway or planned for the
year ahead
Going concern and viability
• Reviewed the going concern and viability assessments
prepared by management, including key assumptions
• Reviewed the viability statement and recommendation of
approval to the Board
Internal control and internal audit
• Assessed the effectiveness of Group’s systems of internal
control and risk management
• Reviewed the divisional internal control representations
• Approved the Group Internal Audit Charter
• Reviewed the key developments in Internal Audit
• Approved the internal audit plan for the year
• Reviewed the internal audit reports, recommendations
and mitigating plans
• Assessed the effectiveness of internal audit
The Group’s assessment of its principal risks and uncertainties
is set out on pages 42 to 49. The key elements of risk
management and internal controls are detailed on page 44 of
the risk management section of this Annual Report.
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.
Risk
During the year, the Committee promoted continuous
improvement in the Group’s risk management system, which
included reviewing the risk management structure and
approach, the Group’s risk appetite and principal risks and
uncertainties facing the Group.
In line with the priorities set out in the 2021 Annual Report,
the Committee has considered the Group’s information
security risks and emerging risks.
The Committee confirmed to the Board it had carried out a
robust assessment of the principal risks, including emerging
risks and developments throughout the year.
Internal control
The Committee receives regular reports throughout the year
to monitor the Group’s internal control systems, including
reports from the Chief Financial Officer, Group Financial
Controller and the Group Head of Internal Audit and Risk
Management. The Committee has monitored updates in
corporate governance and financial reporting requirements
including those recommendations made by BEIS on corporate
reform. The Group has continued to make progress with
strengthening controls to work towards compliance with
the new requirements, including implementing a Minimum
Standards of Financial Control Framework, strengthening the
Accounting Policies Manual, implementing a Control Self-
Assessment (CSA) process to assess the status of compliance
on financial and non-financial areas of risk across the Group,
and rolling out a series of new policies and standards as part
of the development of a Group Manual.
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. In addition,
the Committee reviewed the outcomes from the CSA process.
As outlined in the risk management section of this report
on pages 42 to 49, 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 Officer 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 2022 and up to the
date of approval of the Annual Report and Accounts.
Internal audit and internal
audit effectiveness
Having appointed the Group Head of Internal Audit and
Risk Management in 2020, I am pleased to report that good
progress has continued throughout 2022 in enhancing the
Group internal audit and risk management function.
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Tyman plcAnnual Report and Accounts 2022Governance The internal audit function, led by the Group Head of Internal
Audit and Risk Management is now well established and has
a clear plan in place to further develop an increasingly risk-
based internal audit programme.
Throughout the year, the Committee has reviewed progress
in relation to the further development of the Group’s risk
framework including its risk philosophy and appetite, an
assessment of risk management maturity and proposals
for further enhancing and embedding enterprise risk
management. The Committee has also reviewed and approved
the ongoing enhancements to the internal audit function and
its key activities, including the Internal Audit Charter.
In the context of appointing the Group Head of Internal Audit
and Risk Management, the Committee has reviewed and
approved the resourcing and budget of the internal audit
function more broadly. The Committee has considered the
current co-sourcing relationship with BDO, led by the Group
Head of Internal Audit and Risk Management. The relationship
with BDO has operated well throughout 2022 and a decision
not to tender this co-sourcing arrangement has been made.
The Group Head of Internal Audit and Risk Management has
attended every meeting of the Audit and Risk Committee.
He has 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 and has had access to the Chair of the Board as
required.
The 2022 internal audit plan was completed, and the number
of audits has increased year on year as the impact of
COVID-19 and government restrictions have eased across the
Group. In 2022, there were a number of reviews in the Group’s
operations in the UK, Italy, Spain, Dubai, the US and Mexico,
all of which were completed on-site.
The Committee reviewed the activity of the internal audit
throughout the year, including progress in delivering
the 2022 audit plan, audit reports, completion of audit
recommendations, and approved the 2023 internal audit
plan. The focus of the internal audit in the year has been
on a range of risk areas and included reviews of key Group
policies, financial and IT controls. Regular review and tracking
of internal audit recommendations takes place throughout
the year, complemented by follow-up audits, as appropriate,
based on risk.
The Audit and Risk Committee reviewed the effectiveness
of internal audit for the financial year with written feedback
from Committee members, Executive Directors and members
of senior management including members of the Executive
Committee. Based on a review of the feedback, the Committee
concluded the function had performed well. No significant
issues for improvement were noted and areas where
opportunities exist will be captured as the function continues
to evolve. The Committee confirmed that it considered
that the internal audit function and had been effective in
discharging its duties and resources appropriately.
Moving into 2023, the Committee looks forward to supporting
the Group Head of Internal Audit and Risk Management in
further developing 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
• Oversaw the transition in auditors from PwC to Deloitte
following the competitive tender process conducted
in 2021
• Reviewed and approved Deloitte’s terms of engagement
and audit plan, including audit fees, scope, risk
assessment and the threshold levels of materiality for the
Group's financial statements
• Considered the independence and objectivity of Deloitte
• Reviewed Deloitte’s report following completion of the
audit and the management representation letter
• Reviewed and approved the policy on the provision of non-
audit services by the external auditors
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
As outlined in the 2021 Annual Report and Accounts, during
2021, the Audit and Risk Committee oversaw a formal tender
process for external audit services for the financial year
ending 31 December 2022 onwards. Following a robust
process, the Board appointed Deloitte to succeed PwC and a
resolution was passed to appoint Deloitte as external auditor
at the 2022 AGM, with James Hunter taking the role of Group
audit partner on appointment.
External audit effectiveness
A key responsibility of the Committee is ensuring the
continued effectiveness of the external audit.
The Committee has met regularly with Group management
and with Deloitte during private sessions during the year,
and obtained informal feedback on the audit process.
The Committee has considered effectiveness through
observations through the audit tender process, interactions
with Deloitte, and the review of reports prepared by Deloitte.
The Committee was satisfied the transition of auditors has
been successful and there were sound working relationships
between the Group’s finance teams and the audit team. As
it is Deloitte’s first year, a formal effectiveness assessment
has not yet taken place and this will be conducted following
conclusion of the 2022 audit.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Audit and Risk Committee report continued
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 Deloitte has
provided an effective audit.
Auditors’ independence and objectivity
The Committee recognises the importance of auditors’
independence and receives reports from Deloitte during
the year in respect of their compliance with the fundamental
principles of objectivity, integrity and professional behaviour,
including independence. Deloitte has provided its annual
independence letter to the Audit and Risk Committee in
March 2023. 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. A copy of this policy may be found
on the Group’s website.
The Committee was satisfied with the external auditors’
independence and objectivity.
Audit and non-audit fees
The Committee considered audit fees as part of the 2021 audit
tender and was able to benchmark the fee to ensure it was
appropriate to enable an effective and high-quality audit to
be conducted. The fee for the 2022 Group audit is £1.1 million
(2021: £1.0 million). The increase in the fee is primarily driven
by an increase in audit market rates. Further information in
respect of the audit fee can be found in note 4 to the Group
financial statements.
• Reviewed compliance with non-financial reporting
practices and procedures
• Reviewed the Group’s consolidated Annual Report
and Accounts for the financial year ended 2021 and
reported to the Board that they were fair, balanced and
understandable
• Recommended that the Board approve the half-year and
full-year results announcements
Governance
The Committee assessed the Group’s compliance with the
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 a review of the
sustainability report, stakeholder engagement disclosures and
s172(1) statement.
The Committee is satisfied that the Group has complied with
the Code and non-financial reporting regulations.
Committee effectiveness
Committee effectiveness was included as part of the overall
internally facilitated effectiveness evaluation of the Board and
its committees, and the Committee was found to be effective.
The report on the Board and Committees evaluation can be
found on page 102.
Audit and Risk Committee priorities for 2023
The priorities for the Committee for 2023 are set out below:
• Continued focus on financial reporting and related
internal controls including the Group’s climate change and
sustainability related disclosures
During 2022, non-audit fees paid to Deloitte were 6.0%
(2020: 5.1%) of the annual Group audit fee. This work related
entirely to the provision of compliance or regulatory services
customarily performed by external auditors, including the
interim review, which is classed as a non-audit service.
Approval of the Audit and Risk Committee is required for all
non-audit services.
• Oversight of plans to prepare for, and respond to,
forthcoming changes in corporate governance and
financial reporting requirements
• Development of our Group-wide risk management
processes, including the principal and emerging risks
facing the Group. This will include tracking progress in
cybersecurity risk management
The Committee is satisfied that the provision of such
services does not, in any way, prejudice the objectivity and
independence of the external auditors.
• Oversight of the Group’s ethics and compliance
programme and related activities including fraud risk
management
Governance and Committee effectiveness
Key activities of the Committee in
the last twelve months
• Reviewed the Committee’s terms of reference and
agreement of its objectives
The results of the work on these priorities will be reported in
the 2023 Annual Report.
On behalf of the Audit and Risk Committee.
Helen Clatworthy
Chair, Audit and Risk Committee
• Reviewed and evaluated the Committee’s effectiveness
2 March 2023
• Reviewed and considered the Group’s compliance with the
Code as well as considering potential developments in UK
Corporate Governance
114
Tyman plcAnnual Report and Accounts 2022Governance Remuneration report
Dear shareholder
On behalf of the Board, I am delighted to present the report
of the Company’s Remuneration Committee for the year
ended 31 December 2022.
As in previous years, 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 current Remuneration policy, which was approved by
shareholders at the 2021 Annual General Meeting (AGM)
and which remained unchanged in 2022 (and will remain
unchanged for 2023); and
•
the Annual report on Directors’ remuneration, which
describes the implementation of our Remuneration
Policy in 2022, and how we intend to implement our
Policy in 2023. This section of the report will be put to
shareholders, for an advisory vote, at the 2023 AGM
(pages 125 to 139).
Performance and reward in 2022
As outlined in the Chair’s Statement on pages 4 to 5 and Chief
Executive Officer’s Review on pages 26 to 28, the Group’s
performance in 2022 was solid, with pricing actions, market
share gains and self-help measures delivering growth despite
lower market volumes. Financial and operational highlights
this year included:
•
•
LFL revenue growth of 5.2% against 2021
adjusted EPS growth of 8.1% against 2021
• progress with strategic initiatives to gain market share
and enhance the Group’s operational platform
•
continued progress on our sustainability roadmap with
further recognition from external agencies in the year.
As disclosed in last year’s report, the CEO’s salary was
increased to £550,000 with effect from 1 January 2022. This
reflected the second of two planned increases, consulted on
with shareholders in 2020, and aimed at aligning the CEO’s
total remuneration opportunity more closely with comparable
roles at companies of similar scale and complexity to Tyman.
Further details of the Company’s engagement with its
shareholders on the decision to implement the second stage
of the CEO’s salary adjustment can be found on page 102.
The Committee approved the implementation of this increase
having taken into account the continued strong performance
of the Group and outcomes for stakeholders achieved in 2021.
The CFO’s salary was increased by 4.1% to £344,500, in line
with the UK workforce average increase.
The CEO’s cash contribution in lieu of pension was reduced
from 15% to 7% of salary with effect from 1 January 2022,
with the CFO continuing to receive cash in lieu amounting to
7% of salary. This contribution level is fully aligned with that
available to the wider UK workforce, in line with our stated
commitment, our Policy and the expectations of investors and
proxy advisors.
115115
The Committee remains focused
on rewarding the delivery of
sustainable short and long-term
performance in a way which
supports our purpose and values.”
Paul Withers
Chair, Remuneration Committee
Number of meetings: 4
Membership of the Committee:
• Paul Withers (Chair) – appointed
February 2020
• Nicky Hartery – appointed
October 2020
• Pamela Bingham – appointed
January 2018
• Helen Clatworthy – appointed
January 2017
• David Randich – appointed
December 2021
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
The annual bonus was operated in line with the Policy for
Executive Directors in 2022. The performance in the year
delivered adjusted profit before tax modestly above the
threshold performance level. Overall, this resulted in a bonus
outturn of 22.0% of maximum and the Executive Directors will
consequently receive bonuses of 33.0% of salary for the CEO
and 27.5% of salary for the CFO. In determining the outcome of
the bonus for 2022, the profit before tax targets and the cash
metrics were adjusted to neutralise the impact of the Board’s
decision in early 2022 (after the bonus targets had been set) to
cease trading in Russia and Belarus in response to the invasion
of Ukraine. This adjustment is in line with our standard approach
for any material business disposal during the year, and was
applied on a consistent basis across the Group. The impact of
this adjustment is a slight increase in the bonus payout, from
15.1% to 22.0% of maximum for the Executive Directors. The
Committee considers this adjustment to appropriately preserve
the credibility of the incentive for all participants (by ensuring
that performance was assessed against the targets on a like-for-
like basis), and to reflect the decision to cease trading in Russia
and Belarus was taken unanimously by the Board as a whole.
No adjustments have been made for other unbudgeted external
headwinds in 2022. Further details, including bonus targets and
outcomes, are included on page 128.
The vesting period for the LTIP awarded in 2020 reached the end
of its performance period as at 31 December 2022. This award
was based equally on FY22 adjusted EPS and FY22 ROCE and,
for the Executive Directors, included an additional discretionary
underpin based on three-year relative TSR. Actual adjusted EPS
for FY22 was 35.63 pence, which was between the threshold
and stretch targets set at the start of the performance period,
resulting in 69.5% of this element vesting. Actual FY22 ROCE of
13.64% came in between the threshold and stretch, resulting in
64.9% of this element vesting. In both cases, FY22 outturns were
adjusted to neutralise the impact of the decision in 2022 to cease
trading in Russia and Belarus, consistent with principles applied
to the bonus. In approving the overall vesting outcome of 67.2%,
the Committee took into account both the discretionary relative
TSR underpin – with Tyman’s three-year TSR ranking above
median versus the constituents of the FTSE SmallCap (excluding
financial services) – and underlying Company performance more
generally. Further details are included on pages 129 and 130.
Overall, the Committee is satisfied that pay outcomes in
respect of the year ended 31 December 2022 on the adjusted
basis set out above are appropriate and commensurate with
the Company’s underlying performance, and accordingly we
have not applied any discretion.
implemented the rates set by the Living Wage Foundation for
2023, resulting in more significant increases for some of our
entry level operations and customer services colleagues.
Executive Directors will continue to receive cash in lieu of
pension at a rate of 7% of salary, in line with the UK workforce.
Maximum annual bonus opportunities will remain at 150%
of salary for the CEO and 125% for the CFO, with targets
continuing to be based on financial performance as measured
by profit and cash. Reflecting near-term strategic priorities and
the external operating environment, the weighting on profit will
be reduced from 70% to 50% with a new measure - inventory
days reduction - being introduced with a weighting of 20%. The
addition of inventory days is intended to incentivise inventory
reduction across each of the Group's divisions (and the Group
as a whole) to free up cash for investment in growth.
2023 LTIP award levels will similarly remain unchanged at
150% of salary for the CEO and 125% for the CFO. Vesting
will continue to be based on a blend of adjusted EPS, ROCE,
relative TSR and a Sustainability Scorecard, with full details of
the target ranges for each of these measures on page 137.
Employee engagement on
executive remuneration
Reflecting the Board’s commitment to an honest and
open dialogue with employees, this year I led a skip-level
meeting with a range of employees from across the Group.
At this meeting, I explained the structure and role of the
Remuneration Committee, outlined our remuneration
philosophy and how executive pay supports the Group’s
strategy and ambitions, and explained the similarities
and differences in the approach to pay at different levels
of the organisation. Attendees were invited to submit
questions both during and after the session, and there
was a constructive discussion around areas such as: our
approach to pay benchmarking; how we are addressing
the ongoing challenges and cost-of-living pressures arising
from the prevailing inflationary environment; the role of the
Committee’s advisors; and our calendar of work throughout
the year. The questions and comments received at, and
following, this session were presented to the Committee at
its next meeting, and will be factored into its decision making
in 2023. In light of the positive feedback received from
participants, the Committee will look to build further on this
engagement in the coming year.
Closing remarks
Implementation of Policy for 2023
The Committee remains confident that the Policy continues
to effectively support Tyman’s short- and long-term strategic
objectives and promote management and shareholder
alignment. We are therefore not proposing any significant
changes for 2023.
The Committee remains committed to keeping under review
the appropriateness of the remuneration arrangements for
Tyman in the context of its strategy and culture, as well as
wider market developments. The Committee looks forward
to your continued support at the 2023 AGM, where I will be
happy to answer questions or receive feedback on any aspect
of the Group’s remuneration.
Executive Director salaries will be increased by 5.0% with effect
from 1 January 2023, in line with the rate applied to other
senior leaders across the Group, but below the UK employee
average increase of 7.3%. In the UK, Tyman is an accredited
Living Wage Employer by the Living Wage Foundation and has
Paul Withers
Chair, Remuneration Committee
2 March 2023
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Tyman plcAnnual Report and Accounts 2022Governance Remuneration policy report
This section sets out the Remuneration policy for Executive and Non-executive Directors that was approved by shareholders
at the 2021 AGM, and which shall be effective for a period of up to three years from that date (i.e. until the Group’s 2024
AGM). Minor amendments have been made to the drafting of the Remuneration policy report from the version approved by
shareholders in 2021 (which can be found in the 2020 Annual Report) including: (i) the data used in the pay-for-performance
scenarios; (ii) page references; (iii) the pension section, to reflect that Executive Director pensions are now aligned with the wider
UK workforce; (iv) the aggregate limit for annual fees for Directors (as approved at the 2022 AGM); and (v) the section on Non-
executive Director letters of appointment, to reflect changes in Board composition during 2021.
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 124.
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.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Link to strategy
Operation
Maximum
opportunity
Metrics
Base salary is paid monthly
in cash.
There is no prescribed maximum
salary.
While there are no performance
targets attached to the
payment of salary, Company
and individual performance are
factors considered in the salary
review process.
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 to 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.
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.
Executive Directors are eligible
for a range of benefits, which
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.
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.
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Tyman plcAnnual Report and Accounts 2022Governance Link to strategy
Operation
Maximum
opportunity
Metrics
Pension
To provide a market-competitive
benefit for retirement, to
facilitate the recruitment of
high calibre individuals and
encourage their retention.
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.
The maximum pension
contribution/allowance for
Executive Directors is 7% of base
salary, in line with the majority of
the wider UK workforce.
No performance metrics apply.
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.
The maximum annual bonus
opportunity for the Executive
Directors is 150% of salary.
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.
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.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Link to strategy
Operation
Long Term Incentive Plan
Maximum
opportunity
Metrics
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 re-weight
performance measures so that
they are directly aligned with the
Company’s strategic objectives
for each performance period.
No performance metrics apply.
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.
Consists of awards of shares that
vest subject to the achievement
of performance conditions.
150% of salary.
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.
120
Tyman plcAnnual Report and Accounts 2022Governance Link to strategy
Operation
Post-employment shareholding requirement
Maximum
opportunity
Metrics
No performance metrics apply.
Aggregate annual fees to
Directors are limited to £700,000
under the Company’s Articles of
Association.
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
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.
121121
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
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.
122
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.
Tyman plcAnnual Report and Accounts 2022Governance Other policies
Policy on external appointments
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.
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.
123123
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Illustrative performance scenarios
The table below sets out performance scenarios for each Executive Director, for the financial year 2023, showing an indication of
the level of remuneration that would be received at minimum, on-target and maximum performance.
)
0
0
0
£
(
’
n
o
i
t
a
r
e
n
u
m
e
R
3,000
2,500
2,000
1,500
1,000
500
0
£2,804
46.3%
£2,370
36.5%
36.5%
30.9%
£1,504
2,151
28.8%
28.8%
£638
£1,537
44.1%
£1,311
34.5%
34.5%
29.4%
£859
26.3%
26.3%
£407
100.0%
42.4%
26.9%
22.8%
100.0%
47.4%
31.0%
26.5%
Minimum
On-target
Maximum
Maximum
+ 50% share
price growth
Minimum
On-target
Maximum
Maximum
+ 50% share
price growth
Jo Hallas
Jason Ashton
Fixed
Annual Bonus
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.
Four scenarios have been illustrated for each Executive Director:
Minimum performance
Fixed remuneration
No annual bonus
No vesting of LTIP awards
On-target performance
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)
Maximum performance
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)
Maximum + 50% share
price growth
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 2023, as set out on
page 137.
Benefits are the annualised value of benefits paid in the year ended 31 December 2022, as set out in the table of Directors’
remuneration on page 127.
•
Cash contribution in lieu of pension of 7% of base salary.
124
Tyman plcAnnual Report and Accounts 2022Governance
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 2023 AGM. This report sets out the pay outcomes in respect of
the 2022 financial year and explains how the Committee intends to operate, in 2023, the Remuneration policy that was approved
by shareholders at the 2021 AGM. The information from the single figures of total remuneration for Directors on page 127 to
the end of the section on payments to past Directors on page 133 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 2022 were as follows:
Remuneration Committee member
Paul Withers (Chair)
Nicky Hartery
Pamela Bingham
Helen Clatworthy
Dave Randich
Appointed to the Committee
February 2020 (Chair since end of March 2020)
October 2020
January 2018
January 2017
December 2021
All members of the Committee are Independent Non-executive Directors. The Chief Executive attends meetings at the invitation
of the Committee Chair. The General Counsel & Company Secretary acts as secretary to the Committee. 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 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. The meetings (members’
attendance at which is summarised on page 100) were conducted in person, using secure online meeting technology to
facilitate attendance on occasions when members and other attendees were unable to be physically present.
The Committee operates under the 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.
125125
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Committee activities during the year
The Committee considered the following matters during the past twelve months:
Salaries and fees
Bonus
Share plans
Governance
• Reviewed and approved the base salaries to be paid to the Executive Directors and senior
managers from 1 January 2023, taking account of pay award trends across the Group and
the desire to focus the available budget on supporting our lower-paid employees through
the ongoing cost-of-living pressures they in particular face.
• Approved the structure of the 2022 bonus for the Executive Directors and senior managers.
•
Following the end of the year, reviewed and approved payouts under the 2022 bonus.
• Approved the proposed participant list, award opportunities and targets for the 2022 LTIP.
•
Following the end of the year, reviewed and approved the vesting outcome of the 2020 LTIP.
• Approved the terms of the UK, US and International Employee Sharesave plans.
•
Ensured the Group complied with gender pay gap and CEO pay ratio reporting requirements.
• Reviewed 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 2022 Remuneration report.
Stakeholder engagement
Ahead of the 2022 AGM, the Committee again engaged with Tyman’s largest shareholders on the Committee’s decision to
implement the second of the two-stage adjustment to the CEO’s salary (effective 1 January 2022). The Committee welcomed the
>90% level of support for the resolution at the AGM.
As described at the start of this Remuneration Report, during the year, we also continued to evolve our approach to engaging
our workforce on the work of the Committee and the Group’s remuneration policies and practices. The Chair of the Committee
led a skip-level meeting to explain the role of the Committee and our approach to senior management compensation, before
answering questions and addressing feedback from the attendees who represented a broad sample of our workforce. Further,
the Board Director with responsibility for workforce engagement remained available to the workforce throughout the year, and
in the Board’s opinion continues to provide an effective conduit for direct engagement with the workforce about a range of
issues, including remuneration. The Committee uses all such feedback to inform its decision making.
External advisers
During 2022, the Committee was advised by Ellason LLP. As described in last year’s report, Ellason was appointed by the
Committee as its independent remuneration adviser, effective 1 January 2021.
Total fees for Ellason’s advice provided to the Committee during the year were £42,387, excluding VAT (and charged on a
time and materials basis). Ellason provided advice to the Committee on all aspects of its agenda during the year, including
incentive design, target setting, benchmarking and aspects of remuneration governance. Ellason reports to the Chair of the
Committee and provides no other service to the Group during the year. As such, Ellason is considered by the Committee to
remain independent. Ellason is a signatory of the Remuneration Consultants Group Code of Conduct and any advice received is
governed by that Code which sets out guidelines to ensure that advice provided is independent and free of undue influence.
126
Tyman plcAnnual Report and Accounts 2022Governance Remuneration outcomes for 2022
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 2021 and 2022:
Year
ended
31
December
Salary/
fees
£’000
Benefits1
£’000
Annual
bonus:
cash
£’000
Annual
bonus:
deferred2
£’000
Vested
LTIP
awards3
£’000
Cash
Payments
in lieu of
pension4
£’000
Total
remun-
eration
£’000
Other
£’000
Total
fixed
£’000
Total
variable
£’000
Executive Directors
Jo Hallas
Jason Ashton
Non-executive Directors
Nicky Hartery
Paul Withers
Pamela Bingham
Helen Clatworthy5
Dave Randich6
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
550
478
344
331
205
193
70
68
58
56
62
57
67
3
20
20
20
19
–
–
–
–
–
–
–
–
–
–
91
262
47
152
91
262
47
152
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
310
–
222
–
–
–
–
–
–
–
–
–
–
–
39
72
24
23
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,100
1,094
704
677
205
193
70
68
58
56
62
57
67
3
609
570
388
373
205
193
70
68
58
56
62
57
67
3
491
524
316
304
–
–
–
–
–
–
–
–
–
–
1 The benefits provided to the Executive Directors included car allowance and private medical insurance. There were no changes to the benefit
policies or levels during the year.
2 Deferred bonuses are not subject to further performance or service conditions.
3 The LTIP value captured in the table above reflects an estimated value of 2020 LTIP awards that are due to vest in 2023, based on the average
share price for the three months to 31 December 2022 of 211.1p, and will be trued up in next year’s Remuneration Report to reflect the share
price on the vesting date. None of the value of the LTIP is attributable to share price appreciation; the share price declined by 22.5% since the
grant date.
4
Jo Hallas and Jason Ashton each received cash in lieu of pension amounting to 7% of earned base salary in 2022 (2021: 15% for Jo Hallas and 7%
for Jason Ashton). The Executive Directors are not members of any of the Group pension schemes.
5 Due to an administrative error, Helen Clatworthy received an overpayment of fees in 2020. Her fee for 2021 reflects the deduction made to
correct this in early 2021.
6 Dave Randich was appointed to the Board on 15 December 2021. His fees include a travel supplement (of £15,000 per annum, pro-rated
for 2021).
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Determination of the 2022 Group Bonus Plan (audited)
The maximum bonus opportunities for Executive Directors in respect of the 2022 financial year were 150% of base salary for the
Chief Executive Officer, and 125% of base salary for the Chief Financial Officer. Of any amounts payable, 50% is paid in cash and
50% is deferred in shares, which vest after three years. For 2022, the Executive Directors’ bonus was based 100% on financial
metrics. The outcome of the 2022 bonus, alongside the performance targets set, is shown below:
Measure
Profit1 growth over prior year
(25% weighting)
Profit performance versus target
(45% weighting)3
Cash conversion of operating profit
(15% weighting)
Cash generation versus target
(15% weighting)4
Total bonus achieved
Threshold
0%
Target
50%
Exceeds
100%
Performance
achieved
Payout as
% of
maximum2
£79.5m
£83.5m
£87.5m
£85.8m
19.8
£86.7m
£95.1m
£104.6m
£85.8m
75%
85%
95%
78%
£84.7m
£94.1m
£103.5m
£73.7m
0.0
2.2
0.0
22.0
1 Profit is defined as Adjusted Profit before Tax. As explained in the Annual statement, the performance targets disclosed above reflect an
adjustment to neutralise the impact of the Board’s decision in early 2022 to cease trading in Russia and Belarus.
2 Calculation is performed on the basis of targets and performance in £’000 rounded to one decimal percentage place.
3 Profit performance versus target is measured on a constant currency basis.
4 Cash generation targets for the Group exclude the investment impact of major projects and reflect an adjustment to neutralise the impact of
the decision to cease trading in Russia and Belarus. The Group recorded an Adjusted Operating Cash Flow in the year of £60.1 million and the
investment impact of major projects in the year was £13.6million.
DSBP awards granted during the year (audited)
The table below details the deferred shares granted on 14 April 2022 in respect of the 2021 annual bonus award:
Director
Jo Hallas
Jason Ashton
1 Shares are deferred for three years.
Number of
shares1
Share price –
five-day
average2
Face
value3
Vesting
date
83,975
48,493
£3.126
£3.126
£262,506 March 2025
£151,589 March 2025
2 Over the five trading days preceding the date of grant (five trading days ended 14 April 2022).
3 The actual value will be the value at the vesting date and will include dividend equivalents awarded in shares.
128
Tyman plcAnnual Report and Accounts 2022Governance LTIP awards vesting in March 2023 (audited)
LTIP awards were made to the Chief Executive Officer and Chief Financial Officer on 25 March 2020, subject to performance
measured over three years ended 31 December 2022. Awards were measured against targets outlined below dependent upon
the Company’s adjusted EPS and ROCE performance over the three-year performance period, and subject to a discretionary
underpin based on, inter alia, relative TSR over the period 2020–2022.
Measure
FY22 adjusted EPS
FY22 ROCE
Performance range1
Outturn2
Threshold
(25%
vesting)
31.33p
13.0%
Stretch
(100%
vesting)
38.57p
14.2%
Weighting
50%
50%
Actual
performance
% vesting
35.63p
13.64%
TOTAL
69.5%
64.9%
67.2%
1 Straight-line vesting between these points. No award is made if performance is below threshold.
2 As reported in the Annual statement, actual FY22 performance outturns reported above have been neutralised for the impact of the Board’s
decision in early 2022 to cease trading in Russia and Belarus. No other adjustments have been made to reported adjusted EPS or ROCE for the
purposes of the LTIP.
Details of the Directors’ awards which will vest/lapse are shown below:
Date of award
Normal
vesting
date 1
Number
of shares
under award
Dividend
Equivalent
Shares
Director
Jo Hallas
25 March 2020 March 2023
Jason Ashton
25 March 2020 March 2023
204,353
146,032
14,179
10,130
Number
of shares
vested
146,854
104,941
Number
of shares
lapsed
Estimated
award value
on vesting
71,678
51,221
£309,984
£221,513
1 The awards are subject to a two-year holding period after vesting.
2 The estimated award value on vesting is based on the shares vesting (including Dividend Equivalent Shares) and the average share price for the
three months to 31 December 2022 (of 211.1p).
LTIP awards granted during the financial year (audited)
LTIP awards were granted to both Executive Directors on 14 April 2022, with face values of 150% of salary for the Chief Executive
Officer and 125% of salary for the Chief Financial Officer.
Director
Jo Hallas
Jason Ashton
Award
scheme Date of award
Normal
vesting
date 1
Number of
shares
awarded
Face value
of award
£’000
Share price2
Share award
receivable
at lower
threshold
LTIP – nil cost
options
LTIP – nil cost
options
14 April 2022 March 2025
263,915
14 April 2022 March 2025
137,755
825
431
£3.126
65,978
£3.126
34,438
1 The awards are subject to a two-year holding period after vesting.
2 Calculated by reference to the five-day average closing price prior to the grant date (five trading days ended 14 April 2022) of £3.126.
129129
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Vesting of the 2022 awards is based on four measures over a three-year period commencing 1 January 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 the targets as set out below:
Measure
Adjusted EPS
ROCE
Relative TSR
ESG
Safety
Environment
Impact
Culture
Weighting
Basis of measurement
40%
25%
20%
15%
3-year CAGR to 2024
3-year average, 2022–2024
Ranking vs constituents of the
FTSE250 Index (xIT)
Four categories
weighted equally
2024 TRIR1
2024 TCO2e per £m revenue2
2024 sustainable product revenues3
Employee engagement
Threshold
(25% vesting)
Stretch
(100% vesting)
4.5% p.a.
13.6%
Median
12.0% p.a.
15.0%
Upper quartile
5.0
56.0
21%
4.0
41.0
24%
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 using operational carbon emissions. Aligns with Tyman’s stated ambition to achieve a 50%
reduction in Scope 1 and 2 emissions 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.
130
Tyman plcAnnual Report and Accounts 2022Governance Directors’ interests in shares (audited)
The interests of each person who was a Director of the Company as at 31 December 2022 (together with interests
held by his or her connected persons) were:
Director
Shares
Options
Owned outright or vested
31
December
2022 1
31
December
20214
Unvested
and not
subject to
performance
conditions
Unvested
and
subject to
performance
conditions
Nicky Hartery
102,818
100,886
–
–
Jo Hallas
249,597
249,597
113,715
898,417
Jason Ashton
33,592
27,351
65,648
558,144
Paul Withers
90,000
50,000
Pamela
Bingham
Helen
Clatworthy
11,178
3,928
21,757
15,000
Dave Randich
50,000
–
–
–
–
–
–
–
Vested
but not
exercised
–
4,066
4,066
–
–
–
% of
salary
required
(2022)2
% of
salary
achieved 3
Guidelines
met?
Unvested
and not
subject to
performance
conditions
–
10,793
10,793
–
200%
200%
–
240%
130%
–
Yes
Building
–
–
–
–
–
–
–
–
–
–
–
–
1 From 31 December 2022 to 1 March 2023 there were no changes to the above stated interests.
2 Annualised base salary as at 31 December 2022.
3 Based on the closing price of Tyman plc ordinary shares of £2.255 on 31 December 2022, and Executive Directors’ beneficial shareholdings at
that date (i.e. shares owned outright or vested).
4 Nicky Hartery's shareholding as at 31 December 2021 has been amended from 100,000 to 100,886 due to the inclusion of automatic dividend-
reinvestment plan shares.
131131
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Directors’ interests in shares under all share plans (LTIP, DSBP and SAYE) (audited)
Shares over which awards were
Award
date
held at
1 Jan 2022
granted
during the
year
exercised
during the
year
held at
31 Dec 2022
Exercise
price
Award
scheme
Jo Hallas
LTIP
LTIP3
LTIP3
LTIP3
DSBP
DSBP
UK ESPP
UK ESPP
Jason Ashton
LTIP
LTIP2
LTIP2
LTIP2
DSBP
DSBP
UK ESPP
UK ESPP
18/03/19
225,038
25/03/20
204,353
21/05/21
205,111
–
–
–
14/04/22
–
263,915
11/03/20
29,740
–
–
83,975
14/04/22
30/09/19
30/09/20
4,066
6,727
14/05/19
155,912
25/03/20
146,032
21/05/21
118,445
14/04/22
–
137,755
11/03/20
17,155
–
14/04/22
30/09/19
30/09/20
–
48,493
4,066
6,727
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
lapsed/
cancelled
during the
year
225,038
–
–
–
–
–
–
–
155,912
–
–
–
–
–
–
–
–
204,353
205,111
263,915
29,740
83,975
4,066
6,727
–
146,032
118,445
137,755
17,155
48,493
4,066
6,727
Earliest
vesting
date1
Mar 2022
Mar 2023
May 2024
Mar 2025
Mar 2023
Mar 2025
£1.7706
Nov 2022
£1.6054
Nov 2023
May 2022
Mar 2023
May 2024
Mar 2025
Mar 2023
Mar 2025
£1.7706
Nov 2022
£1.6054
Nov 2023
1 All awards lapse ten years from the date of grant.
2 Details of qualifying performance conditions in relation to outstanding LTIP awards are summarised on page 129 of the 2021 Annual Report and
Accounts (in relation to the 2021 LTIP) and on page 130 of this Report (in relation to the 2022 LTIP).
132
Tyman plcAnnual Report and Accounts 2022Governance Payments for loss of office (audited)
There were no payments for loss of office made to past Directors during the year.
Payments to past Directors (audited)
There were no payments to past Directors during the year.
Service contracts
Service contracts were entered into between the Company and the Executive Directors as follows:
Director
Jo Hallas
Jason Ashton
Commencement
date
Notice period
in months
1 April 2019
9 May 2019
Twelve
Twelve
Details of the letters of appointment of the Non-executives are shown below:
Non-executive Director
Nicky Hartery
Paul Withers
Pamela Bingham
Helen Clatworthy
Dave Randich
Commencement
date
Latest date of
appointment/
reappointment
Expiry date
Notice period
in months
1 October 2020
1 October 2020
1 October 2023
1 February 2020
1 February 2023
1 February 2026
18 January 2018
18 January 2021
18 January 2024
9 January 2017
9 January 2023
9 January 2026
15 December 2021
15 December 2021
15 December 2024
One
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 Committee acknowledges that Executive Directors may be invited to become independent Non-executive Directors of other
listed companies that have no business relationship with the Company, and that such roles may broaden their experience and
knowledge to Tyman’s benefit.
The Executive Directors are permitted to accept such external appointment with the prior approval of the Board, which
would only be given if it does not present a conflict of interest with the Group’s activities (including consideration of whether
such individual has the capacity for the required time commitment) and the wider exposure gained will be beneficial to
such Executive Director’s development. Where fees are payable in respect of such appointment, they may be retained by the
Executive Director.
Jo Hallas was appointed as an independent non-executive director of Smith & Nephew plc on 1 February 2022.
133133
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Performance graph and table
This graph shows the value, by 31 December 2022, of £100 invested in Tyman plc on 31 December 2012, 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.
£400
£350
£300
£250
£200
£150
£100
£50
£0
Dec 2012 Dec 2013
Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020
Dec 2021
Dec 2022
Tyman plc
FTSE All-Share Index
FTSE Small Capitalisation Index
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
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
CEO
Jo Hallas
Jo Hallas
Jo Hallas
Jo Hallas
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Louis Eperjesi
Single figure
of total
remuneration
£’000
Annual
bonus
payout %
LTIP payout
%
1,100
1,094
502
1,2992
134
1,153
876
1,052
1,026
1,137
1,821
22.0
73.3
Nil1
30
n/e
39.5
51
91
58
31
90
67.2
Nil
n/e
n/e
Nil
90
42
49
100
94
100
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 in anticipation of the financial impact of COVID-19 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 had 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.
134
Tyman plcAnnual Report and Accounts 2022Governance
Percentage change in remuneration of Directors and 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), the table below covers the percentage change in salary/fees,
taxable benefits and annual bonus for each Executive Director and Non-executive Director; and will continue to be built up over
time to display a five-year history.
Director1,2,3
Nicky Hartery
Jo Hallas
Jason Ashton
Paul Withers
Pamela Bingham
Helen Clatworthy
Dave Randich
Average UK
employee8
Basic salary/total fee4
Taxable benefits5
Annual bonus6
2022 vs
20217
2021 vs
2020
2020 vs
2019
2022 vs
2021
2021 vs
2020
2020 vs
2019
2022 vs
2021
2021 vs
2020
2020 vs
2019
6.3%
15.2%
4.1%
2.9%
3.6%
8.4%
3.1%
1.5%
14.0%
10.7%
11.0%
14.4%
2.6%
n/a
n/a
-5.9%
-6.0%
n/a
1.0%
-1.3%
n/a
n/a
0.5%
0.4%
n/a
n/a
n/a
n/a
n/a
1.7%
1.3%
n/a
n/a
n/a
n/a
n/a
4.7%
4.4%
n/a
n/a
n/a
n/a
n/a
-65.4%
-68.3%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-100.0%
-100.0%
n/a
n/a
n/a
n/a
11.0%
6.1%
1.9%
27.4%
17.9%
-1.6%
-64.3%
n/a
-91.4%
1 Relevant information about the Directors and their responsibilities include:
a Nicky Hartery was appointed to the Board on 1 October 2020.
b
c
Jo Hallas was appointed to the Board as the Chief Executive Officer on 1 April 2019.
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 Workforce Engagement Director with effect from 1 March 2020.
f Dave Randich was appointed to the Board on 15 December 2021.
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 Note that Directors who were not a Director at any point during 2022 have not been included. The percentage changes in their remuneration
for prior years (and in which they were a Director) are disclosed in relevant previous Annual Reports.
4 All the Directors who were in role from April to July 2020 volunteered cuts of 25% to their base salaries and fees for four months (April to July)
due to COVID-19. Whilst the workforce also experienced cuts to their salaries ranging from 10–20%, the workforce’s forgone salaries were repaid
to them. However, the cuts to the Directors’ salaries and fees were not repaid to them. The % change from 2020 to 2021, and from 2019 to
2020, reflects this temporary reduction in basic salary or total fee for part of 2020 only. The % change from 2020 to 2021 also reflects the annual
increases awarded for 2021.
5 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.
6 The figures shown are reflective of any bonus earned in respect of the relevant financial year. The n/a for the % change in bonuses from 2020
to 2021 reflects the cancellation in 2020 (the base year) of the management bonus scheme following the onset of the COVID-19 pandemic. Non-
executive Directors are not eligible to participate in the annual bonus scheme.
7 The increase shown for Jo Hallas from 2021 to 2022 reflects the implementation of the second stage of a two-step adjustment to base salary,
as explained on page 115 of this Report, as well in our 2020 and 2021 Annual Reports. As explained in last year’s Remuneration Report, Helen
Clatworthy received an overpayment of fees in 2020 that was corrected by a deduction from her fee for 2021. This is reflected in the % increase
reported above from 2021 to 2022.
8 The average percentage change of employee FTE salary is calculated with reference to the UK workforce as at 31 December 2022. 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. The increase in average UK employee pay of 11.0% from 2021 to 2022 reflects the implementation in January 2022 of the rates set by
the Living Wage Foundation.
135135
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
Relative spend on pay
The table below sets out, for the years ended 31 December 2022 and 31 December 2021, 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
CEO pay ratio
2022
2021 Year on year
157,600
151,700
25,374
15,630
4.15%
62.34%
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
2022
2021
2020
2019
Salary
2022
2021
2020
2019
Total pay
2022
2021
2020
2019
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
1:50
1:55
1:26
1:32
1:44
1:46
1:22
1:27
1:31
1:31
1:14
1:19
Method
Option A
Option A
Option A
Option A
CEO pay (£)
P25 pay (£)
P50 pay (£)
P75 pay (£)
550,000
477,500
418,919
441,750
1,100,061
1,094,116
501,409
657,510
21,000
18,595
18,331
19,550
21,840
19,897
19,064
20,333
24,000
22,440
21,930
23,335
24,943
23,524
23,027
24,268
32,965
34,066
33,729
33,598
35,275
36,451
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 ended 31 December 2022. 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 2022, with the ratio of CEO total remuneration to the
median employee, for example, decreasing from 46:1 to 44:1. This movement reflects a combination of a broadly flat CEO single
figure of remuneration and a c.6% increase to the equivalent employee figure.
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.
136
Tyman plcAnnual Report and Accounts 2022Governance Statement of implementation for the 2023 financial year
Details of the Directors’ remuneration for the 2023 financial year are set out in the table below:
Salary
•
•
Jo Hallas – £577,500 (2022: £550,000 – 5.0% increase)
Jason Ashton – £361,679 (2022: £344,500 – 5.0% increase)
Increases awarded to the Executive Directors are in line with the increase awarded to other
executives; and below the average increase awarded to the UK workforce (7.3% for 2023)
Pension allowance
7% of base salary
Benefits
Life assurance cover, critical illness cover, private medical and dental cover, car allowance (of
£17,500 per annum) and professional tax and financial advice.
Annual bonus
Maximum opportunities:
•
•
Jo Hallas: 150% of salary
Jason Ashton: 125% of base salary
Bonuses will be based entirely on financial measures, with 50% linked to adjusted profit before
tax, 30% linked to cash generation and 20% linked to inventory days. Consistent with prior years,
the precise bonus targets will be disclosed in detail in the 2023 Annual Report and Accounts
(these are considered currently to be commercially sensitive). Any bonus earned will be payable
50% in cash and 50% in shares deferred for three years.
LTIP
Award opportunities:
•
•
Jo Hallas: 150% of salary
Jason Ashton: 125% of base salary
LTIP awards comprise grants of nil-cost options, vesting three years after grant, subject to
performance over a 3-year period commencing 1 January 2023 against four measures as shown
below. For performance between Threshold and Stretch, the % vesting increases on a straight line
sliding scale. Vested LTIP awards have a two-year post-vesting holding period.
Measure
Weighting
Basis of measurement
Threshold
(25% vesting)
Stretch
(100% vesting)
Adjusted EPS1
ROCE2
Relative TSR
Sustainability
Scorecard
40%
25%
2025 adjusted EPS
3-year average 2023–25
40.7p
12.8%
50.1p
14.2%
20% Ranking vs constituents of
the FTSE 250 Index (xIT)
Median
Upper quartile
15%
- Safety
Four categories
2025 TRIR3
weighted equally
2025 TCO2e per £m
revenue4
4.5
49
3.5
36
- Sustainable
Operations
- Sustainable
Culture
- Sustainable
Solutions
Employee engagement
Qualitative6
% revenue
from sustainable
products in-use5
21.0%
24.0%
1 Adjusted EPS targets have been set taking into account a range of relevant internal and external reference
points. The target range of 40.7p to 50.1p reflects a compound annual growth rate of 4.5% to 12.0% to FY25,
in line with the range set for recent cycles.
2 Consistent with the change made last year, the ROCE measure is based on a 3-year average to FY25. The
reduction to the target range is considered by the Committee to appropriately reflect a challenging and
uncertain macroeconomic environment, and its overarching aim to set stretching but achievable targets for
participants. The maximum vesting requirement is set slightly above our medium-term target (see page 24).
3 Total Recordable Incident Rate. Aligns with Tyman’s stated ambition to achieve a TRIR of <3.0 by 2026.
4 Tonnes of carbon dioxide equivalents per £m revenue is a measure of operational carbon emissions. Aligns
with Tyman’s stated ambition to achieve a 50% reduction by 2026 (relative to a 2019 baseline).
5 Reflects the % of total revenues that meet the UN Sustainable Development Goals (SDGs) in use.
6 To be based on a qualitative assessment of improvement by the Workforce Engagement NED, taking into
account factors such as eNPS, ethics training and incidents, diversity and inclusion, and talent development.
137137
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Remuneration report continued
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 2023, the Chairman’s annual fee will be increased to £215,000 (a 4.9% increase, being broadly in
line with that awarded to executives; and below the average increase awarded to the UK workforce) to reflect his ongoing valued
contribution to the Group.
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 executives (but below the average increases
awarded to the wider UK workforce), the annual base fee payable to NEDs will be increased by 4.8% (to £54,500) for 2023. In
addition, to reflect the growing time commitment of the role, the additional annual fee payable to the SID will be increased to
£8,500. Fees payable to NEDs for other additional responsibilities remain unchanged from 2022, 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 Workforce Engagement Director
Annual fee
2023
£
Annual fee
2022
£
215,000
205,000
54,500
10,000
8,500
6,000
52,000
10,000
8,000
6,000
Intercontinental travel supplement for NEDs based outside of Europe
15,000
15,000
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 271,877 shares at a price of £1.66 to £1.77, vesting over a one or
three-year period, depending on jurisdiction. The total number of awards outstanding as at 31 December 2022 is 653,458.
• Deferred Share Bonus Plan: in the form of deferred share awards totalling 166,712 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 2022 is 271,455.
•
Tyman Long Term Incentive Plan: awards totalling 1,003,802 shares were made in the year. Awarded with performance
conditions, vesting over a three-year period, with a further two-year holding period for Executive Directors. The total number
of LTIP awards outstanding as at 31 December 2022 is 2,895,087.
The total number of shares outstanding under all share plans as at 31 December 2022 is 3,820,000.
Dilution
As at 31 December 2022, shares equivalent to 1.87% 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’s 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 10-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 123. 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.
138
Tyman plcAnnual Report and Accounts 2022Governance Statement of voting at Annual General Meetings
The table below sets out the results of the 2021 AGM in respect of the Remuneration policy and the 2022 AGM in respect of the
Annual Report on Directors’ remuneration, respectively:
Director
Remuneration policy
Annual report on Directors’ remuneration
Votes at
discretion
Votes
against
Total
number of
votes cast
0
(0%)
0
(0%)
16,362,020
(9.69%)
168,853,362
(100%)
889,207
(0.54%)
163,617,653
(100%)
Votes for
152,491,342
(90.31%)
162,728,446
(99.46%)
Total
number
of votes
withheld
6,895
5,194
The Committee is grateful to the Group’s shareholders for their support as shown in the voting levels at the 2021 and 2022
AGMs and looks forward to receiving their continued support in 2023.
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
2 March 2023
139139
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcGovernance Independent auditors’ report to the members of Tyman plc
Report on the audit of the
financial statements
1. Opinion
In our opinion:
•
•
•
•
the financial statements of Tyman plc (the ‘parent
company’) and its subsidiaries (the ‘group’) give a true
and fair view of the state of the group’s and of the parent
company’s affairs as at 31 December 2022 and of the
group’s profit for the year then ended;
the group financial statements have been properly
prepared in accordance with United Kingdom adopted
international accounting standards;
the parent company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice, including
Financial Reporting Standard 101 “Reduced Disclosure
Framework”; and
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements which comprise:
•
•
•
•
the consolidated income statement;
the consolidated statement of comprehensive income;
the consolidated and parent company balance sheets;
the consolidated and parent company statements of
changes in equity;
•
•
the consolidated cash flow statement; and
the consolidated notes 1 to 30 and parent company notes
1 to 13, including the associated accounting policies.
The financial reporting framework that has been applied in
the preparation of the group financial statements is applicable
law, and United Kingdom adopted international accounting
standards. The financial reporting framework that has been
applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the group and the parent company in
accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. The non-audit services provided to the group
and parent company for the year are disclosed in note 4 to the
financial statements. We confirm that we have not provided
any non-audit services prohibited by the FRC’s Ethical Standard
to the group or the parent company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matter
The key audit matter that we identified in the current year was:
• Revenue recognition
Four key audit matters identified by the previous auditor and described in their report for the year ended
31 December 2022 are not included in our report for the year ended 31 December 2022. These were:
• Goodwill and intangible assets impairment assessment, given the level of headroom and the increase
in carrying value of the underlying assets.
•
Inventory valuation, as the nature of the group’s inventory is not complex, and any adjustments
applied to inventory costing and provisioning follow the group policy and are mechanical in nature.
• Present value of defined benefit obligations, as the material scheme in the North America division is
closed to future participants and is fully funded ahead of an anticipated termination of the scheme
in FY23.
• Recoverable amount of investments in subsidiaries and affiliates, given the level of headroom and the
increase in carrying value of the underlying assets.
The materiality that we used for the group financial statements was £4,000,000 which was determined on
the basis of profit before tax, adjusted for amortisation of acquired intangibles and adjusting items.
Fifteen components were subject to audit procedures. Of these, ten were subject to a full-scope audit. The
remaining five components were subject to an audit of specified account balances.
The components, which were subject to a full-scope audit or audit of specified account balances, in
addition to work performed at a group level, contribute 85% of revenue and 82% of adjusted profit
before tax.
Materiality
Scoping
140
Tyman plcAnnual Report and Accounts 2022Financials 4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s
and parent company’s ability to continue to adopt the going
concern basis of accounting included:
•
•
•
evaluating the financing facilities available to the group
including the nature of facilities, repayment terms and
covenants;
challenging the assumptions used in the forecasts by
reference to historical performance, trading run rate,
current macroeconomic indicators, one-off cash items and
other supporting evidence;
recalculation and assessment of the amount of cash and
covenant headroom in the forecasts; and
• performing a sensitivity analysis to consider specific
scenarios, including a reverse stress test based on a
reduction in revenue and associated margin.
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 parent company’s ability to continue as
5.1 Revenue recognition
a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the
UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement
in the financial statements about whether the directors
considered it appropriate to 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.
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our 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) that we identified. These
matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matter
description
The group recognised revenue of £715.5 million (2021: £635.7 million) solely through the sale of goods to
customers accounted for under IFRS 15. At the year end, manual adjustments are made by management
for sales in transit where control has yet to pass to the customer. In addition, volume rebate discounts
are provided to customers and these are calculated as a percentage of revenue recognised in the relevant
period and the percentage applied may vary depending on the total value of revenue in that period.
These rebates are typically paid or settled once a year and therefore manual adjustments are made to
accrue for these through the year.
How the scope
of our audit
responded to the
key audit matter
We have identified a key audit matter relating to a risk of material misstatement, whether due to fraud
or error, in relation to the cut-off of revenue and the valuation of the rebate accruals for amounts to be
settled with customers.
Note 2.7 to the Consolidated Financial Statements sets out the group’s accounting policy for revenue
recognition, and note 3 includes details of the group’s revenue by segment and timing of revenue
recognition.
In response to the identified key audit matter we have performed the following procedures:
• Obtained an understanding of the controls over the revenue recognition process specifically in
relation to cut-off adjustments and rebate accruals.
•
•
Traced a sample of shipments made pre-year end to third party supporting evidence to assess
whether the performance obligations have been met and therefore whether revenue should be
recognised.
Selected a sample of customer rebate agreements, inspected the terms and dates, and recalculated
the selected rebates in accordance with the contract terms, including evaluating the sales data on
which the rebate calculations are based. We have then recalculated the accrual recognised. We
have also performed procedures to confirm the completeness of the rebate accruals which included
reviewing large customer contracts to determine whether there were rebate agreements for which
accruals should have been made, testing a sample of credit notes raised post-year end and made
enquiries of management as to the existence of any other rebate arrangements.
Key observations
From the work performed we are satisfied that there are no material errors relating to revenue
recognition.
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continued
6. Our application of materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent company financial statements
Materiality
£4,000,000 (2021: £4,000,000)
£2,000,000 (2021: £3,300,000)
Basis for
determining
materiality
Rationale for
the benchmark
applied
4.7% of adjusted profit before tax
Adjusted profit before tax represents profit
before tax, adjusted for amortisation of acquired
intangibles and adjusting items.
In 2021 the previous auditor set materiality at
4.5% of adjusted operating profit.
Adjusted profit before tax is a key performance
measure for management, investors and the
analyst community. This metric is important to
the users of the financial statements because it
portrays the performance of the business and
hence its ability to pay a return on investment to
the investors.
Refer to the Appendix to the Consolidated
Financial Statements for the group’s definition and
calculation of alternative performance measures.
Parent company materiality equates to 2% of net
assets, which is capped at 50% of group materiality.
In 2021 the previous auditor set materiality at 1%
of total assets (capped as a proportion of group
overall materiality).
We consider net assets to be the most appropriate
benchmark as the parent company is a non-trading
entity, whose primary function within the Tyman
group is to act as a holding company.
6.2 Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements
Parent company financial statements
Performance
materiality
70% of group materiality (2021: 75% of group
materiality as determined by the previous auditor)
70% of parent company materiality (2021: 75% of
parent company materiality as determined by the
previous auditor)
Basis and
rationale for
determining
performance
materiality
In determining performance materiality, we considered the following factors:
•
the current financial year being Deloitte LLP’s first year auditing the group and parent financial
statements;
• our risk assessment, including our assessment of the group’s overall control environment;
•
•
the disaggregated nature of the group; and
the nature, volume and size of uncorrected misstatements arising in the previous audit.
6.3 Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £200,000 (2021:
£200,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also
report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial
statements.
142
Tyman plcAnnual Report and Accounts 2022Financials 7. An overview of the scope of our audit
7.1 Identification and scoping of components
Our group audit was scoped by obtaining an understanding
of the group and its environment, including group-wide
controls, and assessing the risks of material misstatement at
the group level. Based on that assessment, we focused our
group audit scope primarily on the audit work at fifteen (2021:
nineteen) components, which includes the parent company as
one component. Ten (2021: ten) of these were subject to a full
audit, whilst the remaining five components (2021: nine) were
subject to audit of specified account balances.
These components, in additional to work performed at
a group-level, represent the principal business units and
account for 85% (2021: 81%) of the group’s revenue and
82% the group’s adjusted profit before tax (2021: 79% of the
group’s operating profit). They were also selected to provide
an appropriate basis for undertaking audit work to address
the risks of material misstatement identified above. Our audit
work at the components was executed at levels of materiality
applicable to each individual entity which were lower than
group materiality; component materiality was set at £2.0m for
all components (2021: ranged from £0.2m to £3.5m).
At the group level, we also tested the consolidation process
and carried out analytical procedures to confirm our
conclusion that there were no significant risks of material
misstatement of the aggregated financial information of
the remaining components not subject to audit or audit of
specified account balances.
7.2 Our consideration of the control environment
The group currently operates a range of IT systems which
underpin the financial reporting processes, and which vary by
geography and/or component.
As outlined in the Internal control section of the annual report
(page 112), significant investment has taken place in 2022
in relation to both the IT and financial reporting processes,
including the roll out of a new cloud-based operating system,
which commenced in the North American division in 2022.
For certain components subject to full scope audits we
identified relevant IT systems for the purpose of our audit
work. These were typically the principal Enterprise Resource
Planning (ERP) systems that govern the general ledger and
transaction accounting balances and also included the group’s
consolidation system. Our approach was principally designed
to inform our risk assessment and, as such, we obtained an
understanding of relevant IT controls and tested the general
IT controls for some components using IT audit specialists.
For all components we have gained an understanding of
relevant controls relating to financial reporting, areas of
significant risk and significant accounting estimates.
Given the disaggregated nature of the group, and certain
control deficiencies identified, we adopted a substantive audit
approach. Where control deficiencies and improvements are
identified, these are reported to management and the Audit
Committee as appropriate. The group continues to invest
time in responding to, and addressing, our observations.
Management determines their response to these
observations and continues to monitor their resolution with
reporting to and oversight from the Audit Committee.
7.3 Consideration of climate-related risks
The group has assessed the risks and opportunities
associated with various future climate-related scenarios and
its own commitment to transition to an operating model that
has a reduced level of GHG emissions. While management
has acknowledged that the transition and physical risks
posed by climate change have the potential to impact the
medium to long term success of the business, they have
assessed that there is no material impact arising from climate
change on the judgements and estimates made in the
financial statements as at 31 December 2022. We also read, in
conjunction with our specialists, the climate-related narrative
in the Sustainability Report to consider whether it is materially
consistent with the financial statements and our knowledge
obtained in the audit.
As a part of our audit procedures, we have obtained
management’s climate-related risk assessment and
held discussions with those charged with governance to
understand the process of identifying climate-related risks,
the determination of mitigating actions and the impact
on the group’s financial statements. We performed our
own qualitative risk assessment of the potential impact of
climate change on the group’s account balances and classes
of transaction, and did not identify any additional risks of
material misstatement.
7.4 Working with other auditors
The group audit was conducted exclusively by a global
network of Deloitte member firms under the direction and
supervision of the UK group audit team.
Our oversight of component auditors focussed on the
planning of their audit work and understanding of their risk
assessment process to identify key areas of estimates and
judgements, as well as the execution of their audit work.
We sent our component teams detailed instructions, reviewed
and challenged the related component inter-office reporting
and findings from their work, reviewed relevant documents
in underlying audit files, attended component audit closing
conference calls and held regular remote communication
to interact on any related audit and accounting matters
which arose.
Dedicated members of the group audit team were assigned
to each component to facilitate an effective and consistent
approach to component oversight.
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continued
8. Other information
The other information comprises the information included
in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible for
the other information contained within the annual report.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent
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 parent company or to
cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (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.
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 auditor’s report.
11. Extent to which the audit was considered
capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
11.1 Identifying and assessing potential risks related to
irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
•
•
•
•
the nature of the industry and sector, control environment
and business performance including the design of the
group’s remuneration policies, key drivers for directors’
remuneration, bonus levels and performance targets;
results of our enquiries of management, internal audit,
and the Audit Committee about their own identification
and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed
the group’s documentation of their policies and
procedures relating to:
•
identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance;
• detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
•
the internal controls established to mitigate risks of
fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement
team, including significant component audit teams, and
relevant internal specialists, including tax, valuation,
pension and IT specialists regarding how and where fraud
might occur in the financial statements and any potential
indicators of fraud.
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential
for fraud related to revenue recognition. In common with
all audits under ISAs (UK), we are also required to perform
specific procedures to respond to the risk of management
override.
144
Tyman plcAnnual Report and Accounts 2022Financials We also obtained an understanding of the legal and
regulatory framework that the group operates in, focusing
on provisions of those laws and regulations that had a
direct effect on the determination of material amounts
and disclosures in the financial statements. The key laws
and regulations we considered in this context included the
UK Companies Act, Listing Rules, pension legislation, tax
legislation.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental
to the group’s ability to operate or to avoid a material penalty.
These included the group’s compliance with environmental,
health and safety, and anti-bribery and corruption legislation;
as well as considering the group’s monitoring of changes in
legislation including sanctions.
11.2 Audit response to risks identified
As a result of performing the above, we identified revenue
recognition as a key audit matter related to the potential risk
of fraud.
In addition to the above, our procedures to respond to risks
identified included the following:
•
•
reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
enquiring of management, the Audit Committee and
in-house legal counsel concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud;
•
•
reading minutes of meetings of those charged with
governance, reviewing internal audit reports and
reviewing correspondence with tax authorities; and
in addressing the risk of fraud through management
override of controls, testing the appropriateness of
journal entries and other adjustments; assessing whether
the judgements made in making accounting estimates are
indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual
or outside the normal course of business.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members including internal specialists and remained alert
to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and
regulatory requirements
12. Opinions on other matters prescribed by
the Companies Act 2006
In our opinion the part of the directors’ remuneration report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
•
•
the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the group
and the parent company and their environment obtained in
the course of the audit, we have not identified any material
misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement
in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the
group’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with
the financial statements and our knowledge obtained during
the audit:
•
•
•
•
•
•
the directors’ statement with regards to the
appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set
out on page 86;
the directors’ explanation as to its assessment of the
group’s prospects, the period this assessment covers and
why the period is appropriate set out on pages 84 to 86;
the directors’ statement on fair, balanced and
understandable set out on page 112;
the board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 112;
the section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 112; and
the section describing the work of the Audit Committee
set out on pages 108 to 114.
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continued
16. Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have
formed.
As required by the Financial Conduct Authority (FCA)
Disclosure Guidance and Transparency Rule (DTR) 4.1.14R,
these financial statements form part of the European Single
Electronic Format (ESEF) prepared Annual Financial Report
filed on the National Storage Mechanism of the UK FCA in
accordance with the ESEF Regulatory Technical Standard
(ESEF RTS). This auditor’s report provides no assurance over
whether the annual financial report has been prepared using
the single electronic format specified in the ESEF RTS.
James Hunter, FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
2 March 2023
14. Matters on which we are required to report
by exception
14.1 Adequacy of explanations received and accounting
records
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• we have not received all the information and explanations
we require for our audit; or
•
•
adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company financial statements are not in
agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2 Directors’ remuneration
Under the Companies Act 2006 we are also required to report
if in our opinion certain disclosures of directors’ remuneration
have not been made or the part of the directors’
remuneration report to be audited is not in agreement with
the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required
to address
15.1 Auditor tenure
Following the recommendation of the Audit Committee,
we were appointed by shareholders at its annual general
meeting on 19 May 2022 to audit the financial statements for
the year ending 31 December 2022 and subsequent financial
periods. The period of total uninterrupted engagement
including previous renewals and reappointments of the firm is
accordingly one year.
15.2 Consistency of the audit report with the additional report
to the Audit Committee
Our audit opinion is consistent with the additional report to
the Audit Committee we are required to provide in accordance
with ISAs (UK).
146
Tyman plcAnnual Report and Accounts 2022Financials Consolidated income statement
For the year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Net impairment losses on financial assets
Operating profit
Analysed as:
Adjusted1 operating profit
Adjusting items
Amortisation 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 adjusted1 earnings per share
Diluted adjusted1 earnings per share
Note
3
3
4
3
6
10
7
7
7
3
8
9
9
9
9
9
2022
£’m
715.5
(493.2)
222.3
(151.2)
(0.4)
70.7
94.6
(6.3)
(17.6)
70.7
1.0
(10.3)
(9.3)
61.4
(13.6)
47.8
24.6p
24.5p
94.6
85.8
34.7p
34.5p
2021
£’m
635.7
(424.0)
211.7
(138.5)
(0.1)
73.1
90.0
0.6
(17.5)
73.1
–
(9.1)
(9.1)
64.0
(14.4)
49.6
25.4p
25.3p
90.0
81.5
32.1p
32.0p
1 Before amortisation of acquired intangible assets, deferred taxation on amortisation of acquired intangible assets, impairment of goodwill,
adjusting 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 208 to 215 for non-GAAP Alternative Performance
Measures.
The notes on pages 152 to 200 are an integral part of these consolidated financial statements.
147147
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Consolidated statement of comprehensive income
For the year ended 31 December 2022
Profit for the year
Other comprehensive income
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 operations1
Change in fair value of net investment hedge1
Effective portion of changes in value of fair value hedges
Total items that may be reclassified to profit or loss
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Note
21
17
17
2022
£’m
47.8
–
–
54.1
(11.7)
0.2
42.6
42.6
90.4
2021
£’m
49.6
1.6
1.6
0.1
2.3
–
2.4
4.0
53.6
1 Comparatives have been represented to show separately the change in fair value of net investment hedge for consistency with current year
presentation.
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 152 to 200 are an integral part of these consolidated financial statements.
148
Tyman plcAnnual Report and Accounts 2022Financials
Consolidated statement of changes in equity
For the year ended 31 December 2022
At 1 January 2021
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their
capacity as owners
Share-based payments1
Dividends paid
Issue of own shares from Employee
Benefit Trust
Purchase of own shares for Employee
Benefit Trust
Total transactions with owners
At 31 December 2021
Profit for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their
capacity as owners
Share-based payments1
Dividends paid
Issue of own shares from Employee
Benefit Trust
Purchase of own shares for Employee
Benefit Trust
Total transactions with owners
–
–
–
–
–
–
–
–
9.8
–
–
–
–
–
–
–
–
Share
capital
£’m
9.8
Treasury
reserve
£’m
(3.4)
Hedging
reserve
£’m
Translation
reserve
£’m
Retained
earnings
£’m
–
–
–
–
–
–
–
–
–
–
–
0.2
0.2
–
–
–
–
–
46.8
–
2.4
2.4
–
–
–
–
–
49.2
–
42.4
42.4
–
–
–
–
–
0.2
91.6
389.9
49.6
1.6
51.2
1.6
(15.6)
(1.1)
–
(15.1)
426.0
47.8
–
47.8
0.8
(25.4)
(0.5)
–
(25.1)
448.7
Total
equity
£’m
443.1
49.6
4.0
53.6
1.6
(15.6)
–
(0.3)
(14.3)
482.4
47.8
42.6
90.4
0.8
(25.4)
–
(6.6)
(31.2)
541.6
–
–
–
–
–
1.1
(0.3)
0.8
(2.6)
–
–
–
–
–
0.5
(6.6)
(6.1)
(8.7)
At 31 December 2022
9.8
1 Share-based payments include a tax charge of £0.2 million (2021: tax credit of £0.3 million) and a credit due to issuance of shares under the
deferred share bonus plan of £0.2 million (2021: £0.3 million). See note 23.
The notes on pages 152 to 200 are an integral part of these consolidated financial statements.
149149
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Consolidated balance sheet
For the year ended 31 December 2022
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
Derivative financial instruments
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
2022
£’m
2021
Restated1
£’m
2020
Restated1
£’m
Note
10
10
11
12
14
17
8
13
14
15
16
17
18
12
20
18
12
8
21
20
16
22
17
399.3
363.3
361.9
57.7
74.6
57.3
1.2
0.2
1.7
66.8
63.5
52.0
1.1
–
4.2
84.1
60.7
51.8
1.1
–
5.2
592.0
550.9
564.8
153.1
81.4
74.6
309.1
901.1
(88.2)
(0.2)
(15.9)
(6.8)
(1.8)
(5.0)
137.8
81.0
77.0
295.8
846.7
(112.8)
(0.3)
(19.0)
(6.0)
(6.0)
(1.4)
84.0
72.8
73.2
230.0
794.8
(84.4)
(0.2)
(43.8)
(5.4)
(6.8)
(1.3)
(117.9)
(145.5)
(141.9)
(172.5)
(54.9)
(6.9)
(4.3)
(2.9)
(0.1)
(241.6)
(359.5)
541.6
9.8
(8.7)
0.2
91.6
448.7
541.6
(149.0)
(48.8)
(12.1)
(4.0)
(4.8)
(0.1)
(218.8)
(364.3)
482.4
9.8
(2.6)
–
49.2
426.0
482.4
(128.8)
(48.4)
(15.7)
(8.9)
(7.6)
(0.4)
(209.8)
(351.7)
443.1
9.8
(3.4)
–
46.8
389.9
443.1
1 See note 2.4 for details regarding reclassification adjustments to the comparative balance sheets.
The notes on pages 152 to 200 are an integral part of these consolidated financial statements.
The financial statements on pages 147 to 151 were approved by the Board on 1 March 2023 and signed on its behalf by:
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Tyman plc
Company registration number: 02806007
150
Tyman plcAnnual Report and Accounts 2022Financials
Consolidated cash flow statement
For the year ended 31 December 2022
Cash flow from operating activities
Profit before taxation
Adjustments
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Provisions utilised
Pension contributions
Income tax paid
Net cash generated from operating activities
Cash flow from investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds on disposal of property, plant and equipment
Interest received
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 borrowings
Repayments of borrowings
Principal element of lease payments
Net cash used in financing activities
Note
3
25
11
10
24
Net decrease in cash and cash equivalents and bank overdrafts
Exchange gain/(loss) on cash and cash equivalents and bank overdrafts
Cash and cash equivalents and bank overdrafts at beginning of year
Cash and cash equivalents and bank overdrafts at end of year
15
The notes on pages 152 to 200 are an integral part of these consolidated financial statements.
2022
£’m
61.4
53.0
(4.8)
5.6
(32.2)
(0.7)
(0.2)
(21.5)
60.6
(19.2)
(4.9)
0.1
0.9
2021
£’m
64.0
47.4
(54.0)
(9.1)
29.2
–
(2.8)
(17.7)
57.0
(16.1)
(4.5)
0.8
–
(23.1)
(19.8)
(9.5)
(25.4)
(6.6)
(2.1)
122.3
(113.0)
(6.2)
(40.5)
(3.0)
3.1
58.1
58.2
(8.8)
(15.6)
(0.3)
–
40.0
(57.8)
(6.2)
(48.7)
(11.5)
(0.1)
69.7
58.1
151151
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Notes to the financial statements
For the year ended 31 December 2022
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 3,700 people with facilities in 16 countries worldwide.
Tyman plc is a public limited company listed on the London Stock Exchange, incorporated and domiciled in the United Kingdom.
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 have been prepared on a historical cost basis except for items that are required by
International Financial Reporting Standards (IFRS) to be measured at fair value, principally certain financial instruments. The
consolidated financial statements have been prepared in accordance with IFRS which includes the standards and interpretations
issued by the International Accounting Standards Board (IASB) that have been adopted by the United Kingdom (UK) as well as
the Companies Act 2006.
These consolidated financial statements are presented in millions of sterling rounded to the nearest one decimal place.
2.2 Going concern
The Group’s business activities, financial performance and position, together with factors likely to affect its future development
and performance, are described in the Chief Executive Officer’s review on pages 26 to 28. Changes to principal risks and
uncertainties are described on pages 45 to 49.
As at 31 December 2022, the Group had net cash and cash equivalents of £58.2 million, and an undrawn RCF available of £125.8
million, giving liquidity headroom of £184.0 million. The Group also has potential access to an uncommitted accordion facility of
£100 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 2022, with £69.7 million (65%) of EBITDA headroom on the leverage covenant and £83.3 million
(78%) of EBITDA headroom on the interest cover covenant.
The Group has performed an assessment of going concern through reviewing liquidity headroom and covenant compliance
under the Board approved financial forecasts and modelling several downside scenarios, as outlined in the viability statement
on pages 84 to 86. 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 that would result in elimination of covenant headroom
within the going concern assessment period. Revenue would need to decrease significantly, to an extent not considered
reasonably possible, for the covenants to be breached. As part of this assessment, the Group has considered the risks relating to
climate change. As this risk relates to the medium to long term, there is no impact on the short-term going concern assessment.
Having reviewed the various scenario models, available liquidity and taking into account current trading, the Directors
are satisfied that the Group has sufficient financial resources to continue in operation for the foreseeable future, which is
considered to be a period of not less than twelve months from the date of this report. Accordingly, the consolidated and
Company financial information has been prepared on a going concern basis.
The Group’s viability statement is set out on pages 84 to 86 of the Annual Report and Accounts.
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.
There are no areas representing critical judgements made by management and no key sources of estimation uncertainty in the
Group’s financial statements.
152
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials 2.4 Changes in accounting policies and disclosures
2.4.1 New, revised and amended standards and interpretations adopted by the Group
The accounting standards and interpretations that became applicable in the year did not materially impact the Group’s
accounting policies and did not require retrospective adjustments.
Newly mandatorily effective in the current period
Title
Subject
Effective date per UKEB
Amendment to IFRS 16
Covid-19-related rent concessions beyond 30 June 2021
1 April 2021
Amendments to IAS 16
Property, plant and equipment – proceeds before intended use
1 Jan 2022
Annual Improvements to IFRS
Standards 2018–2020 (May 2020)
Annual improvements to IFRS Standards 2018–2020 (May 2020)
1 Jan 2022
Amendments to IFRS 3 (May 2020) Reference to the Conceptual Framework
Amendments to IAS 37 (May 2020) Onerous contracts – cost of fulfilling a contract
1 Jan 2022
1 Jan 2022
2.4.2 New, revised and amended accounting standards not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are
not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Group. These standards,
amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting
periods and on foreseeable future transactions. These standards, amendments or interpretations are listed below:
Not yet mandatorily effective
Title
IFRS 17
Subject
Insurance contracts
Amendments to IFRS 17
IFRS 17
Effective date per UKEB
1 Jan 2023
1 Jan 2023
Amendments to IAS 1
Classification of liabilities as current or non-current
TBC – Per IASB 1 Jan 2023
Amendments to IAS 1
Classification of liabilities as current or non-current – deferral of
Effective Date
TBC – Per IASB 1 Jan 2023
Amendments to IFRS 4
Extension of the temporary exemption from applying IFRS 9
1 Jan 2023
Amendments to IAS 1 and IFRS
Practice Statement 2
Amendments to IAS 12
Disclosure of accounting policies
TBC – Per IASB 1 Jan 2023
Deferred tax related to assets and liabilities arising from a single
transaction
TBC – Per IASB 1 Jan 2023
Amendments to IAS 8
Definition of accounting estimates
TBC - Per IASB 1 Jan 2023
Amendments to IFRS 17
Initial application of IFRS 17 and IFRS 9 – comparative
information
1 Jan 2023
Amendment to IFRS 16
Lease liability in a sale and leaseback
Amendments to IAS 1
Non-current liabilities with covenants
TBC – Per IASB 1 Jan 2024
TBC – Per IASB 1 Jan 2024
2.4.3 Prior year restatement
In September 2022, the Group received a letter from the Financial Reporting Council (FRC) as part of its regular review and
assessment of the quality of corporate reporting in the UK. The letter included a request for further information on the Group’s
Annual Report and Accounts for the year ended 31 December 2021. Following completion of the correspondence with the FRC,
the Group undertook to restate the classification in two areas of the 2021 comparative balance sheets. As these reclassifications
affected the information presented in the balance sheet as at the beginning of the earliest comparative period, a third balance
sheet as at 31 December 2020 has been presented.
The review conducted by the FRC was performed solely on the Group’s published 2021 Annual Report and Accounts and does
not provide any assurance that the Annual Report and Accounts are correct in all material respects. The FRC’s review did not
benefit from detailed knowledge of the Company’s business or an understanding of the underlying transactions entered into.
The FRC accepts no liability for reliance on their review by the Company or any third party.
153153
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials 2. Accounting policies and basis of preparation continued
i. Offsetting of deferred tax assets and liabilities
The Group previously presented deferred tax assets and liabilities gross on the balance sheet. Certain of these assets and
liabilities arose in the same tax jurisdiction and met the criteria for offset in IAS 12. These balances have therefore been restated
to offset those that met the criteria. The effect of this was to reduce deferred tax assets and deferred tax liabilities as at 31
December 2021 by £8.4 million (31 December 2020: £11.1 million).
ii. Offsetting of bank overdrafts
The Group has cash pooling arrangements that were previously recorded as part of cash and cash equivalents, with the
overdraft being disclosed in the notes to the financial statements. The Directors have concluded that the second criterion of IAS
32 paragraph 42 was not met. Consequently, a restatement has been made with the effect that cash and cash equivalents and
current borrowings as at 31 December 2021 increased by £18.9 million (31 December 2020: £3.5 million).
These restatements did not affect the Group’s income statement, net assets, cash flows, KPIs or compliance with covenants.
The previously reported and restated financial statement line items are summarised as follows:
31 December 2021
Cash and cash equivalents
Deferred tax asset
Borrowings- current
Deferred tax liability
Net assets
Total assets
Total liabilities
31 December 2020
Cash and cash equivalents
Deferred tax asset
Borrowings- current
Deferred tax liability
Net assets
Total assets
Total liabilities
2.5 Consolidation
As previously
reported
£m
Impact of
restatement
£m
Restated
£m
58.1
12.6
(0.1)
(20.5)
482.4
836.2
(353.8)
18.9
(8.4)
(18.9)
8.4
–
10.5
(10.5)
77.0
4.2
(19.0)
(12.1)
482.4
846.7
(364.3)
As previously
reported
£m
Impact of
restatement
£m
Restated
£m
69.7
16.3
(40.3)
(26.8)
443.1
802.4
(359.3)
3.5
(11.1)
(3.5)
11.1
–
(7.6)
7.6
73.2
5.2
(43.8)
(15.7)
443.1
794.8
(351.7)
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.
154
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials 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 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.
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.
2.7 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 selling, general and 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 expected returns using the expected value
method.
Volume rebates are estimated with reference to customer agreements, which typically have tiered volume thresholds based on
the level of sales expected to be achieved over the period of the agreement using the expected value method. Early settlement
discounts are known shortly after the sale and can therefore be reliably estimated. 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 twelve months.
155155
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials 3. Segment reporting
3.1 Accounting policy
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 that
are managed by the Tyman International leadership team). 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.
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.
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.
3.2.1 Revenue by division
2022
Inter-
segment
revenue
£’m
(3.0)
(0.2)
(3.1)
(6.3)
Segment
revenue
£’m
474.9
103.5
143.4
721.8
External
revenue
£’m
Segment
revenue
£’m
471.9
103.3
140.3
715.5
400.5
106.2
135.2
641.9
2021
Inter-
segment
revenue
£’m
(2.8)
(0.4)
(3.0)
(6.2)
North America
UK & Ireland
International
Total revenue
Included within the Tyman International segment is revenue generated in the UK of £24.7 million (2021: £22.3 million).
There are no single customers that account for greater than 10% of total revenue.
External
revenue
£’m
397.7
105.8
132.2
635.7
2021
£’m
468.2
105.2
61.1
1.2
2022
£’m
512.4
126.3
74.7
2.1
715.5
635.7
3.2.2 Revenue by product line
Window and door hardware
Seals and extrusions
Commercial access solutions
Other products
Total revenue from products
156
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
3.2.3 Profit before taxation
North America
UK & Ireland
International
Operating segment profit
Centrally incurred costs
Adjusted operating profit
Adjusting items
Amortisation of acquired intangible assets
Operating profit
Net finance costs
Profit before taxation
3.2.4 Operating profit disclosures
North America
UK & Ireland
International
Unallocated
Total
3.2.5 Segment assets and liabilities
North America
UK & Ireland
International
Unallocated
Total
Note
6
10
7
2022
£’m
66.8
14.5
21.3
102.6
(8.0)
94.6
(6.3)
(17.6)
70.7
(9.3)
61.4
Cost of sales
Depreciation
Amortisation
2022
£’m
2021
£’m
(345.5)
(280.0)
(65.3)
(82.4)
–
(67.5)
(76.5)
–
2022
£’m
(12.6)
(1.9)
(4.8)
(0.2)
2021
£’m
(11.8)
(2.0)
(4.5)
(0.2)
2022
£’m
(13.7)
(2.8)
(3.1)
–
2021
£’m
65.1
14.8
19.5
99.4
(9.4)
90.0
0.6
(17.5)
73.1
(9.1)
64.0
2021
£’m
(12.3)
(3.2)
(3.1)
(0.2)
(493.2)
(424.0)
(19.5)
(18.5)
(19.6)
(18.8)
Segment assets
Segment liabilities1
Non-current assets
2022
£’m
598.3
131.3
160.6
10.9
901.1
2021
Restated2
£’m
533.2
140.7
157.3
15.5
846.7
2022
£’m
2021
Restated2
£’m
(114.4)
(124.7)
(32.8)
(45.5)
(166.8)
(359.5)
(38.9)
(56.2)
(144.5)
(364.3)
2022
£’m
421.6
86.5
83.6
0.3
2021
Restated2
£’m
384.5
82.4
83.5
0.5
592.0
550.9
1
Included within unallocated segment liabilities are centrally held borrowings of £163.0 million (2021: £140.8 million), provisions of £Nil (2021:
£0.7 million) and other liabilities of £3.8 million (2021: £3.0 million). Where borrowings can be directly attributed to segments, these have been
allocated.
2 See note 2.4 for details regarding reclassification adjustments to the comparative balance sheets.
Non-current assets of the International segment include £12.4 million (2021: £17.6 million) attributable to the UK.
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3. Segment reporting continued
3.2.6 Capital expenditure
North America
UK & Ireland
International
Total
3.2.7 Other disclosures
North America
UK & Ireland
International
Total
Property, plant and equipment
Intangible assets
2022
£’m
9.7
4.2
5.3
19.2
2021
£’m
8.5
0.5
7.0
16.0
2022
£’m
4.1
0.2
0.6
4.9
2021
£’m
4.0
0.3
0.2
4.5
Goodwill
Intangible assets
Retirement benefit obligations
2022
£’m
302.7
60.2
36.4
399.3
2021
£’m
268.5
60.2
34.6
363.3
2022
£’m
38.9
2.2
16.6
57.7
2021
£’m
43.6
4.7
18.5
66.8
Note
11
12
10
10
10
10
2022
£’m
(1.3)
–
(3.0)
(4.3)
2022
£’m
(12.4)
(7.1)
(17.6)
(2.0)
(0.1)
(5.1)
(0.7)
(0.1)
2021
£’m
(0.8)
–
(3.2)
(4.0)
2021
£’m
(11.5)
(7.0)
(17.5)
(1.3)
(1.9)
(4.8)
(1.0)
(0.2)
5
(158.6)
(152.7)
2022
£’m
(0.3)
(0.8)
(1.1)
(0.1)
(1.2)
(1.1)
(0.1)
(1.2)
2021
£’m
(0.3)
(0.7)
(1.0)
(0.1)
(1.1)
(1.0)
(0.1)
(1.1)
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
Amortisation of other intangible assets
Impairment of other intangible assets
Research and development costs
Foreign exchange loss
Loss on disposal of property, plant and equipment
Employee costs
Analysis of auditor’s 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
Audit-related assurance services were in respect of the interim review and were £64,000 (2021: £52,200).
158
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
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 twelve months after the end of the reporting period
are discounted to their present value.
5.1.3 Bonus plans
The Group recognises a liability and an expense for bonuses 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 as at 31 December 2022 was:
Average
As at 31 December
Administration
Operations
Sales
The analysis above includes Directors.
5.3 Employment costs
2022
693
3,146
296
4,135
2021
405
3,554
336
4,295
Employment costs of employees, including Directors’ remuneration, during the year were as follows:
Wages and salaries
Social security costs
Share-based payments – equity settled
Share-based payments – cash settled
Pension costs – defined contribution schemes
Pension costs – defined benefit schemes
Note
23
23
21
21
Details of Directors’ remuneration are set out in the Remuneration report on pages 115 to 139.
2022
692
2,742
283
3,717
2022
£’m
(141.2)
(12.1)
(0.8)
(0.2)
(4.0)
(0.3)
2021
418
3,404
337
4,159
2021
£’m
(136.4)
(11.2)
(1.0)
–
(3.8)
(0.3)
(158.6)
(152.7)
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6. Adjusting items
6.1 Accounting policy
The Group excludes from adjusted performance metrics certain items that are considered to be significant in nature and/
or quantum and where treatment as an adjusted item provides stakeholders with additional useful information to assess the
trading performance of the Group compared to prior periods. Under the Group’s policy, such items include costs of major
redundancy and restructuring programmes, transaction and integration costs associated with merger and acquisition activity,
significant impairment charges, gains or losses on the disposal of businesses and releases of provisions associated with
acquisitions that had initially been recognised as part of a purchase price allocation.
These adjusted performance metrics are used by management internally to monitor performance of the business, and the
Group aims to be both consistent and clear in its recognition and disclosure of adjusting items. Management judgement is
required in assessing the nature and amounts of transactions that satisfy the conditions for classification as an adjusted item.
See APMs section on pages 208 to 215.
6.2 Adjusting items
Footprint restructuring – costs
Footprint restructuring – credits
Footprint restructuring – net
M&A and integration – credits
M&A and integration – net
Impairment charges
Impairment credits
Impairment – net
2022
£’m
(6.3)
–
(6.3)
–
–
–
–
–
(6.3)
2021
£’m
–
0.3
0.3
0.6
0.6
(1.9)
1.6
(0.3)
0.6
The footprint restructuring costs in 2022 relate to the closure of the Hamburg facility and the consolidation of the three UK
Access solutions businesses into a single site. These are considered major restructuring programmes, which required Board
approval and are therefore, drawn out separately as adjusting items. The costs include severance, onerous contracts, winding
up costs, and certain costs of preparing and running new facilities that are not yet operational. These projects are expected to
be substantially completed in the first half of 2023. The cash costs incurred in respect of these programmes in the year was £1.8
million, with the remainder expected to be settled during 2023.
The M&A credit in the prior year related to the release of provisions made as part of the business combination accounting for
previous acquisitions, which are no longer required. The impairment charge in the prior year related to impairment of certain of
the Group’s intangible assets following the commencement of a multi-year ERP upgrade. The impairment credit related to the
release of a portion of provisions made in 2019 against inventory and other assets associated with the new door seals product in
North America, which was no longer required.
160
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
7. Finance income and costs
Finance income
Interest income from short-term bank deposits
Gain on revaluation of derivative instruments
Finance costs
Interest payable on bank loans, private placement notes and overdrafts
Foreign exchange on borrowings
Interest payable on leases
Amortisation of borrowing costs
Pension interest cost
Loss on revaluation of derivative instruments
Net finance costs
8. Taxation
8.1 Accounting policy
2022
£’m
2021
£’m
0.9
0.1
1.0
(6.9)
0.2
(3.0)
(0.6)
–
–
(10.3)
(9.3)
–
–
–
(5.9)
–
(2.5)
(0.5)
(0.1)
(0.1)
(9.1)
(9.1)
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.
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.
161161
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
8. Taxation continued
8.2 Taxation – income statement and other comprehensive income
8.2.1 Tax on profit
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 charge on actuarial gains and losses
Deferred tax (charge)/credit on share-based payments
Deferred tax charge on translation
Income tax charge in the statement of other comprehensive income
Total current taxation
Total deferred taxation
Total taxation
Note
8.3
8.3
8.3
8.3
2022
£’m
(19.1)
1.5
(17.6)
4.6
0.1
(0.7)
4.0
2021
£’m
(18.8)
1.5
(17.3)
2.2
0.4
0.3
2.9
(13.6)
(14.4)
(0.3)
–
–
(0.2)
–
(0.5)
(17.9)
3.8
(14.1)
–
0.1
(0.5)
0.2
(0.1)
(0.3)
(17.2)
2.5
(14.7)
The Group’s UK profits for this financial year are taxed at the statutory rate of 19.0% (2021: 19.0%). The deferred tax balances
have been measured using the applicable enacted rates. In the UK, legislation to increase the standard rate of corporation
tax from 19% to 25% from 1 April 2023 was substantively enacted in the Finance Act 2021 on 24 May 2021, and consequently
deferred tax has been remeasured to reflect this.
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% (2021: 19.0%). The differences are
explained below:
Profit before taxation
Profit before taxation multiplied by the standard rate of corporation tax in the UK
of 19.0% (2021: 19.0%)
Effects of:
Expenses not deductible for tax purposes
Overseas tax rate differences
Rate change adjustment
Prior year adjustments
2022
£’m
61.4
2021
£’m
64.0
(11.7)
(12.2)
(0.2)
(2.5)
0.1
0.7
(0.9)
(3.5)
0.4
1.8
Income tax charge in the income statement
(13.6)
(14.4)
162
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
8.3 Taxation – balance sheet
The net movement in deferred tax is as follows:
Accelerated
tax
depreciation
£’m
Post-
retirement
benefit
provisions
£’m
(4.7)
0.1
–
–
–
(4.6)
0.1
–
–
1.5
(0.7)
–
(0.5)
–
0.3
–
–
–
(4.5)
0.3
Intangible
assets on
acquisition
£’m
(18.0)
3.8
0.2
–
0.2
(13.8)
4.5
–
(0.8)
(10.1)
Purchased
goodwill
£’m
Other
timing
differences
£’m
5.2
(1.5)
0.3
–
–
4.0
(1.9)
–
–
2.1
5.5
0.7
(0.1)
0.1
–
6.2
1.3
(0.5)
–
7.0
Total
£’m
(10.5)
2.4
0.4
(0.4)
0.2
(7.9)
4.0
(0.5)
(0.8)
(5.2)
2022
£’m
1.7
(6.9)
(5.2)
2021
Restated1
£’m
4.2
(12.1)
(7.9)
At 1 January 2021
Income statement credit/(charge)
US Federal tax rate change
adjustment
Tax credit/(charge) relating to
components of other
comprehensive income
Exchange difference
At 31 December 2021
Income statement credit/(charge)
Tax credit/(charge) relating to
components of other
comprehensive income
Exchange difference
At 31 December 2022
Comprised of:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
1 See note 2.4 for details regarding reclassification adjustments to the comparative balance sheets.
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 £7.0 million (2021: £14.0 million) are expected to fall due after more than one year and deferred tax
assets of £1.1 million (2021: £7.5 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
Tax effect of losses
2022
£’m
10.8
14.1
24.9
2021
£’m
3.3
20.2
23.5
2022
£’m
(2.7)
(4.2)
(6.9)
2021
£’m
(0.6)
(5.4)
(6.0)
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.
In respect of unremitted earnings of overseas subsidiaries, 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.
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9. Earnings per share
9.1 Earnings per share
Profit for the year (£'m)
Basic earnings per share (p)
Diluted earnings per share (p)
2022
47.8
24.6p
24.5p
2021
49.6
25.4p
25.3p
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 Weighted average number of shares
Weighted average number of shares (including treasury shares)
Treasury shares
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
9.3 Non-GAAP Alternative Performance Measure: Adjusted earnings per share
Adjusted earnings per share is summarised as follows:
Basic adjusted earnings per share
Diluted adjusted earnings per share
For definition and reconciliation, see Alternative Performance Measures on page 210.
10. Goodwill and intangible assets
10.1 Accounting policy
2022
‘m
196.8
(0.5)
(2.1)
194.2
1.0
195.2
2022
34.7p
34.5p
2021
‘m
196.8
(0.5)
(0.9)
195.4
0.7
196.1
2021
32.1p
32.0p
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.
164
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
10.1.2 Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment. 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.
i. Intangible assets arising on business combinations
On acquisition of businesses by the Group, the Group recognises any separately identifiable intangible assets separately from
goodwill. This includes acquired brands, customer relationships, trademarks and licences. These intangible assets are initially
measured at fair value and amortised on a straight-line basis over their estimated useful economic lives, being:
• Acquired brands
5 to 20 years
• Customer relationships 9 to 15 years
ii. Computer software
Computer software which the Group has control over, is initially recognised at the purchase price of the software, plus directly
attributable costs of preparing the software for use. Directly attributable costs include configuration and customisation costs,
including both external consultancy and employee costs. Configuration and customisation costs associated with Software as
a Services (SaaS) arrangements are capitalised only if they create an intangible asset that the Group controls. If these costs
do not meet the definition of an intangible asset but are considered to be an integral part of the service provided by the
software provider, they are capitalised as a prepayment and expensed as the service is provided. In other cases, these costs are
expensed as incurred. Computer software is subsequently amortised on a straight-line basis over its estimated useful economic
lives, being:
• Computer software
3 to 7 years
iii. Research and development costs
Research costs are expensed to the income statement as incurred. Development costs are capitalised when all of the following
can be demonstrated:
•
•
•
•
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale.
The Group’s intention to complete the intangible asset and use or sell it.
The Group’s ability to use the intangible asset or to sell it.
That the intangible asset will generate probable future economic benefits. This includes the ability to demonstrate the
existence of a market for the intangible asset’s output or for the intangible asset itself; or, if the asset is to be used internally,
the Group must be able to demonstrate the usefulness of the intangible asset.
The availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset.
•
The Group’s ability to measure reliably the expenditure attributable to the intangible asset during its development.
The Group does not currently capitalise any development costs, as for new products, the incremental costs from the point at
which technical feasibility is demonstrated, and there is enough certainty that sufficient future economic benefits will be derived
are not material.
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.
165165
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials 10. Goodwill and intangible assets continued
10.2 Cash generating units
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 and to which goodwill is allocated. This conclusion is consistent with the approach adopted in
previous years.
10.3 Carrying amount of goodwill
Net carrying value
At 1 January 2021
Exchange difference
At 31 December 2021
Exchange difference
At 31 December 2022
£’m
361.9
1.4
363.3
36.0
399.3
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
2022
£’m
302.7
60.2
36.4
399.3
2021
£’m
268.5
60.2
34.6
363.3
10.3.1 Impairment tests for goodwill
The recoverable amounts of CGUs are estimated from value in use (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.
Assumptions
Cash flow projections
Cash flow projections, including EBITDA margins, which have been reviewed and approved by the Board, are derived from the
bottom-up budget for 2023 and the strategic plan for 2024 – 2025, extrapolated for a further two years at an estimated medium-
term growth rate for each CGU. The five-year cash flows were extrapolated using a long-term growth rate of 1.75% (2021: 1.5%)
in order to calculate the terminal recoverable amount. The forecasts were derived using assumptions based on market growth
expectations, estimated share gains, and margin expansion from executing of strategic initiatives.
Climate change
The Group has considered the potential impact of climate change on future cash flows and the terminal growth rate used in the
impairment test. This took into consideration the quantification of the risks and opportunities identified in the TCFD disclosures
outlined in the sustainability report on pages 53 to 63, as well as the commitments made in the sustainability roadmap. This
included overlaying the impact of the quantified NPV impact for the physical risk as disclosed in the sustainability report, as
well as an initial estimate of the transition risk for which work to fully assess is ongoing. After taking into account the potential
impact of climate change, significant headroom remained in the model.
In addition, there have been no factors identified that would be expected to limit the useful lives of any major assets or parts of
the business that would suggest the current terminal growth rate is not appropriate.
166
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
Discount rates
Discount rates are estimated using a weighted average cost of capital calculation as a base for each CGU. This uses observable
information such as market risk premiums, comparable company information, and country-specific interest rates to align with
the risk profiles of the CGUs. This is then adjusted to derive a pre-tax rate.
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
Impairment review results: 2022
Average pre-tax
discount rate
Average EBITDA margin: years
one to five
2022
12.8%
12.7%
15.3%
2021
12.7%
11.2%
14.4%
2022
21.9%
17.5%
19.2%
2021
21.9%
15.7%
20.2%
A review of the carrying amount of goodwill and intangible assets across the Group has been carried out at year end taking
into account the current trading conditions and future prospects. The assumptions have been subjected to sensitivity analyses,
including sensitising revenue, EBITDA margin and the discount rate. The annual impairment review did not result in any
impairment losses being recognised in 2022. Results are summarised as follows:
UK & Ireland: Relative to the base case scenario, revenue would need to decline by over 6% on average in each of the five years
from 2023 to 2027, to eliminate VIU headroom, or the average EBITDA margin for the next five years would need to decrease
from 17.5% to 13.9%, to reduce VIU headroom to zero, or the discount rate would need to increase from 10.0% to 13.4%, to
reduce VIU headroom to zero. This is not considered a reasonably possible change in assumption.
North America: Relative to the base case scenario, revenue would need to decline by over 8% on average in each of the five
years from 2023 to 2027, to eliminate VIU headroom, or the average EBITDA margin for the next five years would need to
decrease from 21.9% to 16.6%, to reduce VIU headroom to zero, or the discount rate would need to increase from 10.4% to
15.3%, to reduce VIU headroom to zero. This is not considered a reasonably possible change in assumption.
International: Relative to the base case scenario, revenue would need to decline by over 13% on average in each of the five
years from 2023 to 2027, to eliminate VIU headroom, or the average EBITDA margin for the next five years would need to
decrease from 19.2% to 13.3% for the VIU headroom of the International division to reduce to zero, or the discount rate would
need to increase from 12.3% to 21.2%, to reduce VIU headroom to zero. This is not considered a reasonably possible change in
assumption.
167167
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
10. Goodwill and intangible assets continued
10.4 Carrying amount of intangible assets
Computer
software
£’m
Acquired
brands
£’m
Customer
relationships
£’m
Other
Intangibles
£’m
Note
Cost
At 1 January 2021
Additions
Disposals
Exchange difference
At 31 December 2021
Additions
Disposals
Transfers between categories
Exchange difference
At 31 December 2022
Accumulated amortisation
At 1 January 2021
Amortisation charge for the year
Disposals
Impairment
Exchange difference
At 31 December 2021
Amortisation charge for the year
Disposals
Impairment
Exchange difference
At 31 December 2022
Net carrying value
At 1 January 2021
At 31 December 2021
At 31 December 2022
13.2
4.4
(2.0)
(0.1)
15.5
4.7
(0.4)
0.1
1.8
21.7
(7.1)
(1.3)
2.0
(1.9)
(0.1)
(8.4)
(2.0)
0.4
(0.1)
(0.9)
85.8
0.1
(3.0)
(0.8)
82.1
–
–
(0.1)
7.8
89.8
(57.4)
(5.4)
3.0
–
0.4
(59.4)
(5.4)
–
(0.1)
(5.9)
(11.0)
(70.8)
6.1
7.1
10.7
28.4
22.7
19.0
252.7
–
–
(0.2)
252.5
–
–
–
24.3
276.8
(203.1)
(12.1)
–
–
(0.3)
(215.5)
(12.2)
–
–
(21.3)
(249.0)
49.6
37.0
27.8
4
4
–
–
–
–
–
0.2
–
–
–
0.2
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
Total
£’m
351.7
4.5
(5.0)
(1.1)
350.1
4.9
(0.4)
–
33.9
388.5
(267.6)
(18.8)
5.0
(1.9)
–
(283.3)
(19.6)
0.4
(0.2)
(28.1)
(330.8)
84.1
66.8
57.7
Included with computer software are assets under construction of £3.4 million (2021: £4.2 million) for which amortisation has
not yet commenced.
The amortisation charge for the year has been included in selling, general and administrative expenses in the income statement
and comprises £17.6 million (2021: £17.5 million) relating to amortisation of acquired intangible assets and £2.0 million (2021:
£1.3 million) relating to amortisation of other intangible assets.
168
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
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.
The Group have considered the risks relating to sustainability on PPE and have confirmed that these will not impact the Group.
169169
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials 11. Property, plant and equipment continued
11.2 Carrying amount of property, plant and equipment
Freehold
land and
buildings
£’m
Plant and
machinery
£’m
Note
Cost
At 1 January 2021
Additions
Disposals
Exchange difference
At 31 December 2021
Additions
Disposals
Transfers between asset categories
Exchange difference
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Depreciation charge for the year
Disposals
Impairment
Exchange difference
At 31 December 2021
Depreciation charge for the year
Disposals
Impairment
Transfers between asset categories
Exchange difference
At 31 December 2022
Net carrying value
At 1 January 2021
At 31 December 2021
At 31 December 2022
28.3
0.2
(1.7)
(1.8)
25.0
0.3
–
1.0
3.3
29.6
(9.4)
(0.8)
0.9
–
1.5
(7.8)
(1.0)
–
–
(0.2)
(1.9)
(10.9)
18.9
17.2
18.7
4
4
Depreciation on property, plant, and equipment is included in the income statement as follows:
Cost of sales
Selling, general and administrative expenses
Total depreciation charge
97.6
15.8
(2.8)
(2.1)
108.5
18.9
(8.6)
(1.0)
20.9
138.7
(55.8)
(10.7)
2.7
(0.2)
1.8
(62.2)
(11.4)
8.3
(0.7)
0.2
(17.0)
(82.8)
41.8
46.3
55.9
2022
£’m
10.1
2.3
12.4
Total
£’m
125.9
16.0
(4.5)
(3.9)
133.5
19.2
(8.6)
–
24.2
168.3
(65.2)
(11.5)
3.6
(0.2)
3.3
(70.0)
(12.4)
8.3
(0.7)
–
(18.9)
(93.7)
60.7
63.5
74.6
2021
£’m
9.0
2.5
11.5
The carrying amounts of property, plant and equipment have been reviewed for impairment, with a charge of £0.7 million (2021:
charge of £0.2 million) recognised. As part of this review, the Group has considered the impact of physical risk hazards arising from
climate change on significant asset locations, the risk of obsolescence or impairment of equipment due to the introduction of
climate-related technologies, and additional costs of transitioning to energy efficient technology. There were no assets identified
where this would significantly reduce the useful economic life and no impairment charge has been recognised in relation to
climate change. Refer to the sustainability report on pages 53 to 63 for further detail on climate risks and opportunities.
170
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
12. Leases
12.1 Accounting policy
Recognition
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 twelve 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 that 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, and
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.
171171
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials 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:
Land and
buildings
£’m
Plant and
machinery
£’m
At 1 January 2021
Additions
Lease extensions
Change in indexation
Disposals
Depreciation charge
Exchange difference
At 31 December 2021
Additions
Change in indexation
Disposals
Depreciation charge
Revaluation impairment
Exchange difference
At 31 December 2022
50.0
1.4
4.7
0.1
(0.1)
(6.1)
0.2
50.2
6.8
0.1
(0.1)
(6.1)
(0.2)
4.3
55.0
12.4 Carrying value of lease liabilities
Set out below are the carrying amounts of lease liabilities and the movements during the year:
At 1 January
New leases
Lease extensions
Change in indexation
Disposals
Interest charge
Lease payments
Exchange difference
At 31 December
Current liabilities
Non-current liabilities
172
Total
£’m
51.8
2.3
4.7
0.1
(0.1)
(7.0)
0.2
52.0
8.3
0.1
(0.1)
(7.1)
(0.2)
4.3
57.3
2021
£’m
(53.8)
(2.3)
(4.7)
(0.2)
0.2
(2.5)
8.6
(0.1)
1.8
0.9
–
–
–
(0.9)
–
1.8
1.5
–
–
(1.0)
–
–
2.3
2022
£’m
(54.8)
(8.3)
–
(0.1)
0.1
(3.0)
9.2
(4.8)
(61.7)
(54.8)
2022
£’m
(6.8)
(54.9)
(61.7)
2021
£’m
(6.0)
(48.8)
(54.8)
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
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 selling, general and administration expenses)
Expense relating to variable lease payments not included in lease liabilities (included in cost of
sales and selling, general and administration expenses)
2022
£’m
(7.1)
(3.0)
2021
£’m
(7.0)
(2.5)
(2.3)
(1.3)
(0.7)
(13.1)
(0.5)
(11.3)
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.
Management applied judgment in determining whether these options were reasonably certain to be exercised when
determining the lease term. In making this judgment, management considered the remaining lease term, future business plans
and other relevant economic factors.
As at 31 December 2022, potential future cash outflows of £60.7 million (2021: £75.8 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).
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.
The carrying amounts of inventories are stated with due allowance for excess, obsolete or slow-moving items. Management
exercises judgement in assessing net realisable value. In estimating provisions for slow-moving and obsolete inventory
management assesses of the nature and condition of the inventory, including assumptions around demand, market conditions
and new product development initiatives. To provide a consistent basis of estimation, the Group defines a methodology
for estimating the provision required to bring inventory to net realisable value. This methodology calculates a provision for
obsolete inventory at 100% of the value of inventory with no movement in the last 12 months and for slow moving inventory at
75% inventory holdings in excess of the last 12 months sales. Adjustments are then made where appropriate, such as for new
products without sales history or where inventory holdings are higher for strategic reasons. In 2022, the slow-moving inventory
provision for North America was amended to consider the excess over 24 months sales rather than 12 months. This change
was made as a result of having abnormally high levels of stock following the significant supply chain disruption experienced
in 2021 and the fall in demand in the second half of 2022. Although holdings are higher, this inventory is considered to have a
net realisable value in excess of its carrying value. Had this change not been made, the provision would have been £3.9 million
higher. This would have been expected to unwind in 2023 when the inventory was sold.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
13. Inventories continued
13.2 Carrying amount of inventories
Raw materials and consumables
Work in progress
Finished goods
2022
£’m
45.4
25.0
82.7
2021
£’m
34.4
19.6
83.8
153.1
137.8
The cost of materials charged to cost of sales in the income statement during the year was £320.7 million (2021: £279.0 million).
Inventories are stated net of an allowance for excess, obsolete or slow-moving items of £18.5 million (2021: £19.5 million).
A charge in respect of an increase in inventory provision of £0.2 million (2021: £0.9 million) was recognised in respect of
inventories during the year.
There were no borrowings secured on the inventories of the Group (2021: £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 transaction price. 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 trade receivables 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.
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.
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
2022
£’m
70.5
(3.0)
67.5
6.4
7.5
81.4
2021
£’m
72.9
(3.0)
69.9
5.7
5.4
81.0
All trade and other receivables are current. Trade receivables is net of an expected credit loss provision of £3.0 million (2021:
£3.0 million). The net carrying amounts of trade and other receivables are considered to be a reasonable approximation of their
fair values.
174
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
Impairment of trade receivables
An expected credit loss of £3.0 million has been recognised at 31 December 2022 (2021: £3.0 million).
The impairment loss allowance was determined as follows:
31 December 2022
Expected credit loss rate
Gross trade receivables (£’m)
Loss allowance (£’m)
31 December 2021
Expected credit loss rate
Gross trade receivables (£’m)
Loss allowance (£’m)
Not
yet due
0.3%
58.5
0.2
Not
yet due
0.7%
60.9
0.4
Movement in the allowance for impairment of trade receivables is as follows:
At 1 January
Provision for impairment
Receivables written off during the year
Unused amounts reversed
Exchange difference
At 31 December
0–3
months
overdue
3–12
months
overdue
> 12
months
overdue
15.7%
45.5%
100.0%
10.2
1.6
1.1
0.5
0.7
0.7
0–3
months
overdue
3–12
months
overdue
> 12
months
overdue
13.0%
22.2%
100.0%
10.0
1.3
0.9
0.2
1.1
1.1
2022
£’m
(3.0)
(0.4)
0.6
–
(0.2)
(3.0)
Movements in the impairment allowance are recognised in selling, general and 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
2022
£’m
36.5
16.1
19.9
8.9
81.4
Total
4.2%
70.5
3.0
Total
4.1%
72.9
3.0
2021
£’m
(3.7)
(0.1)
0.7
0.1
(0.0)
(3.0)
2021
£’m
41.0
16.2
17.2
6.6
81.0
175175
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
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 fair value through profit or loss (FVPL). See note 19.1 for financial
instruments accounting policy.
Financial assets measured at FVPL are as follows:
Unlisted shares
2022
£’m
1.2
2021
£’m
1.1
The gain recognised through the profit or loss in the current year amounted to £0.1 million (2021: £Nil) and related solely to
foreign exchange. The maximum market 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 and other short-term, highly liquid investments with original maturities of three months or less. Bank
overdrafts are included in cash and cash equivalents only when there is a legal right of offset and an intention to settle net.
Otherwise these are classified as borrowings. Please see below for reconciliation and refer to note 18 for bank overdrafts
included in borrowings.
15.2 Carrying amounts of cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Cash at bank and on deposit
1 For details of restatement, see note 2.4.
Reconciliation of cash and cash equivalents and bank overdrafts at the period end
Cash at bank and on deposits
Bank overdraft disclosed in borrowings1
Net cash and cash equivalents and bank overdrafts at the end of the year
1 For details of restatement, see note 2.4.
2022
£’m
71.4
3.2
74.6
2022
£’m
74.6
(16.4)
58.2
2021
Restated1
£’m
76.6
0.4
77.0
2021
Restated1
£’m
77.0
(18.9)
58.1
Included in cash and cash equivalents is £3.6 million (2021: £1.5 million) of cash held in a foreign subsidiary that is not available
for use by the Group as a result of exchange control restrictions in force.
The carrying amounts of cash and cash equivalents are denominated in the following currencies:
Sterling
US dollars
Euros
Other currencies
176
2022
£’m
21.7
29.5
8.1
15.3
74.6
2021
£’m
27.0
22.5
13.1
14.4
77.0
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
16. Trade and other payables
16.1 Accounting policy
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
2022
£’m
(55.8)
(3.7)
(27.4)
(1.4)
(88.3)
(88.2)
(0.1)
(88.3)
The carrying amounts of trade and other payables are considered to be a reasonable approximation of their fair values.
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
2022
£’m
(49.9)
(13.9)
(17.7)
(6.8)
(88.3)
2021
£’m
(78.4)
(4.4)
(29.1)
(1.0)
(112.9)
(112.8)
(0.1)
(112.9)
2021
£’m
(59.2)
(22.4)
(22.8)
(8.5)
(112.9)
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.
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Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
17. Derivative financial instruments continued
The full fair value of a hedging derivative is classified as non-current and current asset/liabilities based on the contractual
maturity of the derivative. If the contractual maturity of the derivative is more than twelve months then it is classified as a
non-current asset or liability and as a current asset or liability when the contractual maturity of the derivative is less than twelve
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 other comprehensive
income, 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.
Forward exchange contracts – not designated as hedges
Cross currency interest rate swaps – fair value hedges
Total
Analysed as:
Current
Non-current
Total
2022
2021
Assets
£’m
Liabilities
£’m
Assets
£’m
Liabilities
£’m
–
0.2
0.2
–
0.2
0.2
(0.2)
–
(0.2)
(0.2)
–
(0.2)
–
–
–
–
–
–
(0.3)
–
(0.3)
(0.3)
–
(0.3)
The carrying amounts of derivative financial instruments are denominated in the following currencies:
Sterling
US dollars
2022
2021
Assets
£’m
Liabilities
£’m
Assets
£’m
Liabilities
£’m
0.2
–
0.2
–
(0.2)
(0.2)
–
–
–
(0.3)
(0.3)
17.2.1 Forward exchange contracts
The notional principal amount of the outstanding forward foreign exchange contracts at 31 December 2022 was £19.8 million
(2021: £24.3 million). The contracts have a range of maturities up to 31 October 2023. Hedge accounting is not applied to
forward exchange contracts and gains or losses are recognised in the income statement.
During the year a gain of £0.1 million (2021: loss of £0.1 million) was recognised in the income statement for the changes in
value of the forward exchange contracts.
178
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
17.2.2 Cross-currency interest rate swaps
In April 2022, the Group entered into a fixed to fixed cross-currency interest rate swap, swapping US$10 million of the proceeds
from the private placement notes into sterling and euros to fund the Group’s UK and International operations. The notional
principal amounts of the outstanding interest rate swap at 31 December 2022 were £7.2 million (2021: £Nil). The swap
instrument has been designated as a fair value hedge against the coupon payments due on the US$10 million of US dollar
denominated private placement debt. The hedge ratio is 1:1 as the underlying value of the hedging instrument matches the
underlying value of the hedged item. There was no hedge ineffectiveness.
During the year a gain of £0.2 million (2021: £Nil) was recognised in other comprehensive income.
17.2.3 Net investment hedges
The Group uses foreign currency-denominated debt to hedge the value of its US dollar and euro-denominated net assets, which
may change due to respective movements in US dollar and euro exchange rates. At 31 December 2022, the value of the net
investment hedges was £133.5 million (2021: £126.0 million). These hedges are considered highly effective, and no ineffective
portion has been recognised in the income statement.
The hedge ratio of each net investment hedge was 1:1, holding all other variables constant. The weighted average hedged rate
of the US net investment hedge was 1.237 (2021: 1.376) and of the EUR net investment hedge was 1.173 (2021: 1.163).
The effect of the net investment hedges on the Group’s financial statements is summarised as follows:
2022
US net
investment
hedge
2022
EUR net
investment
hedge
2021
US net
investment
hedge
2021
EUR net
investment
hedge
(90.9)
(110.0)
1:1
(42.6)
(48.1)
1:1
(9.5)
(2.2)
9.5
2.2
(81.4)
(110.0)
1:1
(0.8)
0.8
(44.6)
(53.1)
1:1
3.1
(3.1)
Loan carrying amount (£m)
Loan carrying amount ($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. Borrowings
18.1 Accounting policy
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. Bank overdrafts have
been included in borrowings. Please refer to note 15 for reconciliation of cash and cash equivalents and bank overdraft.
18.2 Carrying amounts of borrowings
Unsecured borrowings at amortised cost:
Bank borrowings
Bank overdraft
Senior notes
Capitalised borrowing costs
Analysed as:
Current liabilities
Non-current liabilities
1 For details of restatement, see note 2.4.
Note
15
2022
£’m
(74.9)
(16.4)
(99.2)
2.1
2021
Restated1
£’m
(116.5)
(18.9)
(33.3)
0.7
(188.4)
(168.0)
(15.9)
(172.5)
(188.4)
(19.0)
(149.0)
(168.0)
179179
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
18. Borrowings continued
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 borrowings are denominated in the following currencies:
Sterling1
US dollars
Euros
Other
2022
£’m
(24.2)
(121.5)
(42.7)
–
2021
£’m
(18.1)
(105.2)
(44.6)
(0.1)
(188.4)
(168.0)
1
Includes capitalised borrowing costs.
18.2.1 Bank borrowings
Multi-currency revolving credit facility
In December 2022, the Group refinanced its revolving credit facility, securing a new £210 million sustainability-linked Revolving
Credit Facility, which may be increased through an accordion option of up to £100 million. The facility matures on 13 December
2026, with an option to extend by a further year. The banking facility is unsecured and is guaranteed by Tyman plc and its
principal subsidiary undertakings. A portion of the loan margin is now linked to the performance of the Group on three
sustainability metrics, which align with Tyman’s immediate sustainability priorities and its 2030 sustainability roadmap:
1. Reduction in Scope 1 and 2 emissions from the 2019 baseline.
2. Year-on-year increase in percentage of revenue from positive-impact solutions that contribute to the United Nations
Sustainable Development Goals.
3. Reduction in the Total Recordable Incident Rate per one million hours worked (excluding the impact of COVID-19).
Progress against these sustainability metrics will be independently verified on an annual basis. If Tyman achieves some, or all
of these metrics, then the loan pricing will be reduced for the following year; a shortfall against the metrics will result in Tyman
paying a similar premium to a nominated charity.
As at 31 December 2022, the Group has undrawn amounts committed under the multi-currency revolving credit facility of £125.8
million (2021: £123.6 million). These amounts are floating rate commitments which expire beyond twelve months.
18.2.2 Private placement notes
The Group’s private placement notes of US$120 million are notes issued to US financial institutions. These comprise:
• US$45.0 million issued in November 2014, with a 10-year maturity from inception at a coupon of 5.37%, due for repayment
in November 2024.
• US$75 million issued in April 2022. US$40 million of these notes have a term of seven years maturing in April 2029, with a
coupon rate of 3.51%, and US$35 million have a term of ten years maturing in April 2032, with a coupon rate of 3.62%. These
notes incorporate three sustainability performance targets, which align with Tyman’s sustainability roadmap. This incentive
mechanism results in a modest reduction or increase in the coupon rate depending on performance against these targets.
The targets are:
• Reduction in Tyman’s Scope 1 and 2 emissions by a series of milestones, including a reduction of 50% by 2026 and
carbon neutrality by 2030 (relative to 2019 baseline).
•
Submission of Tyman’s Scope 3 target to the Science Based Target initiative (SBTi) for verification by February 2023.
• Participation in CDP in 2022 and annually thereafter.
180
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
18.3 Net debt
18.3.1 Net debt summary
Borrowings
Lease liabilities
Cash
At 31 December
18.3.2 Net debt reconciliation
2022
£’m
2021
£’m
(188.4)
(149.1)
(61.7)
74.6
(54.8)
58.1
(175.5)
(145.8)
Liabilities from financing activities2
Other assets2
At 1 January 2021
(169.1)
(53.8)
(222.9)
Borrowings1
Lease
liabilities
Sub total
Financing cash flows (excluding interest)
Interest expense
Interest payments
Disposals
New leases
Lease modifications
Lease extensions
Foreign exchange adjustments
Amortisation of borrowing costs
At 31 December 2021
Financing cash flows (excluding interest)
Interest expense
Interest payments
Disposals
New leases
Lease modifications
Foreign exchange adjustments
Borrowing costs capitalised
Amortisation of borrowing costs
At 31 December 2022
17.8
(5.9)
6.3
–
–
–
–
2.3
(0.5)
6.2
(2.5)
2.5
0.2
(2.3)
(0.2)
(4.7)
(0.2)
–
24.0
(8.4)
8.8
0.2
(2.3)
(0.2)
(4.7)
2.1
(0.5)
(149.1)
(54.8)
(203.9)
(9.3)
(6.9)
6.5
–
–
–
(14.7)
2.1
(0.6)
6.2
(3.0)
3.0
0.1
(8.3)
(0.1)
(4.8)
–
–
(3.1)
(9.9)
9.5
0.1
(8.3)
(0.1)
(19.5)
2.1
(0.6)
Net cash
and bank
overdraft
69.7
(11.5)
–
–
–
–
–
(0.1)
–
58.1
(2.9)
–
–
–
–
–
3.0
–
–
Total
(153.2)
12.5
(8.4)
8.8
0.2
(2.3)
(0.2)
(4.7)
2.0
(0.5)
(145.8)
(6.0)
(9.9)
9.5
0.1
(8.3)
(0.1)
(16.5)
2.1
(0.6)
(172.0)
(61.7)
(233.7)
58.2
(175.5)
1 Borrowings exclude bank overdraft of £16.4 million (2021: £18.9 million).
2 Comparatives have been represented for consistency with current year presentation.
181181
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials 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 that 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 selling, general and 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).
182
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials 19.2 Financial instruments: by category
Assets as per balance sheet:
31 December 2022
31 December 2021
Financial
assets
at fair
value
through
profit or
loss
£’m
Financial
assets
at
amortised
cost
£’m
Derivatives
used for
hedging
£’m
Trade and other
receivables1
Financial assets at FVPL
Cash and cash
equivalents
Derivative financial
instruments
Total financial assets
67.5
–
74.6
–
142.1
–
1.2
–
–
1.2
–
–
–
0.2
0.2
1 Excludes non-financial assets, including other receivables and prepayments.
Financial
assets
at
amortised
cost
£’m
69.9
–
Total
£’m
67.5
1.2
74.6
58.1
0.2
143.5
–
128.0
Financial
assets
at fair
value
through
profit or
loss
£’m
Derivatives
used for
hedging
£’m
–
1.1
–
–
1.1
–
–
–
–
–
31 December 2022
Derivatives
used for
hedging
£’m
Other
financial
liabilities at
cost
£’m
–
–
(0.2)
–
(0.2)
(190.5)
(61.7)
–
(69.0)
(321.2)
31 December 2021
Restated1
Derivatives
used for
hedging
£’m
Other
financial
liabilities at
cost
£’m
–
–
(0.3)
–
(0.3)
(168.7)
(54.8)
–
(107.5)
(331.0)
Total
£’m
(190.5)
(61.7)
(0.2)
(69.0)
(321.4)
Borrowings2
Lease liabilities
Derivative financial instruments
Trade and other payables3
Total financial liabilities
1 For details of restatement, see note 2.4.
Total
£’m
69.9
1.1
58.1
129.1
Total
£’m
(168.7)
(54.8)
(0.3)
(107.5)
(331.3)
2 Excludes capitalised borrowing costs of £2.1 million (2021: £0.7 million) and includes bank overdraft £16.4 million (2021: £18.9 million).
3 Excludes non-financial liabilities, including employee cost accruals, deferred income and tax 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.
183183
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
19. Financial risk management and financial instruments continued
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.
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date.
During the year ended 31 December 2022, the Group operated within its borrowing facilities. Following a temporary relaxation
of the leverage covenant granted in 2021 to 3.5x at December 2021 and 4.0x at June 2022 due to uncertainty arising from
COVID-19, the leverage covenant returned to 3.0x adjusted EBITDA at December 2022.
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 2022
Borrowings1,4
Lease liabilities
Derivative financial instruments3
Trade and other payables2
At 31 December 2021 (Restated)4
Later than
one year but
not later
than five
years
£’m
Not
later than
one year
£’m
Later than
five years
£’m
(20.6)
(6.6)
(19.8)
(69.0)
(116.0)
(20.6)
(8.5)
(24.3)
(107.5)
(160.9)
(127.0)
(19.4)
–
–
(146.4)
(153.1)
(26.5)
–
–
(65.9)
(34.7)
–
–
(100.6)
–
(40.8)
–
–
(179.6)
(40.8)
Total
£’m
(213.5)
(60.7)
(19.8)
(69.0)
363.0
(173.7)
(75.8)
(24.3)
(107.5)
(381.3)
1 Excludes capitalised borrowing costs of £2.1 million (2021: £0.7 million) and includes bank overdraft £16.4 million (2021:£18.9 million).
2 Excludes non-financial liabilities.
3 Restated to reflect the gross undiscounted amount.
4 For details of restatement, see note 2.4.
184
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
19.3.4 Interest rate risk
The interest rate profile of the Group’s borrowings as at 31 December 2022 was as follows:
Floating
rate
borrowings1
£’m
Fixed rate
borrowings2
£’m
Fixed
rate lease
liabilities
£m
Sterling
US dollars
Euros
Other
At 31 December 2022
Sterling
US dollars
Euros
Other
(26.0)
(22.5)
(42.8)
–
(91.3)
(18.8)
(71.8)
(44.7)
(0.1)
–
(99.2)
–
–
(99.2)
–
(33.3)
–
–
At 31 December 2021 (restated)3
(135.4)
(33.3)
(18.4)
(32.0)
(1.1)
(10.2)
(61.7)
(14.6)
(35.6)
(1.4)
(3.2)
(54.8)
Total
£’m
(44.4)
(153.7)
(43.9)
(10.2)
(252.2)
(33.4)
(140.7)
(46.1)
(3.3)
(223.5)
1 Excludes capitalised borrowing costs of £2.1 million (2021: £0.7 million) and includes bank overdraft £16.4 million (2021: £18.9 million).
2 Excludes capitalised borrowing costs of £Nil (2021: £0.1 million).
3 For details of restatement, see note 2.4.
The interest rate on the floating bank loans is linked to the inter-bank rates relevant to each currency of borrowing. 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.
Interest rate sensitivity
The impact of a 200 basis point movement in floating interest rates on borrowings would have a c.£1.9 million
(2021: c. £2.0 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 0.8% during the year (2021: 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 that 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.
185185
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
–
(190.5)
19. Financial risk management and financial instruments continued
Foreign currency exchange rate sensitivity
Foreign currency financial assets and liabilities, translated into sterling at the closing rate, are as follows:
At 31 December 2022
Financial assets
Trade and other receivables1
Financial assets at FVPL
Cash and cash equivalents
Derivative financial instruments
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
At 31 December 2021
Financial assets
Trade and other receivables1
Financial assets at FVPL
Cash and cash equivalents
Derivative financial instruments
Total financial assets
Financial liabilities
Borrowings2,4
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
14.5
–
21.7
0.2
36.4
(26.0)
(18.3)
–
(11.3)
(55.6)
–
–
–
–
29.2
1.2
29.5
–
59.9
(121.7)
(32.1)
(0.2)
(40.5)
(194.5)
(2.2)
2.6
12.2
(14.9)
18.2
–
8.1
–
26.3
(42.8)
(1.1)
–
(13.9)
(57.8)
(0.3)
0.4
2.9
(3.5)
5.6
–
15.3
–
20.9
(10.2)
–
(3.3)
(13.5)
(1.1)
1.4
(0.6)
0.8
Sterling
£’m
US dollars
£’m
Euros
£’m
Other
£’m
13.9
–
27.1
–
41.0
(18.8)
(14.6)
–
(18.3)
(51.7)
–
–
–
–
36.5
1.1
22.5
–
60.1
(105.1)
(35.6)
(0.3)
(49.8)
(190.8)
(0.4)
0.4
12.7
(15.6)
15.7
–
13.1
–
28.8
(44.7)
(1.4)
–
(18.0)
(64.1)
–
0.4
3.5
(4.2)
3.8
–
14.3
–
18.0
(0.1)
(3.2)
–
(4.2)
(7.5)
(0.2)
0.3
(0.6)
0.7
1 Excludes non-financial assets.
2 Excludes capitalised borrowing costs of £2.1 million (2021: £0.7 million) and includes bank overdraft £16.4 million (2021: £18.9 million).
3 Excludes non-financial liabilities.
4 For details of restatement, see note 2.4.
186
Total
£’m
67.5
1.2
74.6
0.2
143.5
(61.7)
(0.2)
(69.0)
(321.4)
(3.6)
4.4
14.5
(17.6)
Total
£’m
69.9
1.1
77.0
–
148.0
(168.7)
(54.8)
(0.3)
(90.3)
(314.1)
(0.6)
1.1
15.6
(19.1)
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
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
Note
18
15
2022
£’m
252.2
(74.6)
541.6
719.2
2021
£’m
223.5
(77.0)
482.4
628.9
1 Excludes capitalised borrowing costs of £2.1 million (2021: £0.7 million) and includes bank overdraft £16.4 million (2021: £18.9 million).
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.
The table below summarised the fair value hierarchy of financial instruments recognised and measured at fair value in the
financial statements:
31 December 2022:
Interest rate swap derivative instruments
Financial assets at FVPL
Forward exchange contract derivative instruments
31 December 2021:
Financial assets at FVPL
Forward exchange contract derivative instruments
There were no transfers between levels in the current and prior year.
Level 1 fair
value
£’m
Level 2 fair
value
£’m
Level 3 fair
value
£’m
Carrying
amount
£’m
–
–
–
–
0.2
–
(0.2)
–
–
1.2
–
1.2
0.2
1.2
(0.2)
1.2
Level 1 fair
value
£’m
Level 2 fair
value
£’m
Level 3 fair
value
£’m
Carrying
amount
£’m
–
–
–
–
(0.3)
(0.3)
1.1
–
1.1
1.1
(0.3)
0.8
187187
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
19. Financial risk management and financial instruments continued
Derivative instruments 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 2022 is £Nil
(2021: liability of £0.3 million).
The fair value of floating rate borrowings approximates to the carrying amount because interest rates are at floating rates
where payments are reset to market rates at intervals of less than one year. The fair value of fixed rate borrowings is estimated
by discounting the future contracted cash flow, using appropriate yield curves, to the net present values. The fair value and
carrying value of borrowings is summarised below.
Current liabilities
Non-current liabilities
Fair value of borrowings
2022
2021
Fair value
£’m
(15.9)
(173.6)
(189.5)
Carrying
value
£’m
(15.9)
(172.5)
(188.4)
Fair value
£’m
(19.0)
(147.7)
(202.6)
Carrying
value
£’m
(19.0)
(149.0)
(168.0)
The fair value of cash and cash equivalents, receivables and payables approximates to the carrying amount because of the short
maturity of these instruments. The carrying values of these are outlined above in note 19.2.
There were no changes in valuation techniques during the year.
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.
Provisions, by their nature, are uncertain. 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.
20.1 Carrying amounts of provisions
At 1 January 2021
(3.4)
(0.5)
(2.8)
Property
related
£’m
Restructuring
£’m
Warranty
£’m
Other
£’m
(2.2)
Total
£’m
(8.9)
(Charged)/credited to the income statement
Additional provisions in the year
Unused amounts reversed
Exchange difference
At 31 December 2021
(Charged)/credited to the income statement
Additional provisions in the year
Unused amounts reversed
Utilised in the year
Exchange difference
At 31 December 2022
188
–
–
–
(3.4)
–
0.4
–
–
(3.0)
–
0.2
–
(0.3)
(3.2)
–
0.2
(0.1)
(3.4)
(0.1)
1.6
–
(1.3)
–
0.6
0.1
–
(0.6)
(0.1)
1.0
0.1
(1.2)
–
0.1
0.4
(0.2)
(0.9)
(0.2)
2.8
0.1
(6.2)
(3.2)
1.1
0.7
(0.3)
(7.9)
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
Analysed as:
Current liabilities
Non-current liabilities
2022
£’m
(5.0)
(2.9)
(7.9)
2021
£’m
(1.4)
(4.8)
(6.2)
Current liabilities are those aspects of provisions that are expected to be utilised within the next twelve months.
20.2.1 Property related
Property provisions include provisions for site restoration costs and leasehold dilapidations.
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 substantially relate to the closure of the Hamburg facility, which is expected to be settled within the
next twelve months.
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 2031. The unused amounts reversed during the year
predominantly relates to a reduction in a provision made on a previous acquisition as well as a reduction in a product warranty
provision.
20.2.4 Other
The amount utilised during the year in other provisions of £0.4 million (2021: balance of £0.4 million) related to the release
of a tax provision no longer needed. The remaining £0.9 million (2021: £0.8 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.
21. Retirement benefit obligations
21.1 Accounting policy
The Group operates both defined contribution and defined benefit pension 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 the income statement.
189189
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
21. Retirement benefit obligations continued
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 £3.8 million (2021: £3.6 million). At the
year end, the Group had unpaid pension contributions of £0.2 million (2021: £0.1 million) included within employee benefit
liabilities.
21.3 Defined benefit pension schemes
The table below outlines where the Group’s post-employment amounts and activity are included in the financial statements.
Net defined benefit obligation on the balance sheet
Income statement charge1
Remeasurements2
2022
£’m
(4.3)
(0.3)
–
2021
£’m
(4.0)
(0.3)
2.1
1 The income statement charge included within profit before taxation includes current service costs, past service costs, administrative costs and
interest costs.
2 The remeasurement in the current year amounted to £Nil included in the consolidated statement of comprehensive income and consolidated
statement of changes in equity (2021: £1.6 million is included net of the £0.5 million deferred tax charge).
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.
In 2021, the Group commenced a process to terminate in the two remaining US defined benefit schemes. These schemes have
been closed to new entrants and closed to further accrual of service for many years. Termination of these schemes will reduce
income statement volatility, reduce administration costs and burden, and will reduce future cash outflows. Under the terms of
the arrangement, participants will be given the option of receiving a lump-sum benefit or an annuity, the liability for which will
be transferred to an insurance company. The termination process is expected to take up to 24 months, with the final distribution
date in the second half of 2023. The final funding payment to be made by the Group in 2023 is expected to be between $2.9
million and $4.3 million. After such time, the Group will have no further obligations remaining.
190
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
The movement in the defined benefit obligations over the year is as follows:
Present value of
obligations
Fair value of
plan assets
Net defined
liability
Note
7
5
Balance at 1 January
Included in the income
statement:
Current service cost1
Administration costs
Interest (expense)/income
Subtotal in income
statement1
Included in other
comprehensive income
Remeasurement gain/(loss)
arising from:
Net (loss)/gain on plan assets2
Loss from change in
demographic assumptions
Gain from change in financial
assumptions
Experience loss
Subtotal in other
comprehensive income3
Employer contributions
Benefit payments
Exchange difference
Balance at 31 December
2022
£’m
(29.9)
–
–
(0.8)
(0.8)
–
–
6.9
(0.2)
6.7
–
1.7
(3.1)
(25.4)
2021
£’m
(31.8)
(0.1)
–
(0.6)
(0.7)
2022
£’m
25.9
–
(0.3)
0.8
0.5
2021
£’m
22.9
–
(0.1)
0.5
0.4
2022
£’m
(4.0)
–
(0.3)
–
(0.3)
–
(6.7)
1.1
(6.7)
(0.1)
1.2
(0.1)
1.0
–
1.7
(0.1)
(29.9)
–
–
–
(6.7)
–
(1.5)
2.9
21.1
–
–
–
1.1
2.5
(1.3)
0.3
25.9
–
6.9
(0.2)
–
–
0.2
(0.2)
(4.3)
2021
£’m
(8.9)
(0.1)
(0.1)
(0.1)
(0.3)
1.1
(0.1)
1.2
(0.1)
2.1
2.5
0.4
0.2
(4.0)
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 The remeasurement in the current year amounted to £Nil included in the consolidated statement of comprehensive income and consolidated
statement of changes in equity (2021: £1.6 million is included net of the £0.5 million deferred tax charge.) Also see note 8.
Defined benefit plan liabilities and assets by country are as follows:
United States
Italy
Balance at 31 December
Present value
of obligations
Fair value of
plan assets
Net defined
liability
2022
£’m
(22.4)
(3.0)
(25.4)
2021
£’m
(26.8)
(3.1)
(29.9)
2022
£’m
21.1
–
21.1
2021
£’m
25.9
–
25.9
2022
£’m
(1.3)
(3.0)
(4.3)
2021
£’m
(0.9)
(3.1)
(4.0)
191191
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
21. Retirement benefit obligations continued
Plan assets comprise the following asset classes:
Fixed income
2022
£’m
21.1
%
100.0
2021
£’m
25.9
%
100.0
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
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. As a termination process
has commenced, all US plan assets were transferred to fixed income investments, comprising a
mixture of government and corporate bonds, to reduce volatility and provide an acceptable level of
investment risk to better match liabilities. The Italian plans do not have plan assets.
Changes in bond yields
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.
Inflation risk
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.
Life expectancies
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:
Discount rate
Inflation
Salary growth rate
2022
2021
United
States
5.00%
2.40%
n/a
Italy
3.10%
2.75%
2.75%
United
States
2.64%
2.25%
n/a
Italy
0.80%
1.25%
1.25%
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.
2022
United
States
20.1
22.2
21.7
23.7
Italy
n/a
n/a
n/a
n/a
2021
United
States
20.1
22.1
21.6
23.6
Italy
n/a
n/a
n/a
n/a
Retiring at the end of the reporting year
Male
Female
Retiring 20 years after the end of the reporting year
Male
Female
192
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
The sensitivity of the defined benefit obligation to changes in the discount rate assumption is:
US
Italy
Change in
discount
rate
assumption
Impact of
increase in
assumption
£'m
Impact of
decrease in
assumption
£'m
0.25%
0.50%
(0.5)
(0.1)
0.6
0.1
The above sensitivity analyses are based on a change in the discount rate 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 in the year to December 2023 is £1.6 million (2022: £1.5 million).
The weighted average duration of the defined benefit obligation is 10.1 years for US plans (2021: 12.1 years) and 9.2 years for
Italian plans (2021: 10.2 years).
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
benefits1
2022
£’m
(1.6)
(1.6)
(4.8)
(8.0)
Defined
pension
benefits
2021
£’m
(1.7)
(1.7)
(5.1)
(8.6)
(16.0)
(17.1)
1 This maturity analysis reflects the current terms of the scheme and does not reflect the planned termination of the US schemes.
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 31 December 2021 and 31 December 2022
Number of
shares
‘m
Ordinary
shares
£’m
Share
premium
£’m
196.8
9.8
–
Ordinary shares in the Company have a par value of 5.00 pence per share (2021: 5.00 pence per share). All issued shares are fully
paid up.
193193
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
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 Group also operates as deferred share bonus plan that requires that a portion of the Short-Term Incentive Plan (STIP) award
to Executive Committee members, which is determined based on current year performance is deferred in shares to be issued
three years after the award date. The value is fixed and the number of shares varies dependent on the share price at vesting.
This is, therefore, treated as cash settled, with the credit being recorded as a liability. Once the shares are issued, the liability is
transferred to retained earnings in equity.
The charges relating to the equity-settled share-based payments is outlined below.
LTIP
Save as you earn
Deferred share bonus plan
Total share-based payments charge
2022
£‘m
0.7
0.1
0.2
1.0
2021
£‘m
0.9
0.1
–
1.0
The charge in respect of the save as you earn scheme (SAYE) of £62,000 (2021: £47,000) is immaterial and, therefore, further
disclosures are not provided.
23.2 LTIP
The charge to the income statement in 2022 in relation to the LTIP was £0.7 million (2021: £0.9 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 where applicable,
the performance targets are met, awards will vest between one and three years after the date of the grant at no cost to the
employee. Further information on the LTIP and the performance targets for each grant are given in the Remuneration report.
The fair value of the awards granted under the LTIP in 2022 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
Risk-free rate
Grant date
Expected life
194
Grant 1
Grant 2
Grant 3
£Nil
£3.11
£3.11
£Nil
£3.11
£2.80
£Nil
£2.64
£2.64
31.29%
31.29%
31.40%
1.6%
1.6%
1.6%
14-Apr-22
14-Apr-22
03-Aug-22
3 Years
3 Years
3 Years
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
Employees other than Executive Directors
LTIPs awarded to Divisional Presidents and Head Office employees under Grant 1 and 3 contain the following performance
targets in respect of between half and two-thirds of the respective award’s value: (a) 2024 Group adjusted EPS must be 36.6p or
more; (b) 2024 Group ROCE must be 13.6% or more; and (c) at least the lower threshold of the Group ESG scorecard conditions
(i.e. Safety, Sustainable Operations, Sustainable Culture and Sustainable Solutions) must be met. Divisional Presidents and
senior reports to Divisional Presidents also have a performance target based on their division’s 2024 adjusted operating profit.
Senior reports to Divisional Presidents do not have the 2024 Group EPS performance targets attached to their LTIP awards.
Divisional Presidents have a service only component in respect of one-third of their awards. Head Office employees and senior
reports to Divisional Presidents have a service only component in respect of half of their awards.
Executive Directors
In addition to the Group adjusted EPS, Group ROCE and Group ESG performance targets described above, Executive Directors
(who received an award under Grant 2) also have a TSR performance target. To fulfil the TSR performance target, they must
achieve at least the “median” in the Net Return Index when ranked against constituents of the FTSE250 index, excluding
investments trusts, as at 1 January 2022. Executive Directors are also subject to a two-year compulsory holding period post-
vesting. For further details, see Directors’ Remuneration report on pages 115 to 139
Movements in the number of outstanding conditional awards of shares are as follows:
At 1 January
Exercised
Granted
Lapsed
Dividend equivalent
At 31 December
2022
'm
2.5
–
1.0
(0.7)
0.1
2.9
2021
'm
2.4
(0.3)
0.9
(0.6)
0.1
2.5
At 31 December, there are no options currently exercisable.
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 and Treasury Shares are as follows:
Number of ordinary shares
Cost to Company (£’m)
Reconciliation of Treasury and Employee Benefit Trust (EBT) shares:
At 1 January
Released during the year
Buy back/purchase of shares
At 31 December
2022
'm
2.0
6.6
2022
'm
1.2
(0.2)
2.0
3.0
2021
'm
0.1
0.3
2021
'm
1.6
(0.4)
0.1
1.2
195195
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
24. Dividends
Amounts recognised as distributions to owners in the year:
Final dividend for financial year ended 31 December 2021 of 8.9 pence (2020: 4.0 pence)
Interim dividend for financial year ended 31 December 2022 of 4.2 pence (2021: 4.0 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 2022 of 9.5 pence (2021: 8.9 pence)
2022
£’m
2021
£’m
17.2
8.2
25.4
18.4
7.8
7.8
15.6
17.4
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 2022.
25. 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 administration costs
Non-cash provision movements
Share-based payments
26. Financial commitments
26.1 Capital commitments
Property, plant and equipment
27. Contingent liabilities
There are no contingent liabilities as at 31 December 2022 or 31 December 2021.
Note
7
11
12
10
10
11
12
2022
£’m
9.3
12.4
7.1
19.6
0.2
0.7
0.2
0.1
0.3
2.1
1.0
53.0
2022
£’m
–
2021
£’m
9.1
11.5
7.0
18.8
1.9
0.2
–
0.2
0.1
(2.4)
1.0
47.4
2021
£’m
1.7
196
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials
28. Events after the balance sheet date
There were no events after the balance sheet date.
29. Related party transactions
The following transactions were carried out with related parties of Tyman plc:
29.1 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 and dividends.
29.2 Key management compensation
The Group considers its Directors to be the key management personnel on the basis that it is the Directors who have the
sole responsibility for planning, directing and controlling the Group. Full details of Directors’ remuneration are given in the
Remuneration report on pages 115 to 139. Key management compensation in accordance with IAS 24 is as follows:
Short-term employee benefits
Share-based payments (including DSBP)
29.3 Directors
2022
£’m
1.6
0.7
2.3
2021
£’m
1.7
0.7
2.4
Full details of individual Directors’ remuneration are given in the Remuneration report on page 127. Directors’ remuneration in
accordance with the requirements of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 is as follows:
Aggregate emoluments
Aggregate gains made on the exercise of share options
30. Subsidiaries
2022
£’m
2.3
–
2.3
2021
£’m
2.4
0.7
3.1
Details of the subsidiaries of the Group as at 31 December 2022 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
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
Lupus Capital Limited
Octroi Group Limited
Profab Access Limited1
Country of
incorporation Nature of business
United Kingdom
Dormant
United Kingdom
Building products
United Kingdom
Dormant
United Kingdom
Building products
United Kingdom
United Kingdom
United Kingdom
Dormant
Dormant
Dormant
United Kingdom
Building products
United Kingdom
Holding company
United Kingdom
Dormant
United Kingdom
Holding company
United Kingdom
Dormant
197197
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
30. Subsidiaries continued
Registered name and office address
Response Electronics Limited1
Response Alarms Limited1
Schlegel Acquisition Holdings Limited
Schlegel Building Products Limited1
Schlegel Limited1
Tyman Equities Limited
Tyman Financial Services Limited1
Tyman Management Limited1
Ventrolla Limited1
Window Fabrication and Fixing Supplies Limited1
Y-cam Solutions Limited1
Zoo Hardware Limited1
1 More London Place, London SE1 2AF
Amesbury Holdings Limited1
Jasper Acquisition Limited1
North American operations
Country of
incorporation Nature of business
United Kingdom
United Kingdom
Dormant
Dormant
United Kingdom
Holding company
United Kingdom
Dormant
United Kingdom
Building products
United Kingdom
Dormant
United Kingdom Financing company
United Kingdom
Holding company
United Kingdom
United Kingdom
Dormant
Dormant
United Kingdom Smart home security
United Kingdom
Dormant
United Kingdom
In Liquidation
United Kingdom
In Liquidation
Bay Adelaide Centre, East Tower, 22 Adelaide Street West, Toronto, ON M5H 4E3
Amesbury Canada Inc1
Canada
Holding company
8005 Dixie Road, Unit 8043, Brampton, Ontario L6T 3V1
AmesburyTruth, Inc
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
Building products
Mexico
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
Centennial Lakes, Office Park V, Suite 800, 3600 Minnesota Drive, Edina, MN 55435
Amesbury Acquisition Holdings (2) Inc1
Amesbury Group Inc1
Amesbury Industries Inc1
Ashland Hardware Holdings, Inc1
Ashland Hardware LLC1
198
United States
Holding company
United States
Holding company
United States
Holding company
United States
Holding company
United States
Building products
Notes to the financial statements continuedFor the year ended 31 December 2022Tyman plcAnnual Report and Accounts 2022Financials Registered name and office address
Balance Systems Inc1
Schlegel Systems Inc1
The Bilco Company1
The Bilco Holding Company1
Truth Hardware Corporation1
Tyman Ventures Inc1
370 James Street, Suite 201, New Haven, CT 06513
Bilco U.K. Limited1
European operations
Nieuwpoortsesteenweg 1028400 Oostende
Schlegel Belgium BVBA1
Bredowstrasse, 33-22113, Hamburg
Schlegel GmbH1
Carl-Zeiss-Strasse, 37 63322 – Rodermark
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
Country of
incorporation Nature of business
United States
Building products
United States
Building products
United States
Holding company
United States
Holding company
United States
Building products
United States
Holding company
United States
Building products
Belgium
Building products
Germany
Building products
Germany
In liquidation
Greece
Building products
Italy
Building products
Constitucion, 84-Poligono Industrial Les Grases, 08980 Sant Feliu De Llobregat,
Barcelona
Giesse Group Iberia S.A.1
Spain
Building products
Other international operations
Enrique Becquerel 4873, Area de promocion el Triangulo, CP 1615, Buenos Aires
Giesse Group Argentina S.A.1
Argentina
Building products
44 Riverside Road, Chipping Norton, NSW 2170
Schlegel Australia Pty (2006) Ltd1
Schlegel Pty Limited1
Australia
Holding company
Australia
Building products
617 Alameda Itatinga, Galpao 2, Parte B, Joapirange II, Valinhos-SP
Giesse Brasil Indústria e Comércio de Ferragens e Acessórios Ltda.1
Brazil
Building products
618 Alameda Itatinga, Galpao 2, Parte B, Joapirange II, Valinhos-SP
Schlegel América Latina - Vedação, Esquadrias e Extrusão Ltda.1
Brazil
Building products
No.151 Linjia of Linlianghe Village, Miaocheng Town, Huairou District, Beijing, 101401
199199
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials Notes to the financial statements continued
For the year ended 31 December 2022
30. Subsidiaries continued
Registered name and office address
Giesse Hardware (Beijing) Co. Ltd.1
Country of
incorporation Nature of business
China
Building products
Second floor of No.3 Building, No.1515 of Juxian Road, Hi-Tech District, Ningbo,
Zhejiang Province
TSA Hardware (Ningbo) Co. imited1
Amesbury (Ningbo) Hardware Trading Co. Ltd1
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
United Arab
Emirates
Schlegel Middle East Building Materials Trading LLC1,2
Building products
Branch operations
Access 360 Innovation Drive, Pendeford Wolverhampton, 54 Business Park, WG9 5GA
Bilco UK Ltd
United Kingdom
Building products
D‐362, MIDC, TTC Industrial Area, Kushket Village, Juinagar, Navi Mumbai 400705
Giesse S.p.A
India
Building products
Istanbul Merkez Şubesi, Halk Sokak Ada IS Merkezi No: 46, Kat: 2 Daire: 4, 34734
Sahrayicedid, Kadikoy, Istanbul
Giesse S.p.A
Turkey
Building products
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.
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.
200
Tyman plcAnnual Report and Accounts 2022Financials Company balance sheet
As at 31 December 2022
Non-current assets
Investment in subsidiaries
Financial assets at fair value through OCI
Deferred tax
Trade receivables
Current assets
Trade and other receivables
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
2022
£’m
2021
£’m
4
10
9
5
5
6
6
11
346.7
345.8
0.2
0.5
101.3
448.7
7.1
0.5
7.6
(0.7)
6.9
455.6
(109.5)
346.1
9.8
(8.7)
345.0
370.2
(0.1)
(25.1)
346.1
–
0.6
64.3
410.7
40.7
0.8
41.5
(0.3)
41.2
451.9
(74.5)
377.4
9.8
(2.6)
370.2
374.6
10.8
(15.2)
377.4
The notes on pages 203 to 207 are an integral part of these financial statements.
The financial statements on pages 201 and 202 were approved by the Board on 1 March 2023 and signed on its behalf by:
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Tyman plc
Company registration number: 02806007
201201
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Company statement of changes in equity
For the year ended 31 December 2022
At 1 January 2021
Total comprehensive income
Profit/(loss) for the year
Share-based payments1
Dividends paid
Issue of own shares to Employee Benefit Trust
Purchase of own shares for Employee Benefit Trust
Transactions with owners
At 31 December 2021
Total comprehensive income
Profit/(loss) for the year
Share-based payments1
Dividends paid
Issue of own shares to Employee Benefit Trust
Purchase of own shares for Employee Benefit Trust
Transactions with owners
At 31 December 2022
Called
up share
capital
£’m
Treasury
reserve
£’m
Retained
earnings
£’m
9.8
(3.4)
374.6
–
–
–
–
–
–
9.8
–
–
–
–
–
–
9.8
–
–
–
1.1
(0.3)
0.8
(2.6)
–
–
–
0.5
(6.6)
(6.1)
(8.7)
10.8
1.5
(15.6)
(1.1)
–
(15.2)
370.2
(0.1)
0.8
(25.4)
(0.5)
–
(25.1)
345.0
Total
£’m
381.0
10.8
1.5
(15.6)
–
(0.3)
(14.4)
377.4
(0.1)
0.8
(25.4)
–
(6.6)
(31.2)
346.1
1 Share-based payments include a tax charge of £0.2 million (2021: tax credit of £0.3 million) and a credit due to issuance of shares under the
deferred share bonus plan of £0.2 million (2021: £0.3 million).
The notes on pages 203 to 207 are an integral part of these financial statements.
202
Tyman plcAnnual Report and Accounts 2022Financials Notes to the Company financial statements
For the year ended 31 December 2022
For general information on the Company, see note 1 to the consolidated financial statements.
1. Accounting policies
1.1 Basis of preparation
The financial statements of Tyman plc have been prepared in accordance with Financial Reporting Standard 101, ‘Reduced
Disclosure Framework’ (FRS 101). The financial statements have been prepared 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 that became effective in the year had a material impact
on the Company.
The financial statements have been prepared on a going concern basis. The Group has performed an assessment of going
concern through modelling several scenarios. The Directors are satisfied that the Group and Company have sufficient resources
to continue in operation for the foreseeable future, a period of not less than twelve months from the date of this report. Further
details can be found in note 2.2 of the Group financial statements.
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. 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. There
are no areas representing critical judgements made by management and no key sources of estimation uncertainty in the
Group’s financial statements.
The Company’s Financial Statements are presented in millions of sterling rounded to the nearest one decimal place.
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.
203203
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials Notes to the Company financial statements continued
For the year ended 31 December 2022
1. Accounting policies continued
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 those expected to be settled beyond 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).
Derivative financial instruments
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 the fair value is positive and liabilities
when the fair value is negative. The Company designates derivatives as either fair value or cash flow hedges.
Fair value hedges
The Company’s fair value hedges consist of cross-currency interest rate swaps. Changes in the fair value of derivatives
designated and qualifying as fair value hedges are recorded in other comprehensive income, together with any changes in fair
value of the hedged asset or liability that are attributable to the hedged risk.
1.4 Investments in subsidiaries
Investments in subsidiaries are stated at cost less any accumulated impairment losses.
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. Borrowing costs are expensed 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.
204
Tyman plcAnnual Report and Accounts 2022Financials 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 auditor’s 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 loss for the financial year ended 31 December 2022 of £0.1 million (2021: £10.8 million
profit). Of the Company profit in 2021, £10.5 million related to dividends received from Group companies.
3. Employees
Other than the Directors, there were no employees of the Company during the year (2021: Nil). Directors’ emoluments are set
out in the Directors’ remuneration report in the Group’s Annual Report on pages 115 to 139.
4. Investments
4.1 Impairment review
An impairment review using a value in use calculation has been performed for each investment. The calculation of the value
in use involves estimation in assumptions used in the calculations, including forecasted cashflows and appropriate discount
rates. The same information as used in the Group goodwill impairment assessment is used for assessing the carrying value of
investments in subsidiaries. For further information, see pages 166 and 167 of the Group financial statements.
4.2 Carrying value of investments
Cost
At 1 January 2021
Capital contribution relating to share-based payments
At 31 December 2021
Capital contribution relating to share-based payments
At 31 December 2022
Impairment
At 1 January 2021
At 31 December 2021
At 31 December 2022
Carrying amount
At 1 January 2021
At 31 December 2021
At 31 December 2022
£’m
345.0
1.3
346.3
1.1
347.4
(0.7)
(0.7)
(0.7)
344.3
345.6
346.7
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.
205205
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Notes to the Company financial statements continued
For the year ended 31 December 2022
5. Debtors
Amounts receivable within one year
Amounts owed by Group undertakings
Amounts receivable after more than one year
Amounts owed by Group undertakings
Corporation tax asset
Note
2022
£’m
7.1
7.1
101.3
–
101.3
2021
£’m
40.7
40.7
64.2
0.1
64.3
The amounts owed by Group undertakings are unsecured and interest free. Of the total amount owed by Group undertakings,
£7.0 million is due to be repaid within the next twelve months and is recorded as current. The remainder of the Group receivable
balance of £101.3 million is either due for repayment beyond the next twelve months or is recoverable on demand but unlikely
to be received within one year so is classified as non-current.
6. Creditors
Amounts falling due within one year
Capitalised borrowing costs
Other creditors
Amounts falling due after more than one year
Private placement notes
Amounts owed to Group undertakings
Bank borrowings
Note
7
2022
£’m
0.1
(0.8)
(0.7)
(98.9)
(0.6)
(10.0)
(109.5)
2021
£’m
–
(0.3)
(0.3)
(33.3)
(0.5)
(40.7)
(74.5)
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$120 million (2021:
US$45 million). Refer to note 18.2.2 of the Group financial statements.
Details of the private placement notes, which are unsecured, are as follows:
2022
£’m
(37.2)
(33.1)
(28.9)
0.3
(98.9)
2021
£’m
(33.3)
–
–
–
(33.3)
Wholly repayable in 2024
Wholly repayable in 2029
Wholly repayable in 2032
Capitalised borrowing costs
206
Tyman plcAnnual Report and Accounts 2022Financials
8. Borrowings
Borrowings relate to a drawdown of the £210 million committed revolving credit facility used to repay the US$55,000,000 private
debt placement in November 2022.
Bank borrowings
9. Deferred tax asset
At 1 January
Income statement credit/(charge)
Tax credit relating to components of other comprehensive income
At 31 December
2022
£’m
(10.0)
(10.0)
2022
£’m
0.6
(0.1)
–
0.5
The deferred tax asset relates to share-based payments. There are no unused tax losses or unused tax credits.
10. Financial instrument
Interest rate swap
Total interest rate swap
2022
£’m
0.2
0.2
2021
£’m
(40.7)
(40.7)
2021
£’m
0.3
0.1
0.2
0.6
2021
£’m
–
–
Refer to note 17 of the Group financial statements for detail of the Interest rate swap.
11. Called up share capital
The share capital of the Company is as set out in note 22 of the Group financial statements.
12. Financial commitments
At 31 December 2022, 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 £0.3 million (2021: £0.5 million) and of lease liabilities was £0.3 million
(2021: £0.5 million). See further details regarding the nature of lease commitments in note 12 of the Group financial statements.
12. Dividends
The dividends of the Company are set out in note 24 of the Group financial statements.
13. 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.
207207
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Alternative Performance Measure reconciliations
APMs used in key performance indicators
Policy
The Group uses adjusted figures as key performance measures in addition to those reported under IFRS, as management
believe these measures enable management and stakeholders to assess the trading performance of the businesses as they
exclude certain items that are considered to be significant in nature and/or quantum, foreign exchange movements and the
impact of acquisitions and disposals. The alternative performance measures (APMs) are consistent with how the businesses’
performance is planned and reported within the internal management reporting to the Board and Operating Committees. Some
of these measures are used for the purpose of setting remuneration targets. The key APMs that the Group uses include like-for-
like (LFL) performance measures and adjusted measures for the income statement together with adjusted financial position and
cash flow measure. Explanations of how they are calculated and how they are reconciled to an IFRS statutory measure are set
out below.
Limitations of APMs
APMs should not be viewed in isolation and are designed to provide supplementary information. These may not be comparable
to similarly labelled measures used by other companies. Other limitations of the Group’s adjusted measures are that they
exclude the amortisation of intangibles acquired in business combinations, but do not similarly exclude the related revenue and
profits, and they exclude the cost of major restructuring programmes but do not similarly exclude the financial benefits derived
from these.
Like-for-like or LFL revenue and adjusted 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 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
Effect of exchange rates
Like-for-like revenue
Adjusted operating profit2
Effect of exchange rates
Like-for-like adjusted operating profit
1 As adjusted to restate at current year average exchange rate.
2 Refer to the consolidated income statement for reconciliation of adjusted operating profit.
2022
£’m
715.5
715.5
94.6
94.6
20211
£’m
635.7
44.5
680.2
90.0
7.0
97.0
208
Tyman plcAnnual Report and Accounts 2022Financials
Adjusted operating profit and adjusted operating margin
Definition
Operating profit before amortisation of acquired intangible assets, impairment of acquired intangible assets, impairment of
goodwill, and adjusting 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.
Adjusting items are excluded from this measure to provide an understanding of the elements of financial performance during
the year to facilitate comparison with prior periods and to assess the trends in financial performance.
Adjusting items include significant one-off redundancy and restructuring costs, transaction costs and integration costs
associated with merger and acquisition activity, any impairment charges for intangible asset upgrades, as well as credits relating
to profit on disposal of businesses, and property provision releases. These items are not considered to be a part of the ordinary
course of the Group’s business.
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, but does not similarly exclude the related revenue and profits generated
from the business acquisition.
Impairment of acquired intangible assets and goodwill is excluded, as this can be a significant non-cash charge.
Reconciliation/calculation
Adjusted operating profit
Revenue
Adjusted operating margin (%)
2022
£’m
94.6
715.5
13.2%
2021
£’m
90.0
635.7
14.2%
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, adjusting 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. This metric is used in assessing
the Directors’ remuneration, see Directors’ Remuneration report on page 115.
Reconciliation/calculation
Profit before taxation
Adjusting items
(Gain)/loss on revaluation of derivative instrument
Amortisation of borrowing costs
Amortisation of acquired intangible assets
Adjusted profit before taxation
Income tax charge
Add back: Adjusted tax effect1
Adjusted profit after taxation
2022
£’m
61.4
6.3
(0.1)
0.6
17.6
85.8
(13.6)
(4.9)
67.3
2021
£’m
64.0
(0.6)
0.1
0.5
17.5
81.5
(14.4)
(4.4)
62.7
1 Tax effect of adjusting 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.
209209
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Alternative Performance Measure reconciliations continued
Adjusted earnings per share
Definition
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. This metric is used in assessing the
Directors’ remuneration, see Directors’ Remuneration report on page 115.
Reconciliation/calculation
Adjusted profit after taxation £'m
Weighted average number of shares – basic
Weighted average number of shares – diluted
Basic adjusted earnings per share
Diluted adjusted earnings per share
Return on capital employed (ROCE)
Definition
2022
67.3
194.2
195.2
34.7p
34.5p
2021
62.7
195.4
196.1
32.1p
32.0p
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. This metric is
used in assessing the Directors’ remuneration, see Directors’ Remuneration report on page 115.
Reconciliation/calculation
Adjusted operating profit
Average capital employed
ROCE (%)
Average capital employed
Inventories
Trade and other receivables
Intangible assets
Property, plant & equipment
Right-of-use asset
Goodwill
Deferred tax asset
Trade and other payables
Tax liabilities
Provisions – current
Provisions non – current
Deferred tax liabilities
Financial asset at FV through P&L
Total capital employed
Adjustment to 13-month average
Average capital employed
210
2022
£’m
94.6
710.7
13.3%
2021
£’m
90.0
619.4
14.5%
153.1
137.8
81.4
57.7
74.6
57.3
399.3
1.7
(88.2)
(1.8)
(5.0)
(2.9)
(6.9)
1.2
721.5
(10.8)
710.7
81.0
66.8
63.5
52.0
363.3
4.2
(112.8)
(6.0)
(1.4)
(4.8)
(12.1)
1.1
632.6
(13.2)
619.4
Tyman plcAnnual Report and Accounts 2022Financials
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
Basic adjusted earnings per share (p)
Total dividend per share (p)
Dividend cover (x)
2022
34.7
13.7
2.5x
2021
32.1
12.9
2.5x
Adjusted operating cash conversion and adjusted operating cash flow
Definition
Adjusted operating cash flow
Net cash generated from operations before income tax paid, adjusting 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.
Adjusted operating cash conversion
Adjusted operating 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
Adjusting item cash costs
Pension contributions
Proceeds on disposal of PPE
Payments to acquire PPE and intangible assets
Adjusted operating cash flow
Adjusted operating cash flow
Adjusted operating profit
Adjusted operating cash conversion (%)
2022
£’m
60.6
21.5
1.8
0.2
0.1
(24.1)
60.1
60.1
94.6
2021
£’m
57.0
17.7
0.2
2.8
0.8
(20.6)
57.9
57.9
90.0
63.5%
64.3%
211211
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
Alternative Performance Measure reconciliations continued
Free cash flow
Definition
Adjusted operating cash flow after deducting pension contributions, income tax paid, net interest paid and adjusted 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 38 for reconciliation between adjusted operating cash flow and free cash flow.
Covenant net interest
Definition
Covenant net interest is interest from overdraft plus interest from loans less interest income from short term deposits.
Purpose
This measure is used in the covenant metric of interest cover
Reconciliation/calculation
Interest from overdrafts
Interest from loans
Foreign exchange difference on borrowings
Interest income from short term deposits
Covenant net interest
Covenant EBITDA and covenant adjusted EBITDA
Definition
Covenant EBITDA
2022
£’m
0.1
6.9
(0.2)
(0.9)
5.9
2021
£’m
–
5.8
–
–
5.8
Adjusted operating profit with depreciation, amortisation of computer software, and share-based payments expenses added
back, less RoU depreciation and interest payable on lease liabilities.
Covenant 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 of property, plant and equipment
Amortisation of computer software
Interest payable on lease liabilities
ROU depreciation
Share-based payments – equity settled
2022
£’m
94.6
19.5
2.0
(3.0)
(7.1)
0.8
2021
£’m
90.0
11.5
1.3
(1.2)
–
1.0
Covenant EBITDA and covenant adjusted EBITDA
106.8
102.6
212
Tyman plcAnnual Report and Accounts 2022Financials
Interest cover
Definition
Covenant 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
Covenant EBITDA
Net interest
Interest cover (x)
2022
£’m
106.8
5.9
18.2x
2021
£’m
101.4
5.8
17.4x
Gross debt and Adjusted gross debt
Definition
Gross debt is borrowings and lease liabilities.
Adjusted gross debt is gross debt, with capitalised borrowing costs 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
Gross debt
Capitalised borrowing costs
Adjusted gross debt
2022
£’m
(188.4)
(61.7)
(250.1)
(2.1)
(252.2)
2021
£’m
(168.0)
(54.8)
(222.8)
(0.7)
(223.5)
Adjusted net debt and covenant net debt
Definition
Interest-bearing loans and borrowings, net of cash and cash equivalents, plus unamortised borrowing costs and lease liabilities
added back, adjusted to calculate the covenant net debt used in the leverage calculation as per the covenant agreement.
Purpose
This gives a measure of the gross amount owed to lenders, without the effect of unamortised borrowing costs.
Reconciliation/calculation
Net debt
Lease liabilities
Capitalised borrowing costs
Adjusted net debt
Adjustment to weighted average exchange rate
Covenant net debt
2022
£’m
2021
£’m
(175.5)
(145.8)
61.7
(2.1)
(115.9)
4.4
(111.5)
54.8
(0.7)
(91.7)
0.7
(91.0)
213213
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
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
Covenant adjusted net debt (at average exchange rate)
Covenant adjusted EBITDA
Leverage (x)
Adjusted tax charge
Definition
2022
£’m
111.5
106.8
1.0x
2021
£’m
91.0
102.6
0.9x
Tax charge adjusted for the tax effect of adjusted 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 adjusting items
Adjusted tax charge
2022
£’m
(13.6)
(4.9)
(18.5)
2021
£’m
(14.4)
(4.4)
(18.8)
214
Tyman plcAnnual Report and Accounts 2022Financials
Adjusted effective tax rate
Definition
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 (%)
2022
£’m
(18.5)
85.8
2021
£’m
(18.8)
81.5
(21.6%)
(23.1%)
Adjusted selling, general and administrative expenses
Definition
Selling, general and administrative expenses before adjusting items, amortisation of acquired intangible assets, impairment of
acquired intangible assets and impairment of acquired goodwill.
Purpose
This measure is used to evaluate the selling, general and administrative expenses of the business excluding the effect of
adjusting items and amortisation of acquired intangible assets, which is a significant charge that is not directly affected by
trading.
Reconciliation/calculation
Selling, general and administrative expenses
Adjusting items
Amortisation of acquired intangible assets
Adjusted selling, general and administrative expenses
2022
£’m
2021
£’m
(151.2)
(138.6)
6.3
17.6
(0.6)
17.5
(127.3)
(121.7)
215215
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials
GRI Standard Content Index
This report has been prepared with reference to the GRI Standards:
General Disclosures 2021 (GRI 2)
Disclosure
1. The Organisation and Reporting Practices
Organisational details
Entities included in the organisation’s sustainability reporting
Reporting period, frequency and contact point
Restatements of information
External assurance
2. Activities and Workers
Activities, value chain and other business relationships
Employees
Workers who are not employees
3. Governance
Governance structure and composition
Nomination and selection of the highest corporate body
Chair of the highest corporate body
Role of the highest governance body in overseeing the management of
impacts
Delegation of responsibility for managing impacts
Role of the highest governance body in sustainability reporting
Conflicts of interest
Communication of critical concerns
Collective knowledge of the highest governance body
Evaluation of the performance of the highest governance body
Remuneration policies
Process to determine remuneration
Annual total compensation ratio
4. Strategy, policies and practices
Statement of sustainable development policy
Policy commitments
Embedding policy commitments
Processes to remediate negative impacts
Mechanisms for seeking advice and raising concerns
Compliance with laws and regulations
Membership associations
5. Stakeholder engagement
Approach to stakeholder engagement
Collective bargaining agreements
GRI
code
2–1
2–2
2–3
2–4
2–5
2–6
2–7
2–8
2–9
2–10
2–11
2–12
2–13
2–14
2–15
2–16
2–17
2–18
2–19
2–20
2–21
2–22
2–23
2–24
2–25
2–26
2–27
2–28
2–29
2–30
Page
18
198
–
67, 72
–
8–18
74–75
75
88–89, 95–104
105–107
95–104
51, 100–101
51, 70, 100–101
51
88–89, 100
74, 100–101
88–89
102
115–139
115–117
136
https://www.tymanplc.com/sustainability
https://www.tymanplc.com/sustainability
20–22, 50–78
50–78
74
48, 72
78
80–83
Not disclosed
216
Tyman plcAnnual Report and Accounts 2022Financials Tyman material topics 2021 (GRI 3)
Disclosure
Disclosure of material topics
Process to determine material impacts
List of material topics
Management of material topics
Circular economy
GRI-301 Materials 2016
Packaging and wate
GRI–301 Materials 2016
GRI–306 Effluents and waste 2016
GRI–306 Waste 2020
Material sourcing
GRI–408 Child labour 2016
GRI–409 Forced or compulsory labour
GRI–308 Supplier environmental assessment
GRI–414 Supplier social assessment
GRI–301 Materials 2016
GRI–407 Freedom of association and collective bargaining
Product innovation
GRI–201 Economic performance
GRI–416 Customer health and safety
GRI–301 Materials 2016
GRI–305 Emissions 2016
GRI–413 Local communities 2016
Employee health, safety and wellbeing
Occupational health and safety 2018
Climate change and greenhouse gas emissions
GRI–302 Energy 2016
GRI–305 Emissions 2016
Energy management
GRI–302 Energy 2016
Water stewardship
GRI–303 Water 2016
Ethical business practices
GRI–205 Anti–corruption
GRI–206 Anti–competitive behaviour
GRI–415 Public policy
Diversity and inclusion
GRI–405 Diversity and equal opportunity 2016
GRI–406 Non–discrimination
Local communities
GRI–413 Local communities 2016
Training and development
GRI–404 Training and education
GRI
code
Page
3–1
3–2
3–3
301
301
306
306
408
409
308
414
301
407
201
416
201
305
413
403
302
305
302
303
205
206
415
405
406
413
404
https://www.tymanplc.com/sustainability/
materiality-exercise
https://www.tymanplc.com/sustainability/
materiality-exercise
50–78
78
67–68, 78
73
73
78, https://www.tymanplc.com/
sustainability/sustainable-culture/ethics
78, https://www.tymanplc.com/
sustainability/sustainable-culture/ethics
–
–
–
Not disclosed
77
77–78
78
77–78
77
70–72
67–68
67–68
72
72
74, https://www.tymanplc.com/
sustainability/sustainable-culture/ethics
74, https://www.tymanplc.com/
sustainability/sustainable-culture/ethics
92
74
74
76
74
217217
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials Definitions and glossary of terms
AGM
APM
ARGE
BEIS
BPR
Bps
BREEAM
Annual General Meeting
Alternative performance measure
European Federation of Associations of Locks & Builders Hardware Manufacturers
UK Department for Business, Energy and Industrial Strategy
Tyman internal business performance reviews
Basis points
Building research establishment environmental assessment method (building sustainability
certification scheme developed in the UK)
BSI Kitemark
UK product and service quality trade mark, owned and operated by the British Standards Institution
C2C
CAGR
CGU
CHIC
CPA
CO2
DEFRA
DSBP
EAP
Cradle to Cradle product certification scheme for safer, more sustainable products
Compound annual growth rate
Cash generating unit
Concealed hardware innovative components
Construction Products Association
Carbon dioxide
UK Department of Food and Environmental Affairs
Deferred share bonus plan
Employee Assistance Programme (counselling and support services for employee wellbeing)
EB Trust (EBT)
The Tyman employees’ benefit trust
EBITDA
Earnings before interest, taxation, depreciation and amortisation
EPD
EPS
ERP
ESG
ESPP
ExCo
FCA
FTE
FVPL
GAAP
GCC
GDPR
GHG
GRI
HSS
IASB
IEA
IFRIC
IFRS
Environmental product declaration
Earnings per share
Enterprise resource planning
Environmental, social and governance
Employee stock service plan
Executive Committee
Financial Conduct Authority
Full time equivalent (headcount)
Fair value through profit or loss
Generally accepted accounting principles
Gulf Cooperation Council
General data protection regulation
Greenhouse gas (emissions) arising from direct operations and/or indirectly via the value chain
Global Reporting Initiative – framework providing a common language and accepted definitions used
in sustainability reporting
Health, safety and sustainability
International Accounting Standards Board
International Energy Agency
International Financial Reporting Interpretations Committee
International Financial Reporting Standards
IIA Code of Practice
The Chartered Institute of Internal Auditors Code of Practice
Intergovernmental panel on climate change
International Organization for Standardization standard for environmental management systems
International Organization for Standardization standard for quality management systems
Key performance indicator
Leadership in energy and environmental design standards (building sustainability certification scheme
developed in the US)
IPCC
ISO 14001
ISO 9000
KPI
LEED
218
Tyman plcAnnual Report and Accounts 2022Financials LFL
LIBOR
LOTO
LTI
LTIFR
LTIP
LTM
M&A
NAHB
NED
NGFS
NPD
OCR
OECD
OEM
PMI
PPE
ROAI
RCF
RMI
ROCE
ROU
SASB
SAYE
SBT
SBTi
SEA
SECR
SKU
Like-for-like
London inter-bank offered rate
Lock Out Tag Out
Lost time incident
Lost time incident frequency rate - a core safety metric expressing the number of lost time incidents
as a ratio per 1 million hours worked
Long term incentive plan
Last twelve months
Mergers and acquisitions
The National Association of Home Builders
Non-executive director
Network for greening the financial system
New product development
Organisation Capability Review
Organisation for Economic Co-operation and Development
Original equipment manufacturer
Purchasing Managers’ Index
Property, plant and equipment
Return on acquisition investment
Revolving credit facility
Renovation, maintenance and improvement
Return on capital employed
Right of use
Sustainability Accounting Standards Board
Save as you earn
Science Based Target
Science Based Target initiative
UK’s Surface Engineering Association
UK Government’s streamlined energy and carbon reporting
Stock keeping unit
Smartware
Integrated and mechanical and electronic security solutions
SONIA
STEM
STIP
TCFD
TCO2e
TFR
TRIR
TSR
UKAS
UN SDG
Sterling Over Night Index Average
Science, Technology, Engineering and Mathematics
Short term incentive plan
Taskforce on climate-related financial disclosures
Tonnes of CO2 equivalent (a standard measure for carbon emissions)
Trattamento di fine Rapporto (Italian pension scheme)
Total recordable incident rate (a core safety metric including lost time and other recordable incidents
involving restricted duty or medical intervention beyond first aid, expressed as a ratio per 1 million
hours worked)
Total shareholder return
UK Accreditation Service
United Nations Sustainable Development Goals
US EPA’s EEIO
US Environmental Protection Agency’s Environmentally-Extended Input-Output
USPP
VIU
US Private Placement
Value in use
219219
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials Roundings and exchange rates
Exchange rates
The following foreign exchange rates have been used in the financial information to translate amounts into Sterling:
Closing Rates:
US dollars
Euros
Australian dollars
Canadian dollars
Brazilian Real
Average Rates:
US dollars
Euros
Australian dollars
Canadian dollars
Brazilian Real
Roundings
2022
1.2097
1.1298
1.7743
1.6386
6.3937
2022
1.2370
1.1732
1.7795
1.6078
6.3857
2021
1.3512
1.1912
1.8607
1.7159
7.5285
2021
1.3757
1.1631
1.8321
1.7244
7.4216
Percentage numbers have been calculated using unrounded figures, which may lead to small differences in some figures and
percentages quoted.
220
Tyman plcAnnual Report and Accounts 2022Financials Five-year summary
Statutory measures
Revenue
Net finance costs
Profit before taxation
Taxation
Profit after taxation
2022
£’m
715.5
(9.3)
61.4
(13.6)
47.8
2021
£’m
635.7
(9.1)
64.0
(14.4)
49.6
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)
26.4
Total number of shares in issue (’000)
196,762
196,762
196,762
196,762
196,762
Dividends per share declared (p)
Average monthly number of employees
13.7p
4,135
12.90p
4,295
4.00p
4,035
3.85p
4,146
12.00p
4,303
APMs and KPIs
LFL revenue growth (%)1
LFL adjusted operating profit 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
1 See Alternative performance measures on pages 208 to 215.
2022
5.2%
(3.2%)
94.6
13.2%
85.8
(115.9)
34.7
13.3%
63.5%
1.0x
2021
17.4%
15.6%
90.0
14.2%
81.5
(91.7)
32.1p
14.5%
64.3%
0.9x
2020
(6.0)%
(5.5%)
80.3
14.0%
68.4
(100.6)
27.2p
12.3%
2019
(1.8)%
(4.8%)
85.4
13.9%
71.0
(164.5)
27.5p
12.0%
130.9%
132.2%
1.1x
1.7x
2018
2.7%
(4.8%)
83.6
14.1%
72.7
(210.7)
27.7p
13.4%
92.4%
2.0x
221221
Annual Report and Accounts 2022Tyman plcAnnual Report and Accounts 2022Tyman plcFinancials Shareholder notes
222
Tyman plcAnnual Report and Accounts 2022Financials The production of this report supports the work of the Woodland Trust,
the UK’s leading woodland conservation charity. Each tree planted will
grow into a vital carbon store, helping to reduce environmental impact as
well as creating natural havens for wildlife and people.
Tyman plc
29 Queen Anne’s Gate
London
SW1H 9BU
enquiries@tymanplc.com
www.tymanplc.com