Annual Report 2020
Delivering
Growth
Delivering Growth to
Our
Customers
Our
Partners
Our
Shareholders
Contents
Overview
Operational and Financial Highlights
Investment Case
Chairman’s Report
Chief Executive’s Report
Strategic Review
Our Strategy
Business Model
Key Performance Indicators
Risk Management
Sustainability and Governance Report
Performance Review
Financial Review
Commercial & Clinical
page 52
Product Access
page 54
Supply Chain & Retail
page 56
2
6
8
12
16
18
20
24
34
48
Governance
59
Company Information
60
Board of Directors
62
Corporate Governance Report
Audit, Risk and Compliance Committee Report
71
Nominations and Governance Committee Report 75
79
Remuneration Committee Report
95
Directors’ Report
Financial Statements
Independent Auditors’ Report
Group Income Statement
Group Statement of Comprehensive Income
Group Balance Sheet
Company Balance Sheet
Group Cash Flow Statement
Company Cash Flow Statement
Group Statement of Changes in Equity
Company Statement of Changes in Equity
Accounting Policies
Notes to the Financial Statements
Alternative Performance Measures
Glossary of Terms
104
111
112
113
114
115
116
117
118
119
132
189
194
Operational and
Financial Highlights
Delivering M&A
+ US expansion
Completed four acquisitions
with a strong strategic fit,
increasing US market presence,
retail pharmacy market share
and further strengthening our
digital capability
Adjusted EPS
Progressive Dividend
€4.2m
Subject to shareholder
approval at the AGM
12.6 (cent)
On a like for like basis, an
increase of 26% in adjusted
EPS which reflects the strong
performance in the year and the
weighted average number
of shares following the IPO
in July 2019
Gross Profit
€217.3m
EBITDA
€66.7m
20.3% increase year on year,
rising from €180.6m
to €217.3m
13.9% increase year
on year, rising from
€58.6m to €66.7m
Organic Growth
6.7%
Strong gross profit growth
across the Group
ROCE
18.9%
Strong growth in ROCE,
increasing from 17.3%
to 18.9%
Leverage
0.6x
Critical Role
Played in
Covid-19 Crisis
Robust Balance Sheet and
liquidity profile enhanced with
new five-year bank facility,
provides a strong capital base
to support the growth strategy
Critical role played during the
Covid-19 pandemic by ensuring
continuity in the supply of
medicines, medical devices,
and related services to the
healthcare sector
Delivering Growth
EBITDA
€’m
Gross Profit
€’m
80
60
40
20
0
250
200
150
100
50
0
ROCE
%
19
18.5
18
17.5
17
16.5
16
15.5
15
14.5
2018 2019 2020
2018 2019 2020
2018 2019 2020
Global Growth
50%
Revenue earned outside of
Ireland has increased year on
year from €0.2bn to €0.3bn
Summary Financial Results - Financial Year Ended 31 December 2020
Renewed Sustainability
Vision for 2020
and beyond
Growth
Year ended 31 December
2020
€’000
2019
€’000
Reported
Revenue
Gross profit
Gross profit margin
EBITDA1
Operating profit
Profit before tax excluding exceptional items
Net bank (debt)/cash1
Basic EPS (cent)
Like for like adjusted EPS (cent)1
9.5%
20.3%
13.9%
41.6%
20.8%
1,823,854
1,665,283
217,252
180,602
11.9%
66,713
39,944
38,367
(34,419)
10.6
12.6
10.8%
58,555
28,207
31,770
26,622
11.5
10.0
Constant
Currency2
9.7%
20.6%
14.3%
42.2%
21.2%
1. Additional information in relation to Alternative Performance Measures (APMs) are set out on pages 189 to 193.
2. Constant currency growth is calculated by applying the prior year's actual exchange rate to the current year's result.
2
Overview
3
Uniphar plc Annual Report 2020
Operational and Financial Highlights continued
Delivering a pan-European platform
Providing sales, marketing
and distribution solutions to
manufacturers
Focused on speciality pharma
and medical technologies
Commercial
& Clinical
Sourcing and supply of unlicensed
medicines for pharmacy customers
Managing MAPs for global
manufacturers
Serving 160+ countries
Providing
expertise
throughout
the product
lifecycle
Product
Access
Key player in Pharma Supply Chain
Supporting a network of
346 pharmacies
#1 market position in wholesale
in Ireland
Supply Chain
& Retail
Diversified healthcare services business
focused on growth markets
Divisional Gross Profit
Gross Profit
€’m
220
200
180
160
140
120
100
80
60
40
20
0
2018 2019 2020
€94.6m
44%
€92.2m
42%
€30.4m
14%
Commercial & Clinical
Product Access
Supply Chain & Retail
2,600+
Over 2,600
people globally
600k
Over 600,000
HCP interactions
achieved in 2020
61 Managing EAPs for
61 global manufacturers
worldwide
€
6.7%
Organic gross
profit growth
achieved in 2020
€
€217m
Gross profit of €217m,
20% increase year
on year
€1.8bn
In 2020 the Group
generated revenue
of €1.8bn
4
Uniphar plc Annual Report 2020
Overview
5
Investment
Case
Our Strategy
Read more on
page 16
Compelling
Market
Opportunity
Experienced
Industry
Team
Integrated
Model
Uniphar
Investment
Case
Cash
Generation
Platform for
Growth
Competitive
Edge
Experienced
Industry
Team
Cash
Generation
Competitive
Edge
Platform for
Growth
Integrated
Model
Compelling
Market
Opportunity
6
Uniphar plc Annual Report 2020
Overview
7
Diversified healthcare
services business operating
in growth markets
Executive management with many years of relevant industry experience, working with technical expertise and further enhanced by strong specialist market experience Strong free cash flow generation delivering growth Robust liquidity position with capital allocation prioritised to support sustainable organic growth, accretive M&A and a progressive dividend policy Longstanding manufacturer relationships Sophisticated digital capabilities High-tech distribution infrastructure A pan-European Commercial & Clinical service offering for our manufacturer clients Growing our Product Access service on a global basis Providing a multi-geography platform and expanded service offerings to new and existing manufacturer clients End to end solution across the value chain from early stage development and throughout the product lifecycle Leveraging existing facilities, technology and relationships to take advantage of substantial market opportunities Increasing requirements for speciality products Continued growth in outsourcing by manufacturers Highly fragmented European market Chairman’s
Report
Robust capital base
underpinned by
strong liquidity and
cash conversion
Performance Review
Read more on page 47
"
Uniphar continues to deliver on our
growth strategy with expansion on
both a geographic and market share
basis, delivering a strong and resilient
financial performance. "
€1.8bn
Group revenues across the
three divisions increased
to over €1.8bn with profit
before tax and exceptional
items up 20.8% to €38.4m
3
New Independent
Non-Executive Directors
appointed to the Board
€4.2m
The Board is recommending
a final dividend of €4.2m,
reflecting another positive
return for our shareholders
Significant Progress
In 2020, Group revenues across
the three divisions increased
to €1,823.9m with profit before
tax and exceptional items up
20.8% to €38.4m. Despite the
disruption caused by the Covid-19
pandemic, the Group completed
four acquisitions with two of these
based in the US. In keeping with
our focus on digital capabilities and
in a year where the world has seen
increasing reliance on technology,
acquisitions in the areas of patient-
centric technologies and telehealth,
further enhances our ability to grow
and meet new market demands. In
addition, the Group has continued
to invest in the existing businesses,
strengthening teams and ensuring
the development of market
leading technologies.
Strategy & Acquisitions
We have continued to focus on
our strategy as stated at the time
of the IPO in July 2019. We have
worked this year to deliver on
our promises, building on our
global and European platforms for
Product Access and Commercial
& Clinical respectively, through
acquisitions and organic growth,
while at the same time investing in
our Supply Chain & Retail division.
The Group‘s acquisitions during
the year included the Hickey’s
Pharmacy Group which bolsters
our already strong position in
the Irish retail pharmacy market.
Innerstrength Limited enhances
our ability to manage and track
patient adherence and US-based
telehealth company Diligent
Health Solutions provides us with
deep technical and clinical skills
in the management of medical
information services. Our other
US acquisition, RRD International,
offers a highly experienced team
with deep regulatory expertise in
early stage drug development.
Capital Structure
The Group maintains a robust
capital base underpinned by a
strong liquidity position which
supports the delivery of the
Group’s strategic plan. During
the year, the Group completed
a planned refinance of our
banking facilities with our existing
syndicated banking partners.
The new five-year agreement almost
doubles the Group’s available
facilities, providing a €150.0m
revolving credit facility and a €90.0m
uncommitted accordion facility.
Strong cash flow performance saw
us finish the year with €34.4m net
bank debt, maintaining a modest
leverage of 0.6x.
Impact of Covid-19 Pandemic
Since the onset of Covid-19 in
March 2020, the pandemic has
highlighted the critical role that
the Group plays in the healthcare
infrastructure. The diversity in
our service offerings enabled the
Group to meet the challenges and
respond to the changing demands
across all three divisions. The
Group’s priority from the outset
was to do everything possible
to safeguard our colleagues and
facilities, while ensuring that we
supported our customers and
their patients during this difficult
time. Through the commitment,
hard work and adaptability of
our people, we were able to
ensure continuity in the supply
of medicines, medical devices
and related services to the
healthcare sector.
The Group played a number of
essential roles in the support
of several key Covid-19
projects across key markets.
These included the sourcing of
essential medicines, critical care
equipment, and PPE, in addition
to supporting essential Covid-19
testing programmes.
On behalf of the Board, I
would like to thank our Uniphar
colleagues for their dedication and
commitment in working through
this crisis and supporting their
national healthcare systems in
combating the virus.
Sustainability and
Governance
The Board has always been
committed to high standards
of corporate governance, 2020
and early 2021 saw a number
of further enhancements to the
corporate governance framework
of the Group. The independent
representation on the Board was
increased with the appointment
of Jeff Berkowitz in September
2020, who brings a wealth of
US pharma and healthcare
experience, together with the
recent appointments of Jim Gaul
and Liz Hoctor in January 2021,
enhancing both the skills and
the depth of experience on the
Board. This transition to greater
independence has also seen a
number of long-standing and
valued directors step down from
the Board. The AGM in May 2020
saw the resignation of John Holly,
our longest serving Board member
and highly respected member
of the pharmacy community in
Ireland. September 2020, saw
Mark Moran and Heather Ann
McSharry step down from the
Board, each of whom brought
valuable experience and insight
to the Board during their terms.
In January 2021, Marie McConn
resigned following 11 years on
the Board and Padraic Staunton
also notified the Board that he
is to retire from the Board at this
year’s AGM in May. Both Marie
and Padraic supported the Board
and shareholders through very
challenging times in the early
years of their terms and we are
hugely grateful for their support
and guidance during that time and
throughout their terms. On behalf
of the Board, the Executive team
and the wider Uniphar Group, I
would like to thank each of our
outgoing Directors for their valued
contributions and loyal service
and wish them all the very best in
the future.
In early 2021, the Board also
refreshed the composition of each
of its committees, ensuring greater
independent representation on
each committee.
In addition to governance
enhancements, 2020 saw a
significant focus on the wider
sustainability agenda of the Group.
We are proud to have taken our
first step in carbon emissions
reporting with our first response
submitted to the Carbon Disclosure
Project (CDP) in 2020, together
with implementing new governance
structures for the monitoring,
assessing, and reporting of
sustainability initiatives within
the business. 2020 was also a
year where wellness played a key
role, with our teams partaking in
numerous initiatives to ensure we
maintained a sense of togetherness
while working apart.
8
Overview
9
Uniphar plc Annual Report 2020
The “can-do” culture in
Uniphar shone through
this year with the huge
efforts of our teams in
ensuring that essential
services were maintained,
that businesses adapted
quickly to the challenges
presented by Covid-19
and that our people
remained safe, well and
connected throughout
the year
Chairman’s Report continued
The Group completed four
acquisitions with a strong strategic
fit, two in Ireland and two in the US
These initiatives culminated in our
Relay for Hope event in December
which raised a phenomenal
€230,000 for cancer charities
around the world.
Culture
A positive culture grounded in
strong ethical values is essential at
all times, but particularly when
our business, our people, our
stakeholders and our communities
face challenges such as those that
2020 brought. The “can-do” culture
in Uniphar shone through this year
with the huge efforts of our teams
in ensuring that essential services
were maintained, that businesses
adapted quickly to the challenges
presented by Covid-19 and that
our people remained safe, well and
connected throughout the year. Our
managers are the guardians of our
culture and they worked closely
with their teams this year to ensure
that Uniphar’s values and integrity
remained in focus as we adapted
to new ways of working.
Dividend
Notwithstanding the global
challenges faced this year, and in
line with our commitments made
at the time of the IPO, the Board
is recommending a final dividend
of €4.2m. Subject to shareholder
approval at the AGM, the final
dividend will be paid on 17 May
2021 to shareholders who are on
the register at the close of business
on 23 April 2021.
Outlook
In 2021, the Board will continue
to build on the excellent progress
made this year in the areas of
governance and sustainability,
whilst maintaining focus on the
Group’s strategic priorities, with
the business and management
team remaining committed to
maximising the full potential
of our recent acquisitions and
delivering long-term value for all
our stakeholders.
Finally, I would like to take this
opportunity on behalf of the
Board to thank our shareholders,
executive team and all our teams
worldwide for their loyalty, hard
work and dedication during 2020.
Maurice Pratt
Chairman
10
Overview
11
Uniphar plc Annual Report 2020 Chief
Executive’s
Report
"
2020 was a year of strong growth and
development, where we demonstrated the
robustness of our strategy and business
model and the ability of our talented teams
to deliver growth in the most challenging of
circumstances."
20.3%
Gross profit growth of
20.3% with gross profit
margin increasing from
10.8% to 11.9%
€66.7m
EBITDA of €66.7m
increased by 13.9%
in the year
6.7%
Strong organic gross
profit growth across
the Group
The diversity of the services
and expertise provided by the
three divisions, coupled with the
investment in digital solutions
has enabled Uniphar to meet
the challenges presented by the
Covid-19 pandemic. This could not
have been achieved without the
incredible dedication and resilience
of our colleagues around the globe
ensuring continuity in the supply
and distribution of much needed
medicines, medical devices and
related services.
Performance
The Group delivered strong results
across all three divisions with
gross profit growth of 20.3%, and
gross profit margin increasing from
10.8% to 11.9%, demonstrating
the success of the strategic focus
on growth into higher margin
businesses. EBITDA at €66.7m
increased by 13.9% in the year,
through a combination of organic
growth from existing businesses
and the successful integration
of 2019 acquisitions. Organic
gross profit growth of 6.7% was
delivered by the Group, with the
Product Access division returning
an excellent performance of 28.9%
organic gross profit growth.
This high gross profit growth
reflects the strength of the
combined value proposition of
Uniphar and Durbin in the market,
and has resulted in significant
new exclusive access programme
(EAPs) wins.
Return on Capital Employed
(ROCE), a key metric for us, also
increased, reaching 18.9% up
from 17.3%, reflecting the benefit
of strategic investments in recent
years. The significant investment
made during 2020, both from a
capital and acquisitions perspective,
will deliver benefits and growth in
the coming years.
The Group’s strong capital
structure and liquidity position
ensures we are well positioned to
continue to deliver on our strategic
targets, while always maintaining
a focus on future investments. We
finished the year at €34.4m net
bank debt, maintaining a modest
leverage of 0.6x.
Delivering Our Strategy
The strategy of the Group
continues to focus on the pursuit
of growth, both organically and
through acquisitions.
The diversity of the services and expertise
provided by the three divisions, coupled
with the investment in digital solutions has
enabled Uniphar to meet the challenges
presented by the Covid-19 pandemic
Performance
Review
Read more on
page 47
2020 was a busy year in
terms of new acquisitions and
delivering growth from our recent
acquisitions, together with our
more established businesses.
In 2019, we developed a global
platform in our Product Access
division through the acquisition of
Durbin, to allow us to build a world
class global managed access
business. During 2020, Durbin
has been integrated into the wider
Product Access division and the
enhanced attractiveness of the
combined offering is evident in the
strong organic gross profit growth
this year.
In March 2020, the Group acquired
Innerstrength, which provides
us with the enhanced ability to
deliver digitally enabled ‘patient-
centric’ EAPs. The Innerstrength
technology empowers healthcare
professionals to deliver unique
personalised programmes for
individual patients. It gives us a
platform to broaden our support
services to the Pharma industry,
around patient awareness, and
education to drive adherence.
Innerstrength also brings with
it some world class innovative
technologists, who will be leading
our digital development in the
Product Access division.
In September 2020, the Group
announced the acquisition
of Diligent Health Solutions
(Diligent) a US-based healthcare
communications company,
providing enhanced contact centre
services for both pharmaceutical
and MedTech clients. A telehealth
company, Diligent focuses on the
delivery of medical information to
patients, healthcare professionals
and payors. Diligent’s services
support and enhance our
current offering across both our
Commercial & Clinical and Product
Access divisions and furthers
our strategy of providing digitally
enabled outsourced service
solutions. The acquisition builds
on our existing presence in the
US and adds new capabilities
to deliver exclusive access
programmes globally.
In November 2020, the Group
announced the acquisition of
the Hickey's Pharmacy Group,
Ireland’s fifth largest retail
pharmacy chain. The acquisition
allows our Supply Chain & Retail
division to leverage our high-tech
scalable infrastructure, increase
the division’s buying power and
consolidates our position as a
leader in the Irish retail pharmacy
market with 346 symbol group
owned and franchised pharmacies
and supported stores.
Finally, in November 2020 we
also completed the acquisition
of RRD International (RRD). RRD
is a US-based pharmaceutical
advisory business providing
outsourced strategic consulting
and execution services throughout
the early stages of a product’s
development. Becoming a truly
global partner for our clients is an
important strategic objective for
the Group. The highly experienced
RRD team, which has supported
the FDA regulatory approval on
a significant number of assets,
brings deep US regulatory insights
which will further accelerate our
growth towards market leadership.
The acquisition marks an
important strategic milestone for
the Group and grows our US team.
Impact of Covid-19
The Covid-19 pandemic has had a
significant impact worldwide and
has fundamentally changed how
businesses operate. The diversity
in our service offerings and the
robustness of our organisational
model enabled the Group to meet
the challenges and respond to
the changing demands in the
markets in which we operate. The
Group played an essential role in
supporting customers and patients
in the continuity of services and
providing innovative solutions to the
challenges presented.
We galvanised all available
resources to keep our facilities
fully operational, our teams
safe, and to continue to deliver
essential services throughout the
Covid-19 crisis.
Divisional Performance
Commercial & Clinical
In the Commercial & Clinical
division, our MedTech business
was affected by the cancellation
of elective surgeries in many
countries as Covid-19 restrictions
were imposed. However, this was
countered by the upsurge in the
requirement for ventilators and
other intensive care equipment,
an area where we have a strong
reputation of providing a world
class service. Equally important was
the team’s commercial knowledge
and ability to adapt quickly to
new areas of activity, such as
automated decontamination and
PPE. Our Pharma business also
delivered a great performance, as
our multichannel digitally enabled
account managers were in a
strong position to serve customers
throughout the pandemic.
12
Overview
13
Uniphar plc Annual Report 2020
Strategic
Review Our Strategy
Business Model
Key Performance Indicators
Risk Management
Sustainability and Governance Report
16
18
20
24
34
Chief Executive’s Report continued
Already operating from home and
online, with established pathways
to connect with healthcare
professionals, they were able
to attract new business and
expand their relationships with
existing clients.
The division’s gross profit grew by
20.1% year on year with organic
gross profit growth of 9.6%.
Product Access
The Product Access division, with
the capabilities of both Uniphar
and Durbin now integrated, won
15 new EAPs. We have also
strengthened the management team
in Product Access and commenced
a programme of digital and IT
investment for Durbin that will put
the Product Access division in a
position to challenge the market
leaders, not only in the MAPs space,
but also support the divisions’
global distribution capabilities for
On Demand and NGO services.
The division’s gross profit grew by
76.9% year on year with organic
gross profit growth of 28.9%, up
from 16% in the prior year.
Supply Chain & Retail
Our Supply Chain & Retail
division has delivered an excellent
performance in Covid-19
challenged circumstances. With
the office-based teams working
from home since March and
stringent measures in place to
keep our operations colleagues
and our facilities safe. The team
maintained a high level of service
to customers throughout and more
independent retail pharmacies
moved towards a Uniphar
supported or symbol group model.
The acquisition of Hickey’s
Pharmacy Group gives our retail
pharmacy group real scale in
the market, while enhancing our
buying power and footprint in
suburban locations.
The division’s gross profit grew by
9.2% year on year.
We are delighted to welcome our
new Chief People Officer, Lorraine
Kenny, in 2021, who will play an
integral part in the development
of our culture and values across
the Group.
Outlook
Looking to 2021, we remain
committed to building a pan-
European offering in our
Commercial & Clinical division,
while growing our Product Access
business through expanding the
capabilities and access to clients
in the US, both of which enhance
our ability to attract new clients and
grow. In Supply Chain & Retail, we
continue to leverage our key assets
and grow our market share.
We will continue to deliver on our
strategy and on the growth we
promised, both organically and
through acquisitions. We will focus
on integrating our 2020 acquisitions
into the business while investing
to maximise growth. In terms of
organic gross profit growth, we
target to deliver double-digit growth
for Product Access, mid-single digit
growth for Commercial & Clinical
and low-single digit growth for
Supply Chain & Retail.
Sustainability remains a strong
focus for us as we mature as a
listed company and put the formal
structures and processes in place
to demonstrate our sustainable
approach to doing business.
Our results this year are evidence
of the effectiveness of the
strategy and of the robustness of
our business model, but also of
the ingenuity, commitment and
resilience of our people.
We believe that the business is
well positioned to deliver on its
commitment to shareholders and
markets to double 2018 pro-forma
EBITDA within five years of listing.
Gerard Rabbette
Chief Executive Officer
Sustainability and Governance
2020 also saw significant progress
in the areas of Sustainability and
Governance, and I am delighted to
include my inaugural Sustainability
Statement in this Report. Whilst
sustainability and responsible
business have always been at the
core of what we do, we made a
number of important structural
changes during 2020 to enhance
the way in which we coordinate,
measure, monitor and report our
sustainability efforts. We established
a Sustainability Council with
individuals from across various
areas of each of our businesses and
identified seven UN Sustainable
Development Goals where we
believe we can make the most
significant impact. We also carried
out a materiality assessment with
our senior management to identify
the areas of sustainability most
relevant to our business and this
resulted in the addition of a fifth
pillar of sustainability – Business
Solutions & Innovation. We took our
first step in carbon reporting with
our first submission to CDP and we
ran a number of initiatives focusing
on wellness and community
involvement, culminating in our
hugely successful Relay for Hope
event which raised €230,000 for
global cancer charities.
In the area of corporate governance,
we saw further significant changes
to the composition of our Board
with the appointment of Jeff
Berkowitz, Jim Gaul and Liz Hoctor
as well as the departure of John
Holly, Mark Moran, Heather Ann
McSharry and Marie McConn.
These further steps towards
greater independence on our
Board, coupled with changes
to the composition of each of
our Committees, demonstrates
our commitment to continued
improvement in our corporate
governance standards.
14
15
Uniphar plc Annual Report 2020
Our
Strategy
"
Uniphar's vision is focused on improving
patient access to pharmaco-medical
products and treatments by enhancing
connectivity between manufacturers
and healthcare stakeholders."
€1.8bn
Revenue of €1.8bn,
9.5% increase
year on year
6.7%
Organic gross profit
growth of 6.7%
achieved
€217.3m
Gross profit of
€217.3m, 20.3%
increase year on year
Growth has been delivered through
the continued implementation of our
key strategic objectives - becoming
a global leader in Product Access,
providing best in class Commercial
& Clinical services on a pan-
European basis and maintaining
and growing our market leadership
position in Supply Chain & Retail
across Ireland. This focus is critical
in enabling us to achieve our goal
to double 2018 pro-forma EBITDA
within five years of IPO.
The unexpected impact of the
global pandemic in 2020 has
underlined the critical nature of
our services and the robustness
of our organisational model. Our
expertise is our strength and the
ability of our teams to respond
quickly to meet customer needs
enabled us to deliver strong growth
despite the difficult circumstances.
Our performance throughout this
challenging time was driven by the
resourcefulness of our teams, the
importance of our long-standing
client relationships and the value of
keeping all healthcare stakeholders
at the centre of what we do.
We are focused on delivering
growth through a combined
organic and acquisitive strategy.
The foundations of our growth are
based on the quality of our people,
the scale of our infrastructure and
our investment in digital innovation.
Each division continues to build on
their key competitive advantages, all
of which are aligned with our core
capabilities: leveraging our wide-
ranging industry expertise, strong
relationships and digital capabilities
to become market leaders in our
target areas.
2020 also saw an increased focus
on our sustainability framework
across the business which will
ensure that our sustainability agenda
and priorities form an integral part of
our planning and decision-making
process. The recent appointment
of our new Chief People Officer will
further support the development of
our teams across our growing
global platform.
Connecting manufacturers to key
healthcare stakeholders continues
to evolve. Through our regulatory
expertise and our investment in
innovation, we believe Uniphar is
well positioned to deliver on these
future opportunities, achieving our
strategic goals.
Padraic Dempsey
Chief Commercial Officer
Pan-European
Path to growth
Focused on delivering
services for both
MedTech and
Pharma clients
Provision of highly
skilled, digitally
enabled teams
Delivering best in class
sales, marketing and
distribution solutions
Therapeutic expertise in
high growth markets
Track record of high
performance growth
Flexible multi-channel
communication mix
Diligent Health
Solutions
Enhanced call
centre capability
Commercial
& Clinical
Product
Access
Global
Path to growth
Market leader in the
provision of unlicensed
and speciality medicines
to specific patients
Capability to deliver to
160+ countries around
the world
Patient-centric
proposition through
our integrated digital
platforms
Increased brand
recognition through
operational excellence
Continued investment in
business development
capabilities
Accelerated US market
penetration
RRD International
Outsourced
product
development
expertise
Innerstrength
Personalised
patient education
platform
Ireland
Path to growth
Market leadership in
pre-wholesale and
wholesale distribution
Growth into higher
margin opportunities
Enhanced strategic
retail footprint
Consolidate and grow
current leadership
positions
Further investment
across our pharmacy
infrastructure
Leveraging digital
infrastructure to
increase additional
value
Hickey’s
Pharmacy Group
Consolidated our
position as leader
in retail pharmacy
Supply Chain
& Retail
16
Strategic Review
17
Uniphar plc Annual Report 2020
Business
Model
Uniphar’s business
model has developed
in line with the
continued outsourcing
trends across both
the pharmaceutical
and medical device
industries.
Our success is driven through
long-term relationships with
multinational clients, where
regulatory expertise and our
focus on innovation has enabled
us to deliver better outcomes
for key healthcare stakeholders.
In a highly regulated market, we
have a deep understanding of the
dynamic healthcare value chain and
detailed insights into patient access
and the complexity of product
commercialisation. This expertise
has given us a strong competitive
advantage in the high growth
speciality product market, where
our highly skilled teams, supply
chain expertise and our scalable
digital platforms enable us to deliver
bespoke solutions to meet the
needs of our clients and customers.
We are a strong strategic partner
across multiple geographies for
both our Pharma and MedTech
clients, who have chosen to
travel with us as we expand
internationally.
What We Do
Uniphar is a trusted global partner to pharmaceutical
and medical device manufacturers, working to
improve patient access to innovative products and
treatments around the world.
160+
Supplying to 160+
countries worldwide.
How We Do It
Strategic Drive
Enabled through our people we are focused
on delivering best in class solutions to our
clients across Commercial & Clinical, Product
Access and Supply Chain & Retail. Our growth
is enabled through geographic expansion, the
extension of our client base and our drive for
market leadership in our chosen areas.
Focused Market Leadership
Continued Client Growth
Scaling Through Digital
How We Create Value
We create value by connecting manufacturers and
key healthcare stakeholders around the globe.
Offering a range of services across the entire
product lifecycle, we benefit from clear cross
selling opportunities across our three divisions.
Our services are underpinned by regulatory
expertise, digital innovation and a constant drive
towards more sustainable business practices.
» Healthcare Professional Network
» Regulatory Expertise
» Improved Patient Access
» Integrated Commercial Solutions
All enhanced by innovative digital technology.
Market Drivers
Growth in
outcome-based
reimbursement
Highly
fragmented
European market
Growing demand
for outsourced
services
Increasing
commercialisation
complexity
What Uniphar Offer
Global
distribution
infrastructure
Multichannel
sales & marketing
Regulatory
expertise
Ability to partner
across multiple
geographies
Outputs
160+ Countries
supplied
200+ Manufacturer
partners
12.6 (cent)
Adjusted EPS
€66.7m
EBITDA
18
Uniphar plc Annual Report 2020
Strategic Review
19
Key Performance
Indicators
The Group has a range of Key Performance Indicators (KPIs) which are used to
monitor Group performance, and measure progress against our strategy
Medium-Term Outlook
Acquisitions are expected to make a meaningful
contribution to gross profit in addition to organic growth
Financial
Key Performance
Indicators
Why we measure it
2020 Performance
Gross Profit (€m)
217.3 180.6
€217.3
2020 2019
Gross profit is viewed by the Board as the best
measure of top-line performance. It allows
management to assess the performance of
the business and is a key profit measure in the
assessment of divisional performance.
EBITDA (€m)
66.7 58.6
€66.7
Free Cash Flow
Conversion
111.0%
Return on Capital
Employed
18.9%
Adjusted Earnings
per Share (cent)
12.6
20
2020 2019
111.0 85.7
2020 2019
18.9 17.3
2020 2019
12.6 14.3
2020 2019
EBITDA provides management with an assessment
of the underlying trading performance of the Group
and excludes transactions that are not reflective of
the ongoing operations of the business, allowing
comparison of the trading performance of the
business across periods and/or with other businesses.
Free cash flow conversion represents the funds
generated from the Group’s ongoing operations.
These funds are available for reinvestment, and for
future acquisitions as part of the Group’s growth
strategy. A strong level of free cash flow conversion
is key to maintaining a strong, liquid balance sheet.
This measure allows management to monitor
business performance, review potential investment
opportunities and the allocation of internal resources.
Adjusted EPS is used to assess the after-
tax underlying performance of the business in
combination with the impact of capital structure
actions on the share base. This is a key measure used
by management to evaluate the businesses operating
performance, generate future operating plans, and
make strategic decisions.
Gross profit has increased by 20.3%, driven by strong organic gross profit growth
of 6.7% in combination with the full year impact of 2019 acquisitions and the
contribution from 2020 acquisitions. This performance includes growth across all
three divisions.
Continued strong EBITDA performance increasing by 13.9% to €66.7m. Growth
in EBITDA is driven by the expansion into higher margin businesses both
organically and through acquisitions, despite Covid-19 challenges. We remain on
track to achieve our strategic objective of doubling 2018 pro-forma EBITDA within
5 years of IPO.
Free cash flow conversion of 111.0%, reflects favourable timings relating
to creditor terms, On Demand contracts and Brexit related stock positions.
A strong performance reflects tight working capital management and
demonstrates strong growth delivered from cash reinvestment.
The Group’s ROCE for 2020 was 18.9%, reflecting the impact of the Group’s
successful integration of acquisitions and strategic global expansion.
The Group’s Adjusted EPS for 2020 was 12.6 cent. Underlying earnings have
increased by 25.1% from €26.3m in 2019 to €32.9m in 2020 driving growth. This
is offset by the full year impact in 2020 of the increase in the number of shares in
issue following the Group’s IPO in July 2019.
Uniphar plc Annual Report 2020
Strategic Review
21
Key Performance Indicators continued
Our Strategy
Read more on
page 16
Non-Financial
Key Performance
Indicators
Number of
Exclusive Access
Programmes
61
Healthcare
Professional
Interactions
600k+
Symbol Group
Pharmacy
Numbers
346
Why we measure it
2020 Performance
61 46
2020 2019
340 580 550
600k 580k
2018 2019 2020
2020 2019
340 580 550
346 287
2018 2019 2020
2020 2019
A key strategic priority of Product Access is
the successful operation of exclusive access
programmes (EAPs), enabling the connection
of the manufacturer to the patient. The number
of these programmes in operation during the
year is a key metric in measuring progress
against this priority, as well as the strength of our
manufacturer relationships.
In Commercial & Clinical, interactions with
healthcare professionals form an integral part in
connecting the manufacturer to the patient and the
success of the business.
The Uniphar Symbol Group consists of owned
and franchised pharmacies operating under our
Allcare, Life and Hickey’s pharmacy brands as well
as wholesale customers who we support through
our range of innovative retail support services. The
number of pharmacies operating under the Symbol
Group provides management with insight into the
strength of these brands in the marketplace.
During 2020 the number of exclusive access programmes in progress or
completed by the Group grew to 61, with Covid-19 having minimal impact
on world-wide EAPs. The acquisition of Durbin in 2019 continues to enable
synergistic growth across the Product Access division and provides a unique
value proposition of technical and global market expertise to manufacturers.
The acquisitions of Innerstrength and RRD in 2020 further accelerates our
ability to deliver growth on a global basis and strengthens our business
proposition by driving a more integrated offering for our manufacturer clients.
Covid-19 lockdown measures and restrictions have resulted in a significant
proportion of interactions with healthcare professionals taking place digitally
rather than through more traditional methods. This has highlighted the importance
of Uniphar's investment in digital solutions, allowing the organisation to respond
effectively to evolving circumstances, further cementing our relationship with
key healthcare stakeholders, and enabling the delivery of strong organic growth
across the business.
The acquisition of the Hickey’s Pharmacy Group together with the addition of
new members joining our symbol groups has created a market leading offering of
346 pharmacies. This growth in pharmacy numbers demonstrates the strength of
our market presence and the key role we play in the national health infrastructure.
We support our pharmacies through our best in class supply chain E-commerce
platform which enables a tailored solution to be provided to each group member.
22
Uniphar plc Annual Report 2020
Strategic Review
23
Risk
Management
The Group’s Risk Management Policy provides
the framework to identify, assess, monitor
and manage the risks associated with the
Group’s business. It is designed to enable
the Group to meet its business objectives
by appropriately managing, rather than
eliminating, these risks.
Covid-19
Monitoring the spread
of Covid-19 and its
implications as it
continues to evolve
and change
Brexit
The Group has worked
with its customers and
suppliers to prepare for
and manage the impact
of Brexit on the business,
customers and patients
Risk Management and
Internal Control
The Directors have overall
responsibility for the Group’s
system of internal control and
for reviewing its effectiveness.
Through the activities of the Audit,
Risk and Compliance Committee,
the effectiveness of these internal
controls are regularly reviewed.
The Group has a dedicated Head
of Internal Audit who meets with
the Audit, Risk and Compliance
Committee to monitor the
adequacy of the Group’s internal
control systems. The Audit, Risk
and Compliance Committee also
meets with and receives reports
from the external auditors. The
Chairman of the Audit, Risk and
Compliance Committee reports to
the Board on all significant issues
considered by the Committee.
The Group operates a Group-wide
Risk Register which is reviewed
and updated on a regular basis
and is presented to the Audit, Risk
and Compliance Committee where
they consider the risks identified
and the effectiveness of the
mitigating actions taken, focusing
on those deemed most critical.
Where necessary, the Board draws
on the expertise of appropriate
external consultants to assist in
dealing with or mitigating risk.
Risk Management
Framework
The Group’s risk management
framework provides the structure
by which the principal risks
are managed. The Group has
implemented a ‘three lines of
defence’ approach to ensure that
risks are effectively managed
across the Group. Each of
these three lines play a distinct
role within the Group’s wider
governance framework.
Risk Register Process
The Group’s Risk Register
process is based on a Group-wide
approach. Risks are identified,
assessed and monitored with a
clear focus on the assignment of
responsibility to each risk owner.
Individual risks are assessed
and assigned a rating based on
the likelihood of occurrence and
potential impact. The Risk Register
is reviewed regularly, and any new
or emerging risks are added as
they are identified and assessed.
to the healthcare sector. The
health, safety and wellbeing of
our teams has remained a key
priority during the pandemic.
Regular communication continues
to be shared with all colleagues
advising them on the necessary
precautions being taken by
the business. Throughout the
business, several measures have
been implemented to protect our
teams including remote working
where possible, use of appropriate
personal protective equipment
and increased sanitisation and
screening measures.
Principal Financial and
Reporting Risks and
Uncertainties
Set out in the following tables
are the principal risks and
uncertainties facing the business,
which have the potential to have a
direct impact on the key strategic
objectives of the Group. The
principal risks are categorised
as Strategic, Operational and
Financial. These have been
developed from a full review of
the Group Risk Register, the
business performance and
evolving global trends.
These are not listed in order of
priority nor do they represent
an exhaustive list of all risks
currently affecting the business.
They represent what the Board
deems to be the principal risks
and uncertainties facing the Group
at this time. Some risks may not
be known to the Board at this
time or may not be of material
consequence at this time. The
mitigating factors that are in place
do not represent an absolute
level of protection and elimination
against the risk, rather they are
designed to give reasonable
protection against the impact of
the risk.
Divisional management are
responsible for completing
and maintaining divisional Risk
Registers, setting out the risks
and mitigating factors pertaining
to their area. The Group Risk
Manager reviews these and
updates the Group Risk Register
as required for any significant risks
arising. The Risk Manager reports
to the Audit, Risk and Compliance
Committee and the Board on risks
during the year.
The Audit, Risk and Compliance
Committee and the Board carry
out a robust review of the Risk
Register and communicate any
required changes in mitigating
actions back to executive and
divisional management levels.
2020 Highlights
The Group continues to ensure
that the risk management
framework is integrated in the
day-to-day activities across the
business. During the year ended
31 December 2020, the Group
carried out the following:
» Review of the risk management
process in operation across the
business resulting in refined
risk assessment methods;
» Review of the Group Risk
Register producing an updated
consolidated list of the key
risks facing the Group at this
time; and
» Enhanced focus on key risk
areas in 2020 including Brexit
and Covid-19 related risks.
Emerging Risks
In addition to considering our
current principal risks, emerging
risks are also considered as part
of our overall risk management
processes. Management identifies,
assesses, and manages new and
emerging risks in the same way
as the Group’s principal risks.
Emerging risks can arise in two
ways for the Group. The risk can
be newly identified as part of the
ongoing risk management process
in existence across the Group; or
the risk may already be identified
on the Group Risk Register, but
its potential impact has changed
leading to a reassessment.
Having completed the overall
risk assessment process for the
year, the Group has determined
that the risk associated with
the loss of competitive position
should be separately identified
as a principal risk. This risk
was previously identified on the
Group Risk Register and is now
recognised as a principal risk.
The risk associated with inventory
losses and provisions is no longer
separately identified as a principal
risk but remains on the Group’s
Risk Register. Enhanced focus
has been brought to key risk areas
in 2020, including Brexit and
Covid-19. We continue to monitor
these key areas, and the impact
they may have on the Group.
Covid-19
Throughout 2020, the Group
has continued to monitor and
respond appropriately to the
continued threat and risks posed
by the Covid-19 pandemic.
The measures the Group has
undertaken to respond to the
challenges posed by the pandemic
has resulted in change across
its business for staff, customers
and the community in which it
operates and serves.
We have outlined the main risks
impacting the Group as a result
of the pandemic. These risks are
based on current circumstances,
including the impact to our
colleagues, health and safety
and business continuity. As the
nature of the pandemic continues
to develop and change, Uniphar
remains committed to meeting its
customers needs. The safety and
wellbeing of its key stakeholders
and the wider community remain a
top priority.
Uniphar has continued to play a
significant role in the healthcare
infrastructure during the pandemic.
The nature of the products and
services offered means that there is
a continued demand for pharmaco-
medical products.
The resilience and dedication of
our teams ensured the successful
continuity of the supply and
distribution of medicines, medical
devices, and related services
24
Uniphar plc Annual Report 2020
Strategic Review
25
Risk Management continued
The Group has implemented a ‘three lines of
defence’ approach to ensure that risks are
effectively managed across the Group
Key Principal Risks and Uncertainties
Link to Strategic Initiatives Key
Strategic Initiatives Key to Trending
Continued Client Growth
Focused Market Leadership
Scaling Through Digital
Stable
Increasing
Decreasing
Risk Management Framework
The key principal risks and uncertainties for the year ended 31 December 2020 are summarised below.
Board/Audit,
Risk and
Compliance
Committee
Board - Ensure prudent risk management is implemented in the
Group. Review and approve the Group Risk Register along with
Risk Appetite and Risk Management Policy.
Audit, Risk and Compliance Committee - Oversee the
adequacy and effectiveness of the Group’s internal controls.
Responsible for the review and assessment of the effectiveness
of the Group’s risk management process.
Senior
Management
Overall responsibility for establishing and embedding the
risk management processes within the Group. The Group
Risk Manager is responsible for monitoring, maintaining, and
presenting the Group Risk Register to the Audit, Risk and
Compliance Committee and the Board.
I
l
m
p
e
m
e
n
t
i
n
g
3rd
line of
defence
2nd
line of
defence
1st
line of
defence
Internal Audit - Ensures independent oversight of the Risk
Management Policy and the execution of the Group’s risk
management process. The Internal Auditor is responsible for
testing the design and effectiveness of the Group’s control
environment and ensuring the risk management responsibilities of
the 1st and 2nd lines of defence have been discharged.
Risk Co-Ordinator - Responsible for overseeing and executing
the Group’s risk management process and maintaining the
Group’s Risk Management Policy and Risk Appetite Statement.
Operational Level - Processes and Controls in the ordinary
operations of the business which identify, assess and reduce
or mitigate risk exposure through management or internal
control measures.
g
n
i
r
o
t
i
n
o
M
Strategic Risks
Risk
Brexit
Impact
Mitigation
Trending
The UK left the EU in 2020,
which poses several risks for the
Group due to uncertainty and
complexities as to the future fiscal
and regulatory landscape in the
UK. This may have a negative
impact on supply and trade.
A Brexit plan is in place to manage the risks
across the Group. The Group has worked with
its customers and suppliers to prepare and
minimise the impact of any related disruption
on the business, customers and patients. As a
result, the Group increased its stock holding to
protect against potential supply chain issues.
Brexit also has the potential to
create market uncertainty and
currency fluctuations which could
impact the translation of our
UK operations into the Group's
reporting currency.
The Group is continuing to expand its
operations in Europe and the US creating
geographical diversity. The Group monitors
currency fluctuations for subsidiaries that
operate in countries outside of the EU.
Acquisitions Growth through acquisitions
continues to remain a key
strategy for the Group. Failure to
identify, complete and integrate
acquisitions successfully may
directly impact the Group’s
projected growth.
Brexit also presents opportunities in
Commercial & Clinical for outsourced
services and in Product Access for specialist
procurement services.
All potential acquisitions are assessed to
measure their strategic fit and financial return.
Specialist advisors are appointed to provide
robust and thorough due diligence.
Experienced management and project teams
ensure integration is managed effectively
to achieve identified benefits and minimise
potential risks. The Group carries out a Goodwill
Impairment Assessment annually, or more
frequently if required, to ensure an appropriate
carrying value.
26
Uniphar plc Annual Report 2020
27
Strategic Review
Risk Management continued
Strategic Risks continued
Risk
Impact
Mitigation
Trending
Economic &
geopolitical
risk
The global macroeconomic,
regulatory, political and legal
environment may impact the
markets in which we operate and
in turn our client and supplier
base. This may adversely affect the
financial and operational results of
the Group.
The Group closely monitors global political and
economic conditions and responds quickly to
any changes in circumstances or events.
The Group has increased its geographical
footprint to now include Ireland, the UK, the US,
Benelux, and the Nordics, thus decreasing the
reliance on one geographic market.
Key
personnel &
succession
planning
The success of the Group
is directly correlated to the
effectiveness and talent of its
people, including Directors, senior
management, and personnel
across all divisions.
Succession planning and talent management
is implemented across the Group ensuring that
the appropriate skills, knowledge and diversity
are in place to ensure the future success of
the Group. The Group looks to appropriately
incentivise teams.
If the Group fails to attract,
retain and develop the skills
and expertise of key individuals,
this may adversely impact the
Group's performance.
The recent appointment of our new Chief People
Officer will further support the development of our
teams across our growing global platform.
Market
perception &
reputational
risk
Uniphar plc is a publicly listed
company and must communicate
to the market and stakeholders
regularly with updates on financial
performance and key metrics.
The Group has financial reporting structures
and timelines in place to ensure accurate and
timely reporting. The Board reviews the financial
and operating performance, together with the
implementation of the strategic plan.
Loss of
competitive
position
Failure to deliver in line with
expectations may result in
reputational damage impacting
the Group’s ability to achieve
strategic targets.
The Group Investor Relations team actively
engage with the investment community.
The team ensure a timely and accurate
communication of information to the market.
A positive corporate culture reinforces ethically
responsible behaviour in the business.
Changes in the competitive
environment in which the Group
operates may occur as a result
of new market entrants, loss or
material change in the terms of key
customers or key suppliers, new
technologies or regulatory changes.
Failure of the Group to respond to
any of these may result in the loss
of its competitive edge and market
share, which may put pressure on
profitability and margins.
The Group continues to monitor market trends
and demands to maintain its competitive edge.
Individual business management teams manage
the supplier and customer relationship and
keep informed of any changes in their business
strategies. Value-add and unique services are
offered to enhance the relationship and promote
customer loyalty.
Strategic acquisitions enhance the commercial
relationships within the pharmaco-medical market
and provide a wider and more diverse service
offering, protecting the competitive position.
Uniphar continues to play a
critical role in the healthcare
infrastructure
Operational Risks
Risk
Impact
Mitigation
Trending
Pandemic
Risk –
Covid-19
Covid-19 and its implications
continue to evolve and change.
The pandemic is causing financial,
economic, and social disruptions
globally. The risks outlined
below are based on current
knowledge and projections of the
circumstances:
» Risk to product availability due
to potential disruption to supply
chains or shipping routes;
» Risk to the health, safety, and
wellbeing of our teams from the
impact of ongoing outbreaks
of Covid-19;
» Operational impact due to
unavailability of the teams
caused by measures taken by
either the Group or Government
to contain an outbreak; and
» The Group recognises the wider
risk of a change in demand
and lower general economic
activity in the countries where it
operates in the event of recurring
outbreaks of the virus.
Uniphar continues to play a critical role in
the healthcare infrastructure. The warehouse
capacity created across multiple locations,
together with exclusive distribution agreements,
and our strong manufacturer relationships,
enables the Group to ensure continuity of
services to the healthcare sector and to meet
the needs of customers in the event of any
disruption to normal supply chain routes.
The Group continues to follow Government
guidance in each country it operates in,
including travel restrictions and self-isolation
guidance. The Group has implemented several
measures to protect our teams including remote
working where possible, segregation and
zoning, use of appropriate protective equipment
and increased sanitisation and screening
measures. Regular communications are sent
to all colleagues advising them of necessary
precautions and are updated as necessary.
Business continuity and contingency plans
were put in place at the start of the pandemic,
and continue to evolve as our knowledge and
experience of working in the pandemic increases.
The nature of the product and services
provided means that there is a continued
requirement for pharmaco-medical products.
While there may be a reduction in the demand
for certain products and services and in
elective procedures, the requirement for these
services and procedures will still exist once the
pandemic is brought under control.
Uniphar have continuously monitored the
developing situation that the pandemic has
created and responded dynamically throughout.
The Group will continue in their approach to
protect its key stakeholders and the wider
community as the pandemic continues.
28
29
Uniphar plc Annual Report 2020Strategic Review Risk Management continued
Operational Risks continued
Operational Risks continued
Risk
Impact
Mitigation
Trending
Risk
Impact
Mitigation
Trending
IT systems
Digital capabilities are a specific
strategic offering of Uniphar, and
the alignment of our IT strategy with
the business strategy is essential.
IT strategy is a key factor in the Group’s
strategic planning process, ensuring the
development of IT systems and processes
remains aligned with the Group objectives.
Health &
safety
Uniphar distributes
pharmaceuticals and medical
devices to pharmacies, hospitals,
and patients.
Dedicated quality functions are in operation
across the Group ensuring adherence and
compliance with good distribution practice,
pharmacovigilance, and regulatory requirements.
The Group is reliant on the
effectiveness of its IT systems
and network. Any interruption or
downtime may have a negative
impact on the Group's operations,
financial conditions, and
competitive position.
Cybercrime
Failure to protect against the
ongoing threat of a cyber-attack
could lead to a breach in security,
impacting operations, financial
transactions, and sensitive
information.
Business
interruption
The Group may be unable to
provide a service to customers
due to external factors affecting
its operations such as, natural
disasters, environmental hazards,
or industrial disputes, resulting in
potential lost sales and the loss of
customer loyalty.
The Group actively monitors the performance
and robustness of IT systems in place. The
in-house IT team works in tandem with external
providers to ensure all business-critical
processes are safeguarded.
A Business Continuity Disaster Plan is in
place to ensure the uninterrupted provision of
services and to enable the restoration of key
systems if necessary.
The Group have IT security processes in place
to minimise the occurrence of cyber-attacks.
Continuous user awareness is a key measure
used in helping to protect against the threat of
a cyber-attack. External audit and penetration
testing is also carried out to identify vulnerable
areas and put in place mitigating controls.
IT infrastructure and controls have been
continuously reviewed and strengthened to
respond to the additional requirements arising
from Covid-19.
A Business Continuity Disaster recovery plan is in
place and is updated and reviewed continuously
to mitigate the risks to operational continuity.
Failure to implement and follow
proper health & safety procedures in
the distribution and administration
of these products and the provision
of proper handling information may
have adverse effects on employees
or patients.
The Covid-19 pandemic presents
an additional health & safety
risk to our teams and the wider
community.
A robust health & safety framework is in place
to ensure effective health & safety processes
are in operation.
In line with Covid-19 guidelines, additional
PPE has been provided, restricted site
access, sanitising stations and social distance
measures have been put in place across all
sites to protect our teams and community
from the impact of Covid-19. All measures
have been taken to ensure the safety of all our
stakeholders at this time.
Laws,
regulations &
compliance
Uniphar operates in a highly
regulated environment and as
such is subject to both local and
international laws and regulations
in the jurisdictions it operates in.
The Board has overall responsibility for the
corporate governance environment within
the Group. A strong corporate governance
culture exists with emphasis on continuous
improvement.
Failure to operate under any
of these stringent laws and
regulations could result in financial
penalties, reputational damage,
and risk to business operations.
The Group General Counsel and Company
Secretary has responsibility for the oversight
of compliance across the Group. The Group
also has an extensive quality and regulatory
team who ensure compliance with all applicable
regulations relating to our service offerings.
In the area of GDPR, the Group has appointed
a Group Data Protection Officer and Data
Protection Officers for each division.
In addition, the Group ensures that professional
appropriately qualified personnel are employed
in positions of responsibility.
Education and internal training are provided on
updates to laws and regulations as appropriate.
30
31
Uniphar plc Annual Report 2020Strategic Review
Risk Management continued
Our new banking facility permits drawdown
across multiple currencies which can
create a natural hedge
The Group continues to ensure
that the risk management
framework is integrated in the
day-to-day activities
Financial Risks
Foreign
currency
The Group's reporting currency is
Euro. Exposure to foreign currency
is present in the normal course of
business, together with the Group
operating in jurisdictions outside of
the Eurozone.
The Group's activities are primarily conducted
in the local currency of the operation, which
results in low levels of transactional risk. The
foreign currency risk has increased due to the
recent acquisitions in jurisdictions outside of
the Eurozone.
Treasury
The Group is exposed to liquidity,
interest rate and credit risks.
The Group reduces its exposure to currency
fluctuation by matching foreign currency
payments and receipts across business units.
Our new banking facility permits drawdown
across multiple currencies which can create
a natural hedge.
The Group Treasury Policy sets out how
these risks are managed. The policy is
reviewed and approved by the Audit, Risk
and Compliance Committee.
Cash forecasting and effective management
reports are in place to monitor and minimise
the financial risk. The new facility agreement
provides sufficient headroom for the Group in
terms of liquidity.
32
Strategic Review
33
Uniphar plc Annual Report 2020Strategic Review
Sustainability and
Governance Report
CEO Sustainability
Statement
2020 Sustainability Highlights
» First CDP Climate Change submission
» New Group-wide Sustainability Policy
» Establishment of our Sustainability Council
» Materiality assessment aligned to SASB and GRI
» Remuneration linked to sustainability targets for the first time
» Sustainability linked banking facility
» Group-wide Relay for Hope Event
» Appointment of a new Chief People Officer and a designated
Non-Executive Director responsible for workforce engagement
» Corporate Governance enhancements
"
2020 marks my inaugural sustainability
statement in our Annual Report and a
significant step for Uniphar in how we
coordinate, measure, monitor and report
on our sustainability efforts. "
As a healthcare services provider,
our business is rooted in serving
the community, in looking after
people, in health & safety, wellness,
regulatory compliance and
innovation. The Covid-19 crisis has
highlighted the integral part our
business plays in the community
in ensuring essential medicines
and equipment reach patients,
through both retail pharmacy and
hospital channels. Our Product
Access teams were also involved in
sourcing several difficult to access
medicines for treatments relating
to Covid-19.
Our 2020 Journey
During 2020, we engaged the
services of external consultants
to assist us in formalising our
sustainability journey and to
give us the tools to view our
business in the eyes of our wider
stakeholders. As part of this
process our senior management
team carried out a first phase
materiality assessment to identify
the areas that we consider to be
of most relevance to our business
and our stakeholders. In addition,
we adopted a new Group-wide
Sustainability Policy putting the
principles of Integrity, Inclusivity,
Legacy, Stewardship and
Transparency, at the heart of what
we do and with a commitment
in all aspects of our business to
manage and continuously improve
our environmental and social
responsibilities effectively, through
all our collective actions.
We appointed a Sustainability
Council, comprised of colleagues
from a wide range of functions
across each of our divisions, to
progress our sustainability agenda.
The Council reports directly to
the Executive team. Through the
Council we will set and monitor
our sustainability targets, plan, and
review our performance and drive
our sustainability agenda. Our aim
is to keep sustainability frameworks
and reporting in focus across
everything that we do and through
the passion of our Sustainability
Council, to set meaningful,
ambitious, and achievable targets
so that we can demonstrate, in an
objective fashion, our passion and
our progress in this key area.
As part of our review of how we
report on sustainability in the
business, we looked at each
of our four Sustainability and
Governance pillars and in line with
best practice we have added a
fifth pillar – Business Solutions &
Innovation. This is an area I believe
our business already excels in
and is at the heart of our business
strategy and ethos. We pride
ourselves on our entrepreneurial,
ambitious and innovative workforce
who strive on a daily basis to find
innovative solutions. Innerstrength,
acquired by the Group in March
2020, whose business is founded
on using technology to improve
patient outcomes, demonstrates
this passion.
CDP
First CDP Climate
Change Submission
€230k
raised for global
cancer charities
Transparency
Integrity
Stewardship
Inclusivity
Legacy
Continuous investment in
our digital platforms and our
digitally focused acquisitions of
Innerstrength and Diligent Health
Solutions during 2020 all add to
our ability to provide innovative
and sustainable solutions for
manufacturers, patients and
healthcare providers.
As we continue to grow as
an organisation, the strategic
importance of being conscious
not only of our markets and our
customers but of our environment
and communities is more important
than ever.
34
Uniphar plc Annual Report 2020
35
Strategic Review
I would like to thank
everyone in our business
who supported our
various sustainability
initiatives this year,
particularly our hugely
successful Relay for Hope
charity event
Sustainability and Governance Report continued
2020 saw us take our first step
into climate impact reporting
Climate Reporting
2020 saw us take our first step
into climate impact reporting with
our first CDP Climate Change
submission in respect of our
businesses on the island of
Ireland. In 2021, we completed
a Group-wide carbon foot-
printing exercise, and we will
complete a full CDP response
across our entire business later
this year. In parallel with the
CDP reporting process, it is our
intention to disclose climate risk
and opportunity implications for
our business in alignment with
the Taskforce on Climate-related
Financial Disclosures (TCFD)
recommendations.
Targets & Goals
Our Sustainability Council are
focused on setting meaningful
targets across each of our
areas of materiality. In 2021,
the Council will work across
all business functions to
review performance and set
targets for the future, aligned
to our sustainability pillars and
materiality assessment.
The introduction of an
ESG linked banking facility
together with the inclusion of
sustainability remuneration
targets for senior management
ensures focus to achieve the
targets we set for the business.
We also intend to engage with
our wider stakeholder base on
the topic of materiality for our
business and to ensure that
these insights are incorporated
into our corporate strategy and
action plan.
I would like to thank everyone in
our business who supported our
various sustainability initiatives
this year, particularly our hugely
successful Relay for Hope charity
event. In a year of social and
economic turmoil in the world, the
spirit, dedication and resilience of
our teams has shone through.
Gerard Rabbette
Chief Executive Officer
We are delighted to welcome our
new Chief People Officer in 2021,
Lorraine Kenny who will play an
integral part in the development
of our culture and values across
the Group. Jim Gaul, appointed
to the Board in January 2021,
has been designated as our
Non-Executive Director with
responsibility for workforce
engagement which will ensure
that the views and experiences of
our wider workforce have a formal
place at our Board table.
We intend to increase the profile
of our Sustainability Council
throughout the business by
providing awareness training
and information sessions so our
teams across the Group have
full visibility on the initiatives
being implemented.
36
Strategic Review
37
Uniphar plc Annual Report 2020 Sustainability and Governance Report continued
Pillars & Materiality
»
Governance
The Sustainability Council was
set up in 2020 to drive the
sustainability agenda across the
Group. It has representatives from
senior leadership across all our
business units and key functional
areas. The Council reports to
the Executive who report in turn
to the Board. The Chair of the
Council is Aisling McCarthy,
General Counsel & Company
Secretary of the Group. The
responsibility of the Council
is to define and oversee
the implementation of the
sustainability policy and strategy
of the Group. Key to this is setting
targets at a Group and individual
business unit level and engaging
internal and external stakeholders
with a view to managing,
monitoring and reporting on the
delivery against those targets
to the Executive team, and our
wider stakeholders. The Council
also oversees all sustainability
reporting, and will oversee
the appropriate resourcing of
sustainability initiatives to ensure
their successful delivery.
Our Sustainability Governance Structure
Board
Oversight
Executives
- Oversight, responsibility,
recommendations,
directly reporting to the Board
Sustainability Council
- Comprised of a senior leadership team
from across the Group
- Oversees the process across the business,
sets and monitors targets
Sustainability Working Groups
- Cross-divisional groups across common
functional areas e.g. environmental working group
- Design and delivery of site projects
Uniphar have identified five strategic pillars that define our approach to sustainability.
During 2020, we conducted a first phase materiality exercise with members of our senior leadership team.
The following are those areas deemed most critical for Uniphar and those where we are currently measuring
KPIs or intend to do so in the future:
People &
Workplace
Community
Involvement
Environment &
Sustainability
Governance,
Quality &
Compliance
Business
Solutions &
Innovation
What this
pillar means
to us
Our people
are our most
important asset
and we are
committed to
making Uniphar
a fulfilling and
inclusive place
to work.
Relevant
SDGs
As the business
grows and our
geographical
footprint expands,
we remain
committed to
managing our
environmental
responsibilities
effectively.
Supporting
employees
to actively
participate in the
local communities
where we are
based is a
longstanding
objective for the
Group and is
achieved through
serving the
community and
supporting good
causes.
We believe
a positive
difference will be
achieved through
collaboratively
developing
innovative
business
solutions across
all our divisions
resulting in a
more sustainable
business
and better
outcomes for our
stakeholders.
Operating in
healthcare
markets that are
highly regulated
and demand
high quality and
compliance
standards, drives
our quality focus
and culture
of continuous
improvement.
Ensuring the
highest standards
of governance,
quality and
compliance is
fundamental to
our business.
Sustainable Development Goals
Uniphar fully endorses the UN Sustainable Development Goals (SDG) and we consider the following goals to be
the ones where we can make the most significant contribution:
We acknowledge the importance of all 17 SDGs and will work together with our stakeholders to contribute to
each of them.
Materiality
» Employee
» Active
» Energy
Health & Safety
» Diversity &
Inclusion
Practices
» Employee
Wellbeing
» Employee
Training
» Employee
Labour
Practices
Community
Support
» Charity &
Management
» Greenhouse Gas
Emissions
Fundraising
» Waste &
» Customer
Privacy
» Customer
Welfare
Hazardous
Waste
Management
» Pollution
Prevention
» Sustainable
Transport &
Logistics
» Product Quality
& Patient Safety
» Business Ethics
» Systemic Risk
Management
» Critical
Incident Risk
Management
» Legal &
Regulatory
Requirements
» Selling
Practices
& Product
Labelling
» Business Model
Resilience
» Innovation
» Supply Chain
Management
» Management
38
Strategic Review
39
Uniphar plc Annual Report 2020 Sustainability and Governance Report continued
People & Workplace
Diversity & Inclusion
At Uniphar, our people are at the core of what we
do. We benefit from the increasingly global nature
of our business which brings together different
ideas, experiences and capabilities from across
the globe. We aim to create a work environment
in which our people can reach their full potential
regardless of gender, age, disability, ethnicity, or
sexual orientation.
Uniphar are committed to gender diversity and equal
pay and have strong female leadership across the
Group. Two out of eleven of our Board members
are female which will represent 20% of the Board
on retirement of Padraic Staunton from the Board in
May 2021. The Board remain committed to keeping
diversity and, in particular, gender diversity as a key
consideration in succession planning.
Uniphar is also proud of the strong female
representation across senior management and the
entire workforce. As at 31 December 2020, women
accounted for 30% of senior management and 62%
of total employees, demonstrating a high level of
diversity across the Group.
Health & Safety
At Uniphar, the health & safety (H&S) and the
wellbeing of our staff is paramount. With large
operational facilities in various locations, it is
essential we adhere to the highest standards
of health & safety throughout the organisation,
ensuring best practice is adhered to at all times.
Uniphar provides training courses on a regular basis
including training on Good Distribution Practices
(GDP), manual handling and first aid. We monitor
and investigate all safety concerns and analyse this
data in order to continuously improve.
The number of reported health & safety incidents
saw a decrease of 14% from 2019 to 2020 with
motor vehicle incidents accounting for 48% of all
recorded incidents across the Group in 2020.
40
Uniphar employees were delighted to attend and sponsor
the start of the Women in Leadership series again for 2020,
which focuses on developing leaders, empowering women and
enabling women to thrive.
Male
Female
%
100
80
60
40
20
0
Directors Senior All
Management Employees
Total number of Incidents
Number of H&S incidents
2020
2019
121
141
200
100
0
2020 2019
Incidents
Wellbeing
Due to the ongoing Covid-19 pandemic,
2020 saw some of the greatest mental
health challenges for generations. The
“new normal” brought isolation,
anxiety, loneliness and challenges with
juggling home and work life for so many
of our staff. It was imperative that we
focused our efforts on keeping our staff
healthy and mentally well during these
challenging times.
Wellbeing
Across the Group our HR teams
implemented initiatives centred around
connectivity and ensuring that people
felt connected while keeping apart.
Wellbeing
Due to the ongoing Covid-19 pandemic, 2020 saw
some of the greatest mental health challenges for
Due to the ongoing Covid-19 pandemic,
generations. The “new normal” brought isolation,
anxiety, loneliness and challenges with juggling
2020 saw some of the greatest mental
home and work life for so many of our teams. It was
health challenges for generations. The
imperative that we focused our efforts on keeping
“new normal” brought isolation,
our staff healthy and mentally well during these
challenging times.
anxiety, loneliness and challenges with
juggling home and work life for so many
of our staff. It was imperative that we
focused our efforts on keeping our staff
healthy and mentally well during these
challenging times.
During the year the Group ran a variety
of virtual wellness initiatives and events,
including weekly good news round ups,
daily HR check-in calls, zoom quizzes,
virtual choirs, online challenges, shared
lockdown diaries, photo competitions,
online yoga and mindfullness sessions.
During the year, the Group ran a variety of virtual
wellness initiatives and events, including weekly
good news round ups, daily HR check-in calls, zoom
Across the Group our HR teams
quizzes, virtual choirs, online challenges, shared
We provided flu vaccinations to
implemented initiatives centred around
lockdown diaries, photo competitions, online yoga
employees and focused on health issues
and mindfullness sessions.
connectivity and ensuring that people
celebrating Breast Cancer Awareness
felt connected while keeping apart.
Day and raising mental health and
suicide prevention awareness.
Across the Group our HR teams implemented
initiatives centred around connectivity and ensuring
that people felt connected while keeping apart.
We made annual flu vaccinations available to
employees free of charge and focused on health
issues celebrating Breast Cancer Awareness Day
and raising mental health and suicide prevention
awareness.
For World Mental Health Day 2020 we held a Group-
wide webinar providing information to our employees
on how to manage “The New Normal” environment, as
well as the important role of diet, lifestyle and sleep.
Uniphar teams demonstrated great positivity and
resilience in the face of adversity during 2020, and we
recognise how essential our people are in supporting
the sustainable development of our business.
During the year the Group ran a variety
of virtual wellness initiatives and events,
including weekly good news round ups,
daily HR check-in calls, zoom quizzes,
virtual choirs, online challenges, shared
lockdown diaries, photo competitions,
online yoga and mindfullness sessions.
For World Mental Health Day 2020 we
held a company wide webinar providing
information to our employees on how to
manage “The New Normal”
environment, as well as the important
We provided flu vaccinations to
role of diet, lifestyle and sleep.
employees and focused on health issues
Uniphar teams demonstrated great
celebrating Breast Cancer Awareness
Day and raising mental health and
positivity and resilience in the face of
suicide prevention awareness.
adversity during 2020, and we recognise
how essential our people are in
supporting the sustainable development
of our business.
For World Mental Health Day 2020 we
held a company wide webinar providing
information to our employees on how to
manage “The New Normal”
environment, as well as the important
role of diet, lifestyle and sleep.
Strategic Review
"
Uniphar teams demonstrated great
positivity and resilience in the face of
adversity during 2020, and we recognise
how essential our people are in
supporting the sustainable development
of our business.
Training and Development
Uniphar are committed to supporting
and investing in the professional
development of our employees. The
Group provides a range of career
development opportunities which
enable our employees to reach their
full potential and grow within our
business. We also continue to
Training & Development
support our employees through
Uniphar are committed to supporting and investing
further education and professional
in the professional development of our employees.
The Group provides a range of career development
exams.
opportunities which enable our employees to reach
their full potential and grow within our business. We
Uniphar are committed to supporting
also continue to support our employees through
and investing in the professional
further education and professional exams.
development of our employees. The
Group provides a range of career
development opportunities which
enable our employees to reach their
full potential and grow within our
business. We also continue to
support our employees through
further education and professional
exams.
Training and Development
The employees and their families in Star and Outico from the UK, Ireland
The employees and their families in Star and Outico from the
and the Netherlands formed a virtual choir and performed a rendition of
UK, Ireland and the Netherlands formed a virtual choir and
“Lean on Me” during lockdown
performed a rendition of “Lean on Me” during lockdown
When I is replaced by We
- Illness becomes Wellness"
The employees and their families in Star and Outico from the
41
UK, Ireland and the Netherlands formed a virtual choir and
performed a rendition of “Lean on Me” during lockdown
Uniphar plc Annual Report 2020
Sustainability and Governance Report continued
Community Involvement
Uniphar’s Charity Partners
2020 saw the first Group-wide charity event in our
hugely successful Relay for Hope event.
This virtual event took place from December 4th–6th,
to support cancer charities around the globe and
to remember those who have lost their lives to the
disease. The event saw Uniphar employees run,
walk and cycle to clock-up kilometres for great
causes. The event raised a phenomenal €230,000
for cancer charities in every country that Uniphar has
a presence, with employees clocking up a breath-
taking 27,000kms over the course of the weekend.
This event also united the business in a common goal
and brought a great spirit of fun and competitiveness
across the whole Group.
€230,000
raised for global
cancer charities
over 3 days
Supported by the
Uniphar Community
Active Community Support
Supporting our communities is at the core of what
we do. Across each of our three divisions, Uniphar
provides vital medicines, the highest quality medical
devices and access to life saving drugs both nationally
and across the globe.
During 2020, through the commitment, hard work
and adaptability of our Supply Chain & Retail teams,
we ensured that pharmacies and hospitals across
Ireland were supplied with the medicines they needed
for their patients throughout the pandemic. In the
Commercial & Clinical division the Pharma business
unit mobilised teams for essential Covid-related
projects, with the MedTech business unit ensuring
hospitals had essential equipment needed to treat
Covid-19 patients.
Our Product Access division continued to source
and supply unlicensed medicines to the UK, Irish
and global markets during the pandemic and worked
with healthcare bodies to source several difficult to
access medicines for treatments relating to Covid-19.
In addition to supporting communities through our
business operations, the Group also ran a number of
initiatives in local communities.
In 2020, Uniphar selected Jobstown Assisting
Drug Dependancy (JADD) as one of our local
charity partners.
The Group worked with FIT Limited, an ICT talent
pipeline, that develops and promotes technology-
based programmes and career development
opportunities for job seekers who have become
detached from the labour market.
Supporting our frontline staff
In a show of support for our hospital workers
during Covid-19, the Group teamed up with one
of our suppliers to provide barrier creams and
dressings to help provide facial protection for
hospital staff wearing PPE for long periods of
time. In conjunction with our suppliers the Group
donated supplies to numerous HSE locations
throughout Ireland at the height of the pandemic.
During the year, goodie bags were also donated to
hospital staff in recognition of their commitment and
hard work on the frontline throughout the pandemic.
42
Uniphar plc Annual Report 2020
43
Members of our Commercial & Clinical Medtech team
supporting the Frontline Heroes Challenge
Strategic Review
Sustainability and Governance Report continued
Environment & Sustainability
Uniphar Group Emissions by Emission Source
Uniphar Emissions by Division
e
2
O
C
t
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2018
2019
2020
e
2
O
C
t
4000
3500
3000
2500
2000
1500
1000
500
0
SCR C&C PA
Electricity Vehicles Natural Gas Leaked Oils
(Location Rate)
Refridgerants
Energy Management
At Uniphar, we understand that our
activities can have a lasting impact
and we believe in protecting our
environment for the benefit of
future generations.
2020 saw Uniphar increase our
focus on tracking and reducing
our business’s impact on the
environment. We engaged external
consultants who provided advice
and guidance on how we can take
further steps towards achieving
our sustainable development goals
(SDGs) of Responsible Consumption
and Climate Action.
As part of our sustainability agenda,
we performed a Group-wide carbon
foot-printing exercise and tracked
Scope 1 and Scope 2 carbon
emissions across the Group for 2018,
2019 and 2020, the results of this
exercise are set out above (excluding
entities acquired during 2020).
CDP & Carbon
Emissions Reporting
The Carbon Disclosure Project
(CDP) provides a globally recognised
disclosure system that enables
companies to assess, disclose
and manage their environmental
impacts. In 2020, Uniphar submitted
its first response to CDP disclosing
emissions and other environmental
data in respect of our business on
the island of Ireland.
We gathered Scope 1 and
Scope 2 greenhouse gas emissions
data from our different businesses
and it is our aim to expand the
geographies covered by the
submission in 2021 to include all
Group businesses (excluding
new acquisitions).
We are also working with our waste
providers to obtain data in relation
to the treatment of our waste across
the Group.
Relevant parts of our business are
compliant with the Waste Electrical
and Electronic Equipment Directive
(WEEE).
ESG Linked Facility
During 2020 the Group refinanced its
banking facilities and the new facility
now incorporates a mechanism for
interest rate adjustments based on
the achievement of sustainability
targets with any increase in the
rate resulting in the funds from
the rate increase being applied to
sustainability initiatives.
2018
2019
2020
4.74
4.09
2.97
Group
Intensity
Measure
tCO2e/
Million €
Revenue
We are conscious that a significant
portion of our carbon footprint
arises through outsourced activities
such as logistics and through our
supply chain and we are committed
to working with our supply chain
partners in this area.
Waste
Across all our sites we are
continuously exploring ways to
reduce, reuse and recycle. We have
been a member of Repak since 1999
and we make considerable efforts
across the business to reduce plastic
waste. Our distribution facilities
see significant percentages of their
waste recycled and diverted from
landfill with landfill diversion rates
varying between 75% and 95% of
waste generated across our Irish
distribution facilities.
Looking to the future
We have appointed
environmental champions
to our Sustainability Council
to progress the Group’s
sustainability agenda for 2021
and beyond. Our aim is to
improve the measurement and
reporting processes on our
consumption and set long-
term targets that are aimed at
protecting the environment.
2020 marked the first step in
our climate reporting journey
and we look forward to
progressing our sustainability
agenda and reducing our
environmental impact.
Governance, Quality & Compliance
The Group seeks continuous
improvement in the areas
of Governance, Quality &
Compliance. The governance
of our business is dealt with in
extensive detail in the Corporate
Governance section of this report
on pages 62 to 70.
Product Quality &
Patient Safety
The healthcare industry is a
highly regulated industry and this
regulation is essential to protect
the health & safety of people who
use the products and services
we supply. The Group works hard
to ensure that the products we
supply reach the patient in perfect
condition and that we provide
all services in an ethical and
compliant manner.
Uniphar has in place a robust
quality management system
(QMS), underpinned by the core
GxP regulatory requirements,
which also ensures alignment
and ongoing certification with
ISO 9001 2015. This allows
us to comply with the many
regulatory regimes, including
importation, storage, distribution
of products in accordance with
EU GDP regulations as well as
the promotion of and engagement
with pharmaceutical and medical
device manufacturers in an ethical
and compliant manner.
The Group’s QMS is based on
risk assessment methodologies,
deviations, corrective actions and
change controls. 2020 has seen the
benefits of the project commenced
in 2019 to harmonise our approach
to quality across all our locations
with the roll-out of our electronic
QMS across all divisions and
business units. This investment in
technology supports the quality
centric approach of the Group.
The Quality Culture
at Uniphar
Uniphar is committed to successful
collaboration with all our customers,
partners and stakeholders to ensure
their regulatory expectations and
needs are met.
Through extensive training the
Group places a focus on a quality
culture and a strong understanding
of quality risk management which
allows us to meet or exceed the
requirements and expectations of
our customers and partners.
Risk Management
The Group has a robust risk
management framework in place
which provides the structure
for managing the principal risks
of the business. Details of this
risk management framework are
detailed on pages 24 to 32.
In addition, the quality and
regulatory personnel across
the Group perform regular risk
assessments and have robust
validation processes in place.
Regulatory Expertise
The Group appreciates the
importance of regulatory expertise
in navigating the ever-changing
regulatory environment in which
we operate. We pride ourselves on
the depth of expertise in this field
across the Group and acquisitions
such as Diligent Health Solutions
and RRD International serve to
greatly enhance our regulatory
know-how and capabilities.
Business Ethics
Uniphar is committed to
embodying and promoting a
corporate culture that is based
on sound ethical values and
behaviours and using it as an
asset and a source of competitive
advantage within its business. The
Group has a whistleblower policy
in place establishing a structure
where behaviours which depart
from this ethical culture can be
reported whilst protecting the
rights of the whistleblower.
Anti-bribery & Corruption
The Group has in place an anti-
bribery and corruption policy and
adopts a zero-tolerance approach
to all forms of bribery and
corruption. These standards are
communicated to, and expected
of, all employees.
Human Rights
The Group is opposed to any form
of slavery and human trafficking
and conducts its business in line
with the UK Modern Slavery Act
2015 and has a Modern Slavery
Policy in place which is available
on the Group’s website,
www.uniphar.ie.
GDPR & Customer Privacy
During 2020, Uniphar
implemented an enhanced GDPR
framework across the Group,
including the appointment of
designated Data Protection
Officers within each division.
Uniphar meets the accountability
principle of the GDPR through the
following activities:
» Group Data Protection Officer
and designated Divisional Data
Protection Officers;
» Data Protection leadership and
oversight;
» Response procedures for
handling subject access
requests, breaches and internal
non-compliance;
» Monitoring and verification of
internal compliance with data
protection regulations;
» Staff training and awareness;
» Transparent communication
of privacy policies to data
subjects;
» Implementation of Data
Protection policies and
procedures; and
» Risk assessments of high-risk
processing activities.
The Group has a Privacy Policy
which is available on the Group’s
website, www.uniphar.ie, and a Data
Protection Policy which is available
to the workforce.
44
Uniphar plc Annual Report 2020
Strategic Review
45
Sustainability and Governance Report continued
An innovative culture is seen in all areas
of the business from implementing
improvements in existing systems,
evaluating new acquisition opportunities
and enhancing our digital capabilities
Performance
Review
Financial Review
Commercial & Clinical
Product Access
Supply Chain & Retail
48
52
54
56
Business Solutions & Innovation
During 2020, as part of our
materiality assessment, the
Group identified a fifth pillar of
sustainability – Business Solutions
& Innovation.
This is an area the Group is
particularly passionate about and
an area that our stakeholders will
recognise as synonymous with how
Uniphar does business.
Business Resilience
Business resilience was a topic
that was thrust into the spotlight
across all industries in the wake
of Covid-19. As a Group we
are extremely proud of how the
business has performed in these
challenging times and diversity in
product portfolios and services
offerings was key to this.
Whilst the healthcare industry
remained essential throughout
the pandemic, the Covid-19 crisis
also presented huge challenges
to those working in the healthcare
sector. The strength, depth and
resilience of our teams, coupled
with our investment in digital
platforms and systems, meant that
the Group was well positioned
to face these challenges and to
continue to deliver growth.
We believe the ability of our senior
managers to adapt traditional
business models, product
portfolios and service offerings to
continue to deliver growth in these
challenging times demonstrates
true business resilience.
Innovation
Innovation is at the heart of
Uniphar. The Group is constantly
looking to improve how we operate,
to enhance efficiencies and to be
best in class in all that we do.
This innovative culture is seen
in all areas of the business from
implementing improvements in
existing systems, evaluating new
acquisition opportunities and
enhancing our digital capabilities.
The strategic acquisitions in
2020 of both Innerstrength and
Diligent Health Solutions further
support our innovative culture.
Innerstrength is a software
development business whose
products are designed to improve
patient outcomes, while Diligent
Health Solutions provides digital
communication solutions in an era
where digital communication is
proving more essential than ever
and supports our multichannel
capabilities and service offerings
to our customers enabling them to
adapt to changing times.
46
47
Uniphar plc Annual Report 2020 Financial
Review
"
The Group delivered a strong financial
performance in 2020, at both a gross
profit & EBITDA level, with strong free cash
flow conversion resulting in lower than
projected net debt."
2020 Financial Highlights
Gross Profit
EBITDA
€217.3m
€66.7m
(2019: €180.6m)
(2019: €58.6m)
ROCE
18.9%
(2019: 17.3%)
Organic Gross
Profit Growth
Net bank
(debt)/cash
Basic
EPS
6.7%
(2019: 7.1%)
(€34.4m)
10.6 cent
(2019: €26.6m)
(2019: 11.5 cent)
Revenue
Revenue growth of 9.5% was achieved through a combination of strong organic growth, particularly driven
by the strong performance of Product Access and Commercial & Clinical, together with the full year impact of
the 2019 acquisitions.
Summary financial performance
Year ended 31 December
2020
€’000
2019
€’000
Reported
Constant
currency
Growth
IFRS measures
Revenue
Gross profit
Operating profit
Basic EPS (cent)
Alternative performance measures
Gross profit margin
EBITDA
Adjusted EPS (cent)
Net bank (debt)/cash
Return on capital employed
1,823,854
1,665,283
217,252
39,944
10.6
11.9%
66,713
12.6
(34,419)
18.9%
180,602
28,207
11.5
10.8%
58,555
14.3
26,622
17.3%
9.5%
20.3%
41.6%
9.7%
20.6%
42.2%
13.9%
14.3%
Gross profit
The increase in revenues, coupled with the growth in our gross profit margin from 10.8% to 11.9%, due
to improvements in our revenue mix, contributed to 20.3% overall growth in gross profit during the period
including 6.7% organic gross profit growth. The improvement is primarily driven by the strategy of expanding
into higher growth, higher margin sectors and businesses, with the acquisitions completed during 2019 and
2020 delivering on that strategy. Gross profit generated from outside of Ireland increased by more than 50% in
the year, with the expansion of the pan-European footprint in Commercial & Clinical, growth in Product Access
driven by the integration of Durbin and also the full year impact of prior year acquisitions.
Divisional gross profit
Year ended 31 December
Commercial & Clinical
Product Access
Supply Chain & Retail
2020
€’000
92,193
30,423
94,636
2019
€’000
76,754
17,199
86,649
Growth
Reported
20.1%
76.9%
9.2%
Constant
currency
20.6%
78.5%
9.2%
EBITDA
Year on year, EBITDA has increased by €8.2m (13.9%) to €66.7m, reflecting the increase in gross profit,
partially offset by an increase of 23.3% in operating costs in the year which is primarily driven by the full year
impact of the 2019 acquisitions.
Exceptional Items
Exceptional costs incurred during the year of €4.8m are primarily due to acquisition related costs, with
these costs partially offset by the net release of deferred contingent consideration, following a review of
the expected performance against earn-out targets and contractual obligations. See note 4 in the financial
statements for further details.
Earnings per share
Basic earnings per share at 10.6 cent, decreased from 11.5 cent in 2019. The increase in underlying earnings,
was offset by an increase in the weighted average number of shares when compared to 2019.
48
2020 Financial Highlights
49
Uniphar plc Annual Report 2020Performance Review
Financial Review continued
Strong financial indicators
18.9%
ROCE
111.0%
Free Cash Flow Conversion
12.6 (cent)
Adjusted EPS
The weighted average number of shares in 2020 was 262,436,000 compared to 183,546,000 in 2019, following
our successful IPO in July 2019. The full year dilutionary impact of the IPO on the weighted average number of
shares came through in 2020. For further details see note 8 in the financial statements.
The Group’s adjusted earnings per share for 2020 was 12.6 cent (2019: 14.3 cent). Underlying earnings have
increased by 25.1% from €26.3m in 2019 to €32.9m in 2020 driving growth. This is offset by an increase in
the weighted average number of shares in issue during the year as a result of the IPO.
On a like for like basis, adjusted earnings per share increased from 10.0 cent to 12.6 cent which reflects the
strong performance in the year. This is calculated using the 2020 weighted average number of shares in both
years, to provide a more meaningful comparison.
Cash flow and net bank debt
2020 delivered a strong cash performance, driven by free cash flow conversion of 111.0%, with the Group’s
net bank debt position being €34.4m (2019: net bank cash €26.6m).
Year ended 31 December
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash (outflow)/inflow from financing activities
Foreign currency translation movement
(Decrease)/Increase in cash and cash equivalents in the year
Movement in restricted cash
Cash flow from movement in borrowings
Movement in net bank (debt)/cash
2020
€’000
65,978
(110,326)
(8,715)
(567)
(53,630)
955
(8,366)
(61,041)
2019
€’000
106,997
(45,644)
42,148
-
103,501
(210)
76,211
179,502
The Group has remained focused on strong working capital management, and this is reflected in the cash
generated from our operating activities of €66.0m. Free cash flow conversion in 2020 of 111.0% includes one off
timing impacts which are expected to unwind in early 2021. The Group’s medium-term free cash flow conversion
target is 60-70%.
The net cash outflow from investing activities principally consisted of acquisitions completed during the year
of €57.4m, deferred and deferred contingent consideration of €35.3m, and capital investment of €15.7m which
included a strategic investment in a new large-scale distribution centre in Annacotty, Co. Limerick, which is due
to come into operation in early 2021. The Group completed four acquisitions (Hickey’s Pharmacy Group, RRD
International, Diligent Health Solutions and Innerstrength), as part of our strategy to build on our platform for
Commercial & Clinical and Product Access and increase our retail pharmacy footprint in Supply Chain & Retail.
New bank facility
In July 2020, the Group completed a planned refinance of our banking facilities with our existing syndicated
banking partners. The new five-year banking facility (with the option to extend by a further two years) almost
doubles the Group’s available facilities and sees the Group move from a term loan facility to a revolving credit
facility of €150.0m and a €90.0m uncommitted accordion facility. The new facility provides a strong platform to
support the Group’s growth strategy.
Taxation
The increased tax charge of €0.2m to €5.7m in 2020 is reflective of the tax associated with both organic and
acquisition related profit growth. The effective tax rate year on year has decreased from 17.4% to 14.9% on
account of the impact of respective under and over provisions relating to prior years. Excluding these prior year
provision adjustments, the effective tax rate increased by 0.7% to 17.2%, reflecting increased trading in tax
jurisdictions outside of Ireland. The effective tax rate is calculated as the income tax charge for the year as a
percentage of the profit before tax and exceptional items.
Foreign exchange
The Group’s expansion into new geographies, and the continued growth in existing geographies operating
outside of the Eurozone, results in the primary foreign exchange exposure for the Group being the translation
of local income statements and balance sheets into Euro for Group reporting purposes.
On a constant currency basis, revenue increased by 9.7% (vs 9.5% reported growth), gross profit increased
20.6% (vs reported growth 20.3%) and operating profit increased by 42.2% (vs 41.6% reported growth). The
re-translation of non-Euro subsidiaries to Euro has resulted in a decrease in our operating results for 2020.
GBP
US Dollar
Swedish Krona
2020
Average
0.88888
1.14009
10.48146
2019
Average
0.87756
1.11949
10.58475
Return on capital employed (ROCE)
The Group’s ROCE has increased in 2020, reaching 18.9% up from 17.3%, reflecting both the increase
in profit in the year driven by organic growth and the strong performance from our 2019 acquisitions, in
particular Durbin, as well as the Group’s strong cash performance driven by continued tight working capital
management. The investment made during 2020, both from a capital and acquisitions perspective, will deliver
further benefits and growth in the coming years.
Details on how this was calculated are included in the APMs section on page 189 to 193.
Dividends
At the time of the IPO, the Board committed to adopting a progressive dividend policy to reflect the expectation
of future cash flow generation and the long-term earnings potential of the Group. Due to the Covid-19
uncertainty the Group did not pay an interim dividend however following the positive results for the year, the
Board are proposing a final dividend of €4.2m. Subject to shareholder approval at the AGM, it is proposed to pay
the dividend on 17 May 2021 to ordinary shareholders on the Company’s register on 23 April 2021.
Non-recourse financing arrangement
In July 2020, the Group increased the non-recourse financing arrangement to €80.0m from €68.0m, which was
the value of the initial arrangement in December 2019. Under the terms of this non-recourse agreement, the
Group has transferred substantially all credit risk and control of certain trade receivables mainly within Supply
Chain & Retail, unlocking the cashflow value for further reinvestment. For further detail see note 32 in the
financial statements.
The net cash outflow from financing activities of €8.7m was principally due to the repayment of the facility
termination fee, principal lease payments and the payment of dividends, partially offset by the proceeds
from borrowings.
Tim Dolphin
Chief Financial Officer
50
51
Uniphar plc Annual Report 2020Performance Review
Commercial
& Clinical
"
Expertise and flexibility enabled our teams
to deliver a strong performance by
meeting the needs of our manufacturer
clients and healthcare customers during
the challenge of the pandemic."
2020
Number of employees
1,200+
Number of countries
operating in
13
% of revenues
generated
outside Ireland
54%
We continued our expansion
of our Commercial & Clinical
division, both geographically and
through our client base in 2020.
With a workforce of over 1,200,
a well invested multi-channel
platform and an ability to serve 13
countries, we were able to deliver
flexible solutions ensuring our
healthcare customers continued
to get access to the information
and products as required.
Clinically trained teams,
therapeutic focus and our
digitally enabled offering are our
differentiators. With a continued
investment in quality recruitment,
operational excellence and
business development we saw
several new client wins across
multiple geographies. Despite
Covid-19 having an impact on all
markets in which the Commercial
& Clinical division operates, our
expertise and flexibility delivered
9.6% organic gross profit
growth across our Commercial &
Clinical division, exceeding our
expectations, and emphasising
our role as a trusted partner to
our clients and customers across
Europe. While lockdowns saw
the cancellation of many elective
procedures across Europe and
the increased activity across our
health systems challenged the
traditional face to face interactions
with stakeholders, by combining
clinically trained teams, strong
manufacturer relationships
and established supply chain
infrastructure we were able to
source, supply and educate our
customers on products within our
critical care portfolio.
MedTech
Our focus going into 2020 was
the growth of our client base,
with the ability to leverage these
relationships across multiple
geographies in Europe, adding
over 15 MedTech clients over the
last 12 months. Highlighting our
ability to move across borders,
we were appointed to represent a
number of our clients in Germany
and committed to enter this
important market for Q1 2021.
With our therapeutic expertise and
our strong portfolio of physician
led products we will continue
to focus on the growth of our
MedTech offering into key markets
across Europe.
Due to the delay in certain elective
procedures throughout 2020,
we have seen shifts in our sales
patterns across specialties. As
health systems realigned to meet
immediate needs during the
pandemic we saw strong growth
in the areas of critical care, patient
monitoring and decontamination.
Commercial & Clinical
Year ended 31 December
Revenue
Gross profit
Gross profit margin
2020
€’000
269,780
92,193
34.2%
Growth
2019
€’000
204,031
76,754
37.6%
Reported
32.2%
20.1%
(340)bps
Constant
Currency
32.8%
20.6%
Focusing on innovation we
signed new agencies who
provide specialised equipment
to carry out comprehensive
decontamination of high-use
clinical environments. Importantly
this enabled Uniphar to assist our
customers in identifying potential
ways of reducing turnaround times
and increasing the throughput
of procedures and patients. We
saw a strong return in the level
of elective procedures being
carried out in the second half of
the year. With the pandemic still
a focus we continue to monitor
the situation in all our markets,
ensuring we are well placed to
provide ongoing solutions for
both our manufacturer clients and
healthcare customers.
Driving long-term success is a key
focus for Uniphar, we continue to
invest heavily in our people and our
teams. We have made a number
of additional appointments to our
senior management teams across
the UK and Europe to drive future
growth. All teams leverage the
central support services across HR,
Finance, Quality and IT to deliver
consistent operational excellence,
while enabling local market
expertise at a commercial level.
Pharma
Our Pharma business unit
provides insight-driven, multi-
channel solutions for our
pharmaceutical partners. Our
approach enables our teams
to engage with healthcare
professionals in a manner which
is effective in delivering clear,
targeted information that helps all
healthcare stakeholders.
In a regulated environment
where face to face meetings
have become more difficult, our
Pharma business unit's digitally
enabled, multi-channel account
management teams have been
able to add value for our clients
and their targeted customers. With
infrastructure, databases, and the
ability to build specialist teams,
our Pharma business experienced
high organic gross profit growth
in 2020. Success was driven
by our teams’ ability to renew
contracts with existing clients and
implement new business wins
at pace. The growth of Pharma
within the Commercial & Clinical
division has resulted in a change
in the overall divisional gross
profit margin percentage. Over
the last 12 months, Uniphar has
built and deployed several multi-
channel enabled teams across our
targeted markets and continue
to successfully offer existing
pharmaceutical clients services
across Ireland, the UK, Benelux
and the Nordics.
The Covid-19 crisis has
significantly accelerated the
structural shift towards digitally
enabled communications in the
healthcare market. The acquisition
of Diligent Health Solutions, with
its enhanced call centre services,
brings additional capabilities to
our Commercial & Clinical division.
Post-acquisition we have seen
several cross-selling opportunities,
with the additional skill sets of
medical information and patient
concierge services providing
value to our partners. While US-
based, our focus is to enable
these service offerings across our
Commercial & Clinical and Product
Access targeted geographies.
New wins and a strong
speciality focused
business development
pipeline demonstrate
that Uniphar’s fully
integrated multi-
channel enabled
solution, underpinned
by its expanded
digital capabilities,
is a differentiator
and compelling
alternative for speciality
manufacturers.
Outlook
The ability of the Commercial
& Clinical division to continue
to grow through the market
disruption caused by the Covid-19
pandemic, shows strength inherent
in Uniphar’s offering. Expansion
into Benelux and the Nordics
has been successful and will
continue to provide opportunities
to grow our long–standing
manufacturer partnerships into
new geographies. In the medium-
term, the Group is focused on
identifying further Pharma and
MedTech acquisitions to build
out our growing platform, serving
our clients across multiple
geographies.
Our Strategy
Read more on
page 16
52
Uniphar plc Annual Report 2020
Performance Review
53
Product Access
"
Achieving strong growth across the
board this year, we continue to see our
Product Access division deliver on its
strategic potential as a driver of growth
for the Group."
2020
Number of employees
215+
Number of countries
operating in
160+
% of revenues
generated outside
Ireland
73%
Over the last 12 months, the
business outperformed on
expectations, returning 28.9%
organic gross profit growth.
Product Access has made
significant progress towards
the goal of becoming a leading
player in the global managed
access market.
Providing unlicensed and
speciality medicines to specific
patients in specific markets
around the world, both the On
Demand and Exclusive Access
business units performed ahead of
expectations in 2020. The strength
of this performance was driven
by the successful integration of
Durbin into the Group and the
achievement of the synergies
identified at the time of its
acquisition in 2019. A combination
of a highly skilled team, strong
manufacturer relationships and
digital infrastructure together
with Durbin’s global distribution
capability has resulted in winning
several key projects over the last
12 months.
The acquisition of healthcare
technology company Innerstrength
in March 2020, combined with the
enhanced call centre capabilities
of Diligent Health Solutions,
enhances Uniphar’s ability to
implement global patient-centric
managed access programmes
(MAPs). While the acquisition of
RRD International, with its highly
experienced clinical team, enables
our organisation to design and run
specific MAPs.
On Demand – extending
global capabilities
The division’s On Demand
service, which provides access to
unlicensed or difficult to source
medicines continues to grow.
Benefiting from the expertise of
our global sourcing team and
efficiencies delivered through our
E-commerce platform, we are
focused on meeting the growing
global demand for unlicensed
medicines.
The integration of Durbin further
extends our reach and enables
improved procurement and
global sales network. The surge
in requirements for certain
medicines, brought about by the
Covid-19 pandemic has resulted
in increased activity in specific
therapeutic areas.
Product Access
Year ended 31 December
Revenue
Gross profit
Gross profit margin
While this is positive from a
business perspective, it is a
situation we continue to monitor
closely.
Durbin’s specialism in complex
and bespoke distribution has
enabled Uniphar to meet the
growing demand for the supply
of medicines and medical
devices to Non-Governmental
Organisations (NGOs). Aligned
with our sustainability objectives,
we have increased focus on
shaping the divisional capabilities
to help meet patient needs, where
supply chains can be complex
and situations on the ground
difficult. We have received positive
support from our manufacturer
clients and have negotiated
several procurement contracts to
deliver products directly from the
manufacturer to NGOs.
Exclusive Access –
patient-centric offering
During 2020, the Exclusive Access
business achieved significant
organic gross profit growth,
contributing to the overall strong
divisional performance. Continued
growth is due to the large number
of new programme wins over
the last 18 months, with 15 new
exclusive access programmes
won in 2020. Increased scale
has created several new
business opportunities in specific
therapeutic areas with key
programmes being extended
into new geographies. The
impact of Covid-19 has resulted
in the postponement of the
reimbursement processes on
certain products, extending
programme durations beyond
forecasted timelines.
2020
€’000
187,505
30,423
16.2%
2019
€’000
132,245
17,199
13.0%
Growth
Reported
41.8%
76.9%
320bps
Constant
Currency
43.2%
78.5%
Focused on
providing unlicensed
and speciality
medicines to specific
patients around
the world, both
the On Demand
and Exclusive
Access business
units exceeded
expectations in 2020.
Outlook
We continue to build the
platform supporting the growth
of Product Access. With our
recent acquisitions we have
enhanced Uniphar’s existing
offering to manufacturer clients.
With increased investment in
place, supported by a strong
management team, we see
continued double-digit organic
gross profit growth across
the division.
Targeting primarily the post-
licence, pre-reimbursement
phase of the product lifecycle,
the combination of Uniphar’s
long standing reputation with
manufacturers and Durbin’s global
distribution capability has proved
attractive to the manufacturers
of speciality medicines. The
integration of Innerstrength’s
web-based technology, which
facilitates patient education
and treatment adherence, has
enhanced the development of the
Group’s new patient support portal
‘uniphi’. Continued investment
in our digital infrastructure helps
manufacturers capture real world
data to assist them with local
reimbursement processes.
Long-term success in Exclusive
Access will be achieved through
our capacity to deliver services
globally. The acquisition of
Durbin provided Uniphar with
the distribution capability to
deliver to over 160 countries
across the world. Our enhanced
communication capability through
the combined acquisition of
Diligent Health Solutions and
Innerstrength has allowed us to
implement virtual interactions
with healthcare stakeholders
internationally, enabling Uniphar
to deliver our patient-centric
programmes for our manufacturer
clients worldwide.
Our Strategy
Read more on
page 16
54
Uniphar plc Annual Report 2020
55
Performance Review
Supply Chain
& Retail
"
A strong performance delivered in
2020, underlining Uniphar's essential
role as a key part of the national
health infrastructure."
2020
Number of employees
1,200+
Market Share
c. 50%
Retail pharmacy
network
346
Our Strategy
Read more on
page 16
The combination of our warehouse
capacity and the efficiency of our
supply chain operations enabled
us to get product to customers
and patients in even the most
trying of conditions.
In the early stages of the
pandemic, the Pre-Wholesale
team supported our manufacturers
to ensure continuity of supply
of specific products identified
for the treatment of Covid-19.
We continue to support our
manufacturers with their changing
requirements as the pandemic
landscape continues to evolve.
Brexit remained a significant
factor as manufacturers finalised
preparations for the end of the
transition period on 31 December
2020 and the final withdrawal
of the UK from the EU. In
preparation, we supported our
manufacturers requirement to
hold additional stock to mitigate
against any disruption of supply to
customers and patients.
The collaborative planning
of our team underpinned our
effective response to these two
unprecedented situations which
has strengthened our relationships
with our manufacturers and
customers alike.
The Supply Chain & Retail
division has had a strong year,
despite the significant pressure
put on the pharmaceutical
supply chain, both in Ireland
and globally, as a result of the
Covid-19 pandemic.
The normal patterns of demand
were disrupted during the year, but
despite this, the pharmaceutical
supply chain from pre-wholesale
through to wholesale and
pharmacy remained robust, and
Uniphar continued to fulfil its role
as a key part of the national health
infrastructure in Ireland.
Despite the pandemic, we
continued to work on our strategic
objectives around providing our
retail pharmacy customers with
additional services to support their
profitability and moving with them
towards a ‘one-pipe supply’.
In Q4 2020, we acquired the
Hickey’s Pharmacy Group, one of
the top five retail pharmacy brands
in the Irish market. The acquisition
brings to 346 the number of
pharmacies owned, franchised, or
supported by Uniphar, giving us
real scale in the Irish market.
Pre-Wholesale - delivers a
strong performance
The Pre-Wholesale business
delivered a strong performance
again this year, despite the
pressures of both Brexit and the
Covid-19 pandemic.
Supply Chain & Retail
Year ended 31 December
Revenue
Gross profit
Gross profit margin
2020
€’000
2019
€’000
1,366,569
1,329,007
94,636
6.9%
86,649
6.5%
Growth
Reported
2.8%
9.2%
40bps
Constant
Currency
2.8%
9.2%
Wholesale – solid
performance in demanding
conditions
The patterns of demand in 2020
were not typical, with many of the
usual seasonal peaks and troughs
made redundant by the impact of
the Covid-19 virus. At the start of
the pandemic there was a huge
spike in demand as the public
reacted to the first lockdown. For
a period of three weeks, the
number of products picked
and packed everyday reached
double the normal levels. Our
warehouse teams worked around
the clock to meet that demand and
demonstrated just how robust our
distribution operation is.
Our overriding aim throughout
2020 has been to keep our
colleagues safe and ensure that we
could continue to do the essential
work of distributing medicines to
every hospital and pharmacy in
the country. All teams that can
work from home have been doing
so since mid-March 2020 and
we expect this to continue. We
continue to work closely with the
HSE and other key stakeholders
to secure national supply and
maintain near normal service levels
to hospitals and pharmacies.
Our strong operational
performance during the pandemic
has led to new business, as retail
pharmacy customers recognise not
just the value of our offering, but
the reliability of our service. During
the year, we invested c.€10m in a
new large-scale distribution centre
in Annacotty, Co. Limerick, which is
due to come into operation in early
2021. When it is fully operational,
it will give us an additional 30%
capacity which will both ensure we
have the headroom to continue to
manage peaks of activity as well as
allowing us scope for growth.
Retail Pharmacy – delivering
growth to our customers
and partners
2020 has been an extremely
challenging year for all retail
pharmacies. As the most
accessible source of health advice
throughout the pandemic, retail
pharmacy teams have done an
exceptional job and have made
significant changes to how they
work to help manage the extra
pressure. We have been working
hard to support our community
pharmacy customers and our own
retail pharmacy network.
Our symbol group offering
delivers significant value to our
stakeholders and enables us to
leverage our digital platforms, drive
efficiency and deliver services
through community pharmacies.
The emphasis on 2020 has been
on supporting pharmacies to make
the most of digital technology
in their businesses. One of the
side effects of the Covid-19
crisis has been an acceleration
in the sector’s adoption of digital
technologies, with most GP
surgeries moving to E-prescribing
almost overnight and many
customers moving from store to
online shopping, retail pharmacies
have had to adapt quickly.
Although our community pharmacy
customers had the ability to order
online for a number of years, we
further enhanced this offering
with a new upgraded version
of Marketplace, which is our
E-commerce hub that allows our
community pharmacy customers to
find the products they need at the
best price available.
We have been working with our
symbol group customers to
develop and enhance the Life
and Allcare consumer websites
and both brands have developed
patient apps, which allow
pharmacists to communicate with
their patients and strengthen the
clinical, as well as the commercial,
link between customer/patient and
their local Life or Allcare pharmacy.
The earnings accretive acquisition
of the Hickey’s Pharmacy Group
further strengthens our vertical
integration from manufacturer
directly to consumers. A strategic
acquisition for Uniphar, it provides
a strong brand to complement
our established Life and Allcare
pharmacies, with successful stores
in key suburban locations.
Outlook
Looking forward, it is almost
certain that some changes that
occurred in the market as a
result of Covid-19 will continue
long after the pandemic is under
control. A key focus for 2021
will be the integration of the
Hickey’s Pharmacy Group and the
realisation of the synergies in the
acquisition. We see the move to
digital platforms increasing across
the sector and we are continuing
our investment in digital, both
within our own business and in
support of our symbol group and
other customers. We expect further
growth in own brand products and
the consumer business, as our
symbol and support membership
grows. Our investment in our
Limerick facility will give us
a second hi-tech distribution
centre in Ireland and provide the
operational capacity to allow us
to continue to grow market share
across the division.
56
Uniphar plc Annual Report 2020
57
Performance Review Governance
Company Information
as at 31 December 2020
Board of Directors
M. Pratt (Chairman)
G. Rabbette (Chief Executive Officer)
T. Dolphin (Chief Financial Officer)
P. Dempsey (Chief Commercial Officer)
J. Berkowitz
P. Hogan
M. McConn (Resigned 26 January 2021)
G. Penny
P. Staunton
S. Webb
Company Secretary and
Registered Office
A. McCarthy
Uniphar plc
4045 Kingswood Road
Citywest Business Park
Co. Dublin
D24 V06K
Registered Number
224324
Auditors
PricewaterhouseCoopers
Chartered Accountants and
Statutory Audit Firm
One Spencer Dock
North Wall Quay
Dublin 1
D01 X9R7
Legal Adviser
William Fry
2 Grand Canal Square
Dublin 2
D02 A342
Nomad and Euronext
Growth Advisor
Davy
Davy House
49 Dawson Street
Dublin 2
D02 PY05
Registrar
Computershare Investor Services
(Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82
Principal Bankers
Bank of Ireland
Allied Irish Banks
Ulster Bank Ireland
Brokers
Davy
Davy House
49 Dawson Street
Dublin 2
D02 PY05
RBC Capital Markets
Thames Court
One Queenhithe
London
EC4V 3DQ
Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET
Investor Relations
B. O'Shaughnessy
Uniphar plc
4045 Kingswood Road
Citywest Business Park
Co. Dublin
D24 V06K
Website
Further information on Uniphar plc
is available on the Group’s website:
www.uniphar.ie
59
Company Information
60
Board of Directors
62
Corporate Governance Report
Audit, Risk and Compliance Committee Report
71
Nominations and Governance Committee Report 75
79
Remuneration Committee Report
95
Directors’ Report
58
Uniphar plc Annual Report 2020
Governance
59
Board of Directors
Committee Memberships:
Nominations & Governance
Experience:
Maurice was appointed Chairman
in 2009, having joined the Board
as a non-executive director in
July 2003. Former Chief Executive
Officer of Tesco Ireland Limited
and C&C plc, Maurice is currently
Chairman of Barretstown,
European Movement Ireland,
Nursing Homes Ireland, Serious
Fun Children’s Network and
B&B Ireland.
Principal Skills:
Leadership, Strategy,
International Markets,
Sustainability and Governance
Experience:
Tim joined Uniphar from Topaz
Energy Limited where he was a
member of the senior management
team. Prior to this, Tim held various
senior finance positions with
Royal Dutch Shell plc in Ireland.
He is a Chartered Accountant
by training and is a director of
the Pharmaceutical Distributors
Federation Ireland CLG.
Principal Skills:
Industry, Leadership,
Strategy, Finance,
Legal & Regulatory,
International Markets,
M&A
Committee Memberships:
Audit, Risk & Compliance
Nominations & Governance
Experience:
Paul was the Chief Financial
Officer at Nelipak Healthcare until
early 2020, a specialist healthcare
packaging business in Rhode
Island, US. Paul was previously
Director of Development and Chief
Financial Officer of the Clondalkin
Group. He trained in Audit and
Business Advisory in PwC and is a
Chartered Accountant by training.
Principal Skills:
Industry, Leadership,
Strategy, Finance,
International Markets,
M&A
Ger Rabbette
Chief Executive Officer
Nationality: Irish
Appointed: March 2010
Independent: No
Padraic Dempsey
Chief Commercial Officer
Nationality: Irish
Appointed: March 2017
Independent: No
Jeff Berkowitz
Non-Executive Director
Nationality: American
Appointed: September 2020
Independent: Yes
Committee Memberships:
Nominations & Governance
Experience:
An industry veteran, Ger joined
Uniphar from Celesio, where
he was Managing Director of
Movianto Ireland and Head of
Celesio Manufacturing Solutions
Ireland. Ger is a Chartered
Accountant by training and has
held a range of senior positions
in the healthcare sector with
Cahill May Roberts and the wider
Celesio Group.
Principal Skills:
Industry, Leadership,
Strategy, Finance,
International Markets,
Sustainability and Governance,
M&A
Experience:
Padraic joined Uniphar in 2014
from UDG Healthcare plc where
he held a number of senior
management positions. He is the
Chief Commercial Officer of the
Group and was appointed to the
Board in March 2017. A business
and legal graduate, Padraic has
significant senior management
experience in the healthcare sector.
Principal Skills:
Industry, Leadership,
Strategy, Legal & Regulatory,
International Markets,
M&A
Committee Memberships:
Nominations & Governance
Remuneration
Experience:
Jeff has extensive global
healthcare experience, having
held senior executive positions
at UnitedHealth Group-Optum,
Walgreens Boots Alliance Inc. and
Merck & Co Inc. Jeff is CEO of Real
Endpoints LLC, and serves on the
board of directors of H. Lundbeck
A/S, Esperion Therapeutics, Inc.,
and Zealand Pharmaceuticals, Inc.
Principal Skills:
Industry, Leadership, Strategy,
Legal & Regulatory,
International Markets,
Sustainability and Governance,
M&A
Maurice Pratt
Non-Executive Chairman
Nationality: Irish
Appointed: July 2003
Independent: No
Tim Dolphin
Chief Financial Officer
Nationality: Irish
Appointed: July 2010
Independent: No
Paul Hogan
Non-Executive Director
Nationality: Irish/American
Appointed: June 2019
Independent: Yes
Committee Memberships:
Audit, Risk & Compliance
Remuneration
Experience:
Sue held a variety of sales and
marketing roles for Novartis
Pharmaceuticals, UK, Limited,
including Country President,
UK & Region Head of Country
Management, Europe. Previously,
Sue worked for Ortho McNeil in
the US and Janssen-Cilag in the
UK, gaining significant experience
in pricing, strategy, country re-
organisation and pharmaceutical
product launches.
Principal Skills:
Industry, Leadership, Strategy,
International Markets,
M&A
Committee Memberships:
Audit, Risk & Compliance
Experience:
Liz is a qualified pharmacist
and former president of the
Irish Pharmacy Union (IPU).
With over thirty years’ of
pharmaceutical experience, and
over twenty years’ experience
in advocacy and negotiation at
both political and administrative
levels of Government on behalf
of the pharmacy profession,
Liz has developed an in-depth
understanding of the Irish,
European and International
Healthcare Systems.
Principal Skills:
Industry, Leadership, Legal &
Regulatory,
Sustainability and Governance
Experience:
Padraic is a retired community
pharmacist having run his own
community pharmacy for 35
years. He has been actively
involved on many pharmacy
industry committees and has
served on the Council of the
Pharmaceutical Society of Ireland.
He also has a keen interest in the
environment, climate change,
as well as community and social
issues and brings this perspective
to Board discussions.
Principal Skills:
Industry, Leadership,
Sustainability and Governance
Legal & Regulatory
Jim Gaul
Non-Executive Director
Nationality: Irish
Appointed: January 2021
Independent: Yes
Ger Penny
Non-Executive Director
Nationality: Irish
Appointed: August 2018
Independent: No
Aisling McCarthy
General Counsel &
Company Secretary
Nationality: Irish
Appointed: May 2019
Sue Webb
Non-Executive Director
Nationality: English
Appointed: June 2019
Independent: Yes
Liz Hoctor
Non-Executive Director
Nationality: Irish
Appointed: January 2021
Independent: Yes
Padraic Staunton
Non-Executive Director
Nationality: Irish
Appointed: September 2009
Independent: No
Directors' Report
Read more on
page 95
Committee Memberships:
Audit, Risk & Compliance
Nominations & Governance
Experience:
Jim is a Certified Public
Accountant and former Chief
Financial Officer of Sanofi Ireland
& Mount Carmel Private Hospital.
He has a strong track record
in financial management and
global healthcare and is a former
director of Carraig Insurance and
Valeant Pharmaceuticals Ireland.
He is currently a non-executive
director of a number of OPKO
Health subsidiaries.
Principal Skills:
Industry, Leadership,
Strategy, Finance,
International Markets,
Sustainability and Governance
Experience:
Ger is the Chief Financial Officer
of the Sisk Group, where he leads
the finance and IT functions.
He is also Chairman of Sisk’s
non-construction businesses
and has recently been appointed
as a director of the Irish Cancer
Society. A qualified accountant and
chartered director, Ger spent 12
years with Diageo plc., where he
held a number of senior finance,
strategy and operational roles.
Principal Skills:
Industry, Leadership, Strategy,
Finance, Sustainability and
Governance
Experience:
Aisling joined Uniphar in
May 2019 from William Fry
where she spent 12 years
specialising in corporate
M&A transactions and
restructurings. She is
responsible for the Group’s
legal, company secretarial,
risk and compliance functions
and also Chairs the Group’s
Sustainability Council.
60
60
Uniphar plc Annual Report 2020
Governance
61
61
Uniphar plc Annual Report 2020Performance Review
Corporate
Governance Report
It is the Board’s intention to continue to
enhance its corporate governance framework
and transition to compliance with the UK code
"
In Uniphar, we have a strong
commitment to ensuring that high
standards of corporate governance are
maintained throughout the organisation.
As the Group grows, the Board ensures
that we are taking a reasonable
strategic approach and managing risk
and resources in a balanced and
ethical manner. "
The Company adopted the QCA
Code of Corporate Governance in
June 2019 in advance of the IPO.
The QCA Code has become a
widely recognised benchmark for
corporate governance of small and
mid-sized companies, particularly
companies admitted to trading on
AIM and Euronext Growth. The
QCA Code provides the Company
with the framework to ensure that
a strong level of governance is
maintained, as part of building
a successful and sustainable
business for all of its stakeholders.
It is the Board’s intention to
continue to enhance its corporate
governance framework and
transition to compliance with the
UK Code.
This report outlines the clear
roles and structures we have in
place for managing corporate
governance and seeking to ensure
that the Group is positioned
to meet corporate governance
standards at all times.
Uniphar plc
Board of
Directors
During 2020 and early 2021, the Board made significant progress in achieving its target of UK
Code compliance.
» The appointment of Jeff Berkowitz, Jim Gaul and Liz Hoctor saw a further increase in
independence on the Board bringing the total number of independent Non-Executive Directors
to five.
» The resignation of John Holly, Mark Moran and Marie McConn, each of whom were
deemed not to be independent by the Board, also increased the proportion of independent
representation on the Board.
» Changes to Board Committee compositions bringing all Committee compositions in line
with UK Code recommendations.
» Extensive changes to the remuneration policy for Executive Directors in line with the
recommendations of the UK Code, to include bonus deferral, pension alignment with wider
workforce, introduction of minimum shareholding requirements and post-employment
shareholding requirements as well as a formal clawback policy on annual bonus.
» Expanded the remit of the Nominations Committee to the Nominations and Governance
Committee.
» Appointment of Jim Gaul as designated Non-Executive Director responsible for workforce
engagement.
Audit, Risk and
Compliance
Committee
Nominations
and Governance
Committee
Remuneration
Committee
Chief
Executive
Officer
Chair
Paul Hogan
Chair
Jeff Berkowitz
Chair
Sue Webb
Ger Rabbette
See page
71 to 74 for our
Committee Report
See page
75 to 78 for our
Committee Report
See page
79 to 94 for our
Committee Report
See page
12 to 14 for our
CEO Report
62
Uniphar plc Annual Report 2020
Governance
63
Corporate Governance Report continued
Corporate Governance
Statement
The Directors acknowledge the
importance of good corporate
governance and believe that it
creates shareholder value by
improving performance, whilst
reducing or mitigating the risks
that a company faces as it seeks
to create sustainable growth over
the medium to long-term.
The QCA Code requires the
Company to apply ten principles
of good corporate governance
and publish certain disclosures
in its annual report and also on
its website. The Company has
committed to applying these
principles within its business and
the full details of the application of
these principles are contained on
our website, www.uniphar.ie.
Board of Directors
At the date of signing, the board
comprises of 11 Directors,
three of whom are Executive
Directors and eight of whom,
including the Chairman, are Non-
Executive Directors, reflecting
a blend of different experience
and backgrounds. Of the Non-
Executive Directors, five of these
have been deemed by the Board
to be independent. Biographies of
all of the Directors are set out on
pages 60 to 61.
The Board believes that there is
an appropriate balance between
Executive and Non-Executive
Directors for governing the
business effectively and promoting
shareholder interests. The Board
believes this combination of
Executive and Non-Executive
Directors allows it to exercise
objectivity in decision making
and control of the Group’s
business.
Division of Responsibilities
The Board retains ultimate
accountability for good governance
and is responsible for monitoring
the activities of the Executive
team. The Board has a collective
responsibility and legal obligation
to promote the interests of
the Group and are collectively
responsible for defining corporate
governance arrangements. Ultimate
responsibility for the quality of, and
approach to, corporate governance
lies with the Chairman.
The roles of Chairman and Chief
Executive Officer are not combined
and there is a clear division of
responsibilities between them.
The Chairman's responsibility is
to lead the Board and this ensures
that the Board is effective and
efficient. The Chief Executive
Officer is accountable to the Board
for all authority delegated to the
Executive team.
Chairman
The Chairman has overall
responsibility for corporate
governance throughout the Group.
He leads and chairs the Board,
ensuring that Committees are
properly structured and operate
with the appropriate terms of
reference. He ensures that all
Directors contribute effectively in
the development of the Group’s
strategy and consider the inherent
risk included in the implementation
of the chosen strategy. The
Chairman is involved in the
development of strategy, and
setting objectives together with
the Chief Executive Officer and
oversees communication between
the Company and its shareholders.
Chief Executive Officer
The Chief Executive Officer
provides leadership and
management of the Group, leads
the development of objectives,
strategies and performance
standards as agreed by the Board.
Board Diversity
Board Composition
Male
Female
2
5
Chairman
Executive
Non-Executive
Independent
Non-Executive
1
2
3
9
64
This report outlines the clear roles
and structures we have in place for
managing corporate governance
and seeking to ensure that the Group
is positioned to meet corporate
governance standards at all times
Directors Report
Read more
on page 95
He monitors, reviews and
manages key risks and strategies
with the Board, and ensures
that the assets of the Group are
maintained and safeguarded.
He also takes a leading role on
investor relations activities to
ensure communications and
the Company’s standing with
shareholders and financial
institutions is maintained. The
Board has delegated responsibility
for the management of the Group,
through the Chief Executive
Officer, to the Executive team.
Non-Executive Directors
The Non-Executive Directors
contribute independent thinking
and judgement through the
application of their external
experience and knowledge,
scrutinise the performance of
management, provide constructive
challenge to the Executive
Directors and ensure that the
Group is operating within the
governance and risk framework
approved by the Board.
Company Secretary
The Company Secretary is
responsible for providing a clear
and timely information flow to the
Board and its Committees and
supports the Board on matters of
corporate governance and risk. All
Directors have access to the advice
and services of the Company
Secretary, who is responsible to
the Board for ensuring that Board
procedures are complied with. The
appointment and removal of the
Company Secretary is a matter for
the Board.
Senior Independent Director
In September 2020, Paul Hogan
took over as Senior Independent
Director from Heather Ann
McSharry. This role provides a
sounding board for the Chairman
and serves as an intermediary
for the other Directors when
necessary. The Senior
Independent Director is also
available to shareholders if they
have concerns.
Committees
The Board is supported in its
function by the Audit, Risk and
Compliance Committee, the
Nominations and Governance
Committee and the Remuneration
Committee and reports from each
of these Committees are contained
on pages 71 to 94.
Schedule of Matters
Reserved for the Board
The Board meets at least six times
a year to review, formulate and
approve the Group’s strategy,
budgets and corporate actions
and oversee the Group’s progress
towards its goals.
A formal Schedule of Matters
Reserved for the Board is in place
and is reviewed annually. Specific
responsibilities reserved for the
Board include:
»
»
responsibility for the overall
leadership of the Group and
setting the Group’s values and
standards;
approval of the Group’s
purpose, strategic aims and
objectives;
» promoting the long-term
»
sustainable success of the
Group, generating value for
shareholders and contributing
to wider society;
embodying and promoting
a corporate culture that is
based on sound ethical values
and behaviours and using it
as an asset and a source of
competitive advantage;
»
» undertaking an assessment of
the prospects of the Group,
over a defined period and
determining why it considers
that period to be appropriate;
ensuring maintenance of an
effective system of internal
control and risk management;
approving changes to the
structure, size and composition
of the Board, following
recommendations by the
Nominations and Governance
Committee;
»
» undertaking a formal and
rigorous review of its own
performance, that of its
Committees and individual
Directors, and the division of
responsibilities; and
considering the balance of
interests between shareholders,
employees, customers and the
community.
»
Appointment of Directors
The Board has a formal Board
Appointments Policy in place which
sets out the procedure and criteria
to be applied when considering the
appointment of new individuals to
the Board.
65
Uniphar plc Annual Report 2020Governance
The Company Secretary also
helps keep the Board up to
date on corporate governance
developments and liaises with the
Nominated Adviser and Euronext
Growth Adviser on areas of AIM
and Euronext Growth Rules
requirements.
The Directors have access to the
Nominated Adviser and Euronext
Growth Adviser, Company
Secretary, lawyers and auditors as
and when required and are able to
obtain advice from other external
bodies when necessary.
The Board also has a formal Board
induction procedure in place which
provided the basis for the induction
of the three new Independent
Non-Executive Directors to the
Board during 2020 and early 2021.
When new Directors join the Board
they are provided with extensive
briefing materials on the Group and
its operations, as well as training
where appropriate.
Board Evaluation
The Board believes that, in addition
to dealing with any matters as
they arise, it is appropriate to carry
out a formal evaluation of the
performance of the Board each
year. This is intended to ensure
that the Board remains effective,
well-informed and able to make
high quality and timely decisions
for the benefit of all stakeholders
of the Group. The Chairman is
responsible for overseeing the
annual evaluation process.
In line with best practice, the Board
intends to carry out a separate
external evaluation of the Board at
least once in every three years.
Corporate Governance Report continued
As part of this procedure, the
Nominations and Governance
Committee evaluate the balance of
skills, experience, independence,
diversity and knowledge currently
on the Board and the formal Board
evaluation procedure referred to
below facilitates this assessment.
During 2020, in line with the
Board Appointments Policy, the
Board engaged the services of
external consultants to assist
with the search for additional
Independent Non-Executive
Directors for the Board.
Re-election of Directors
The Articles provide that at least
one third of the Company’s
Directors must retire annually by
rotation and are then eligible for
re-election in accordance with
the Articles.
Directors appointed to the
Board during a year must submit
themselves to shareholders for
election at the AGM following
their appointment. The Board has
determined that when a Non-
Executive Director has served
on the Board for more than nine
years, that Director will be subject
to annual re-election.
The Board is cognisant that while
our Chairman is the longest
serving member of our Board, the
UK Code allows some flexibility
in relation to Chair tenure to
facilitate effective succession
planning and the development
of a diverse board. The Board is
also cognisant of the significant
change to Board and Committee
composition over the past 18
months. The Board believe
Maurice Pratt, as Chairman has
been instrumental in maintaining
a sense of stability and continuity
through this period of change
and believe that he is best placed
to continue to steer the Board
through these transitional times.
Induction, development
and training
The Directors believe that the
Board has significant industry,
financial, strategic and governance
experience, possessing the
necessary mix of experience, skills,
personal qualities and capabilities
to deliver the strategy of the Group
for the benefit of shareholders
over the medium to long-term.
The skills of each of our directors
are highlighted in the director
biographies on pages 60 to 61.
In 2019, the Board engaged
external advisers to carry out an
independent review of the Board
structure and composition. This
detailed review focused on the
skills and experience of each Board
member and identified areas where
additional experience and diversity
would be appropriate to enhance
the collective Board composition.
During 2020, the Board continued
to build on the succession planning
and skills analysis work carried
out in 2019 to ensure that new
appointments to the Board not only
contributed to the independence
and diversity of the Board but also
continued to enhance the skillset of
the Board as a whole.
In addition, during 2020 the Board
engaged external experts including
legal advisers, accountants,
Nominated Adviser and Euronext
Growth Adviser and brokers in
accordance with the normal legal
and financial processes associated
with being a company trading on
AIM and Euronext Growth.
The Board is kept abreast of key
developments regarding corporate
governance and AIM and Euronext
Growth regulation by its Nominated
Adviser and Euronext Growth
Adviser, and its legal advisers.
The Company’s legal advisers
provide updates on relevant legal
and governance issues, with the
Nominated Adviser and Euronext
Growth Adviser providing the Board
with training on the AIM Rules
and Euronext Growth Rules (as
applicable) and refresher training
as and when required.
The annual performance evaluation
procedure includes an evaluation of:
»
»
»
the composition and structure
of the Board, to include balance
of skills, experience and
knowledge on the Board;
the Boards’ diversity, to include
gender, social and ethnic
backgrounds, and cognitive
and personal strengths;
independence of the Board and
individual Directors;
» how the Board works together
as a unit to achieve objectives
and fulfil responsibilities;
» how the Board discharges its
roles and responsibilities;
» Board processes, to include
effectiveness of meetings,
agendas, forward planning
and reporting;
the Chairman’s leadership style
and approach;
»
» performance of Committees;
»
and
individual Directors’
performance and ability to
contribute effectively and
ongoing commitment to their
role as Director and, if relevant,
Committee membership.
In January 2020, six months
post-IPO, and following the
implementation of new Board
reporting formats, the Board
conducted a short-form evaluation
of its performance since IPO to
ensure that the progress made in
the period prior to and since IPO
was being monitored. In November
2020, the Board conducted a full
Board evaluation in line with the
Annual Performance Evaluation
Procedure, including individual
director self-assessments led by
the Chair.
The Non-Executive Directors
also met with the Chair during
2020 without Executive Directors
present and discussed a wide
range of issues including those
considered by the various
standing Board Committees.
In addition, the Non-Executive
Directors, led by Paul Hogan
as Senior Independent Director,
met without the Chair present in
November 2020, to review the
performance of the Chair.
Board succession planning
The Board plans for its own
succession with the assistance of
the Nominations and Governance
Committee and has prepared a
succession plan to ensure that the
Board has continuity of relevant
skills and independence in the
future. In so doing, the Board
considers the skill, knowledge
and experience necessary to
enable it to meet the strategic
vision for the Group.
During 2020 and early 2021, the
Board made significant progress
in implementing the Board’s
succession plan. Changes
included the appointment of
Jeff Berkowitz, Jim Gaul and Liz
Hoctor as Independent Non-
Executive Directors, further
enhancing the independent
representation on the Board and
the resignation of John Holly, Mark
Moran and Marie McConn, each
of whom were deemed by the
Board not to meet the UK Code’s
independence criteria.
Attendance at Board and Board Committee meetings in 2020
Board
Audit, Risk and
Compliance
Committee
Nominations
and Governance
Committee
Remuneration
Committee
Director
M. Pratt
G. Rabbette
T. Dolphin
P. Dempsey
H. McSharry
P. Hogan
J. Holly
M. McConn
M. Moran
G. Penny
P. Staunton
S. Webb
J. Berkowitz
A
13
13
13
13
11
13
7
13
11
13
13
13
1
B
13
13
13
13
11
13
7
10
10
12
13
12
1
A
-
-
-
-
-
7
2
-
-
7
-
2
-
B
-
-
-
-
-
7
2
-
-
7
-
2
-
A
2
1
-
-
1
1
-
2
1
-
-
-
1
B
2
1
-
-
1
1
-
2
1
-
-
-
1
A
2
-
-
-
-
-
-
-
-
-
2
2
-
B
2
-
-
-
-
-
-
-
-
-
2
2
-
Column A indicates the number of meetings held during the period in which the Director was a member of the
Board and/or Committee.
Column B indicates the number of meetings attended during the period in which the Director was a member of the
Board and/or Committee.
66
67
Uniphar plc Annual Report 2020Governance
Corporate Governance Report continued
These changes, coupled with
consequent changes to the Board’s
Committees, are a further step
towards ensuring that the Board is
well placed to meet its commitment
of compliance with the UK Code.
Independence
During 2020, the Board engaged
the services of independent
consultants to undertake a search
for additional Independent Non-
Executive Director candidates to
further enhance independence on
the Board.
Of the existing Non-Executive
Directors, the Board has
determined that Paul Hogan, Sue
Webb, Jeff Berkowitz, Jim Gaul
and Liz Hoctor are independent
in character and judgement and
that there are no relationships
or circumstances which could
materially affect or interfere with
the exercise of their independent
judgement. The Board has also
determined that each of the other
Non-Executive Directors are not
independent based on either their
tenure on the Board or nominee
status arising from the acquisition
of Sisk Healthcare.
Time Commitment
Each Board member commits
sufficient time to fulfil their duties
and obligations to the Board and
the Group. Expectations in terms of
time commitment are clearly set out
in the terms of appointment of all
Non-Executive Directors.
There were 13 formal meetings
of the Board during 2020. Details
of Directors’ attendance at those
meetings are set out on page 67.
The Chairman sets the agenda for
each meeting, in consultation with
the Chief Executive Officer and
the Company Secretary. Board
papers are circulated to Directors in
advance of meetings.
During 2020, John Holly, Mark
Moran and Heather Ann McSharry
each stepped down from the Board.
In September 2020, Jeff Berkowitz
was appointed to the Board.
68
Board Committees
The Board has three permanent
Committees to assist in the
execution of its responsibilities.
These are the Audit, Risk and
Compliance Committee, the
Nominations and Governance
Committee and the Remuneration
Committee. Ad hoc committees are
formed from time to time to deal
with specific matters, for example,
during 2020 the Board constituted
a sub-committee to consider
the implications of the CREST
settlement system migration on the
Company and the convening of the
EGM in relation thereto.
Each of the permanent Committees
has terms of reference under which
authority is delegated to them by
the Board and a copy of the terms
of reference of each Committee
are available on the Company’s
website, www.uniphar.ie. The Chair
of each Committee reports to the
Board on its deliberations, attends
the AGM and is available to answer
questions from shareholders.
A number of changes were
made to the composition of the
Committees during 2020 and early
2021 to ensure compliance with the
corporate governance standards.
The current membership of each
Committee, details of attendance,
each member’s tenure, and the
roles and responsibilities of each
Committee are set out in the
individual Committee reports on
pages 71 to 94.
Audit, Risk and Compliance
Committee
The Audit, Risk and Compliance
Committee consists of four Non-
Executive Directors: Paul Hogan,
Sue Webb, Jim Gaul and Liz
Hoctor. Paul Hogan is Chair of this
Committee and is considered by
the Board to be independent. Paul
Hogan and Jim Gaul also have
extensive financial experience
and expertise. It can be seen
from the Directors’ biographical
details appearing on pages 60
to 61 that the members of the
Committee bring to it a wide range
of experience and expertise.
The Committee met seven times
during 2020. The Chief Financial
Officer, and senior members of
the Group Finance team, normally
attend meetings of the Committee
while the Chief Executive Officer
attends when necessary. The
external auditors attend as required
and have direct access to the
Committee Chair at all times.
During the year, the Committee met
with the external auditors without
management being present.
Nominations and Governance
Committee
The Nominations and Governance
Committee consists of the
Chairman, the Chief Executive
Officer and three Non-Executive
Directors: Jeff Berkowitz, Paul
Hogan and Jim Gaul. Jeff Berkowitz
is Chair of this Committee and
is considered by the Board to
be independent. The Committee
assists the Board in ensuring that
the composition of the Board and
its Committees is appropriate to the
needs of the Group.
During 2020, the terms of
reference of this Committee
were expanded to include
general governance matters
and the Committee was
renamed as the Nominations and
Governance Committee.
In discharging its responsibilities,
the Committee uses the services
of independent consultants as
required.
Remuneration Committee
The Remuneration Committee
consists of two independent
Non-Executive Directors: Sue
Webb and Jeff Berkowitz. Sue
Webb is Chair of this Committee
and is considered by the Board to
be independent.
The Committee receives advice
from leading independent
compensation and benefits
consultants when necessary.
Communications with
Shareholders
The Board recognises that
understanding and meeting
shareholder needs and
expectations is a key business
objective. Therefore, the Company
has established a framework for
stakeholder engagement which
identifies the key stakeholders of
the Group (including shareholders),
sets out mechanisms for engaging
and communicating with them and
details key responsibilities.
The Board are committed to
engaging with the international
financial community and
shareholders on a regular basis.
A dedicated investor relations
function is in place, focused on
continuing to increase awareness
of Uniphar across the international
financial community. During
2020, the Company conducted
more than 200 meetings and
conferences calls across 133
existing and prospective investors.
A summary of key conferences is
included below (not exhaustive):
Date
January 2020
March 2020
May 2020
May 2020
May 2020
September 2020
September 2020
October 2020
November 2020
November 2020
Activity
Davy Investor Conference, New York & Boston
2019 Preliminary Results & Roadshow (virtual)
AGM (virtual)
Stifel Roadshow (virtual)
Hauck & Aufhauser Roadshow (virtual)
Interim Results & Roadshow (virtual)
Hauck & Aufhauser “Stock Pickers” Conference (virtual)
Berenberg Conference & Fireside Chat (virtual)
Goodbody Conference (virtual)
Jefferies Conference (virtual)
The Group’s focus on investor
relations and the growing interest
from equity market participants
is evidenced via the growing pool
of independent equity analysts
providing research coverage on the
Group. Engaging with the analyst
community is a key part of how
Uniphar communicates with the
capital markets. During the year,
Uniphar carried out over 30 calls
with analysts providing market
updates and ongoing company
education while also supporting
the initiation of three new equity
analysts. Five independent research
analysts now provide equity
research on the Group.
Additionally, shareholders are kept
up to date on matters of a material
substance and/or a regulatory
nature, including M&A activity
where relevant, via announcements
made through the regulatory news
service. On a day-to-day basis, the
Group welcomes ad-hoc queries
directly via telephone, post or
email and up to date details and
a host of shareholder tools are
available on the Group’s website,
www.uniphar.ie.
The investment community is
increasingly interested in the
Group’s Environmental, Social
and Governance initiatives, a
summary of which can be found
in the Group’s Sustainability and
Governance Report on pages
34 to 46.
The Group has an investor relations
policy in place to:
» outline the Company’s
»
»
methods of communication to
shareholders;
ensure that the Company
communicates effectively with
all shareholders; and
ensure that the Company
discloses information correctly,
in a balanced, transparent and
timely way and simultaneously
to shareholders.
The Board is kept up to date with
the views of the shareholders
through regular updates from
the investor relations team
following engagement with
shareholders. The Board also
receives briefings from the Group’s
brokers on topics such as market
perception, investor feedback, the
development of our share register
as well as regulatory topics.
The Board views the Annual
Report as well as its interim results
as key communication channels
through which progress in meeting
the Group’s objectives and
updating its strategic targets can
be given to all shareholders.
The Company’s AGM is an
opportunity for shareholders
to meet with the Chairman and
other members of the Board. The
meeting is open to all shareholders,
giving them the opportunity to
ask questions and raise issues
during the meeting or more
informally following the meeting.
The results of the Company’s AGM
are announced via the regulatory
news service. Whilst restrictions
in relation to Covid-19 in 2020
meant that the Company’s AGM
could not take place in person,
the AGM was held via conference
call and shareholders were given
the opportunity to vote and raise
questions in advance.
69
Uniphar plc Annual Report 2020Governance Corporate Governance Report continued
The Group is mindful that its corporate culture
transcends all three business divisions. The Group
is committed to reviewing and further developing
and communicating its corporate culture across
the enlarged Group and to its stakeholders
In January 2021, the Company also
issued notice to its shareholders
of an EGM which took place in
February 2021 to approve the
migration of the Company’s
securities from CREST to Euroclear
Bank Belgium. Due to Covid-19
restrictions, attendance at that
meeting was limited to those
required to make up the quorum
necessary to pass the resolutions.
Shareholders were encouraged to
vote by proxy and raise questions
in advance of the meeting. Like
the 2020 AGM, the February EGM
was held via a conference call
facility which provided shareholders
with an opportunity to listen to
the events of the meeting. The
migration of the Company’s
securities to Euroclear Bank
Belgium was approved at the EGM
and has a number of consequences
for shareholders. A full explanation
of the migration process and it
implications for shareholders are
contained in the circular issued with
the Notice of EGM which can be
found on the Company’s website at
www.uniphar.ie.
The Company has also
implemented a “Significant
Votes Against a Resolution
Procedure” which will ensure
that where 20% or more of votes
have been cast against the
Board’s recommendation for a
resolution at a general meeting of
shareholders, the Board will engage
with shareholders and seek to
understand their views in relation to
the significant vote against.
Workforce Engagement
In January 2021, Jim Gaul was
appointed to the Board as our
designated Non-Executive
Director responsible for workforce
engagement. We believe that
having a designated workforce
engagement role at Board level,
coupled with the appointment of
Lorraine Kenny, our new Chief
People Officer, marks an era of
more formal engagement with
our workforce and increased
representation of the views of our
workforce at senior management
and Board level.
Internal control and risk
management
The Directors have overall
responsibility for the Group’s
system of internal control and
for reviewing its effectiveness.
This system is designed to help
the Group meet its business
objectives by appropriately
managing, rather than eliminating,
the risks to those objectives.
Through the activities of the Audit,
Risk and Compliance Committee,
the effectiveness of these internal
controls is regularly reviewed.
The Group’s Risk Management
Policy is designed to provide the
framework to identify, assess,
monitor and manage the risks
associated with the Group’s
business. During 2020, the Group
conducted an extensive review
of the Group’s Risk Register
including a bottom-up reporting
exercise to ensure that the Group
Risk Register accurately reflects
all material risks across all areas
of the Group’s business. Further
details in relation to the Group’s
risk management framework are
set out on pages 24 to 32.
Culture
The Directors are committed to
upholding ethical values and
behaviours both at Board level and
throughout the Group.
The Schedule of Matters Reserved
for the Board includes an obligation
on the Board to:
»
»
embody and promote a
corporate culture that is
based on sound ethical values
and behaviours and use it
as an asset and a source of
competitive advantage; and
establish a framework for
setting, promoting, monitoring
and assessing culture.
The Group is mindful that its
corporate culture transcends
all three business divisions. The
Group is committed to reviewing
and further developing and
communicating its corporate
culture across the enlarged Group
and to its stakeholders.
The appointment of Lorraine
Kenny, a highly experienced HR
professional, to the role of Chief
People Officer is a significant
step in driving the focus on
culture across our continuously
growing Group.
Audit, Risk &
Compliance
Committee
Report
"
As chairman of the Audit, Risk and
Compliance Committee, I am pleased to
present the report for the Committee for
the year ended 31 December 2020."
Membership
The members of the Committee
are set out in the table below, along
with the date of each members’
appointment, and details of their
attendance at Committee meetings
during the year. During 2020, John
Holly retired from the Board and
the Committee and Sue Webb was
appointed to the Committee. In
January 2021, on their appointment
to the Board, Jim Gaul and Liz
Hoctor were both appointed to
the Committee and Ger Penny
resigned from the Committee. The
Committee member’s biographies
are set out on pages 60 to 61.
The Committee is appointed by the
Board and the terms of reference
of the Committee state that the
composition should comprise of a
Committee
Member
Position
minimum of three Independent Non-
Executive Directors, to the extent
possible. Following changes to the
composition of the Committee in
January 2021, the Committee now
consists of four Independent Non-
Executive Directors and therefore
meets this independence criteria.
The members of the Committee
bring to it a wide range of
experience and expertise including,
in the case of Paul Hogan and
Jim Gaul, significant financial
experience and knowledge of
financial reporting principles.
Role of the Committee
The Committee is responsible
for ensuring that the financial
performance of the Group is
accurately reported.
The Committee’s role includes:
» monitoring the integrity of the
financial statements of the
Group;
» reviewing significant financial
reporting issues;
» reviewing the effectiveness of
the internal controls;
» monitoring and reviewing the
effectiveness of the internal
audit function; and
» making recommendations to
the Board on the appointment
or removal of the external
auditors as well as approving
their remuneration and terms
of engagement and evaluating
their performance.
A copy of the terms of reference of
the Committee is available on the
Group’s website, www.uniphar.ie.
Appointed
Resignation
Attendance
Paul Hogan
Committee Chair (Independent)
June 2019
Sue Webb
Ger Penny
John Holly
Jim Gaul*
Independent Non-Executive Director
Sept 2020
Non-Executive Director
June 2019
Jan 2021
Non-Executive Director
Sept 2010
May 2020
Independent Non-Executive Director
Jan 2021
N/A
N/A
N/A
N/A
7 / 7
2 / 2
7 / 7
2 / 2
0/0
0/0
Liz Hoctor*
Independent Non-Executive Director
Jan 2021
*Jim Gaul and Liz Hoctor were appointed to the Committee after the end of the relevant reporting year.
70
Governance
71
Uniphar plc Annual Report 2020
Audit, Risk & Compliance Report continued
Audit, Risk and Compliance Committee Activities
Financial reporting
Review of the annual and interim reports and related statements
Consider accounting policies and the impact of new accounting standards
Review of the Annual Report, and confirm if it is fair, balanced and understandable
Consider key audit and accounting issues and judgements
Review principal risks and uncertainties
Review goodwill impairment assessments
Review the accounting for significant acquisitions
Approve going concern and viability statements
Governance
Corporate governance update
Risk management review
Directors’ Compliance Statement policy and procedures
Internal audit and risk management controls
Approve and review the internal audit plan and resources
Review of internal audit reports and monitor progress on open actions
Assessment of the principal risks and effectiveness of internal control systems
External auditors
Review the independence, objectivity, performance and effectiveness
Approval of the audit engagement letter and audit fees
Approval of the audit plan and identification of significant risks
Meetings of the Committee
The Committee met seven times
during 2020. The Chief Financial
Officer and senior members of
the Group Finance team attend
meetings of the Committee while
the Chief Executive Officer attends
when necessary. The external
auditors attend as required
and have direct access to the
Committee Chair at all times.
During the year, the Committee met
with the external auditors without
management being present.
Financial Reporting and
Key Areas of Focus
The Committee has an important
oversight role in providing the
Board with assurance as to the
propriety of the financial reporting
process. As part of this role, the
Committee considers significant
accounting policies and any
changes made to them together
with material judgements and
estimates. During the year, the
Committee reviewed the clarity
and integrity of the disclosures
in the financial statements and
completed an in-depth review
of the goodwill impairment
assessment, going concern
assessment and acquisition
accounting. These reviews
included discussions with both
senior management and the
external auditor.
The Committee reviewed the
Annual Report and confirmed
to the Board that, in its view, it
was fair, balanced and provides
the information necessary for
shareholders to assess the
Group’s performance, business
model and strategy.
Goodwill Impairment
Assessment
The Committee considered the
carrying value of goodwill in
the 2020 financial statements
together with the recoverability of
the carrying value through future
cash flows. For the purposes
of its annual impairment testing
process, the Group assesses the
recoverable amount of each of
the Group’s cash generating units
(CGUs) based on the calculation of
the value-in-use. The Committee
reviewed the goodwill impairment
methodology and specifically
assessed the key assumptions
used to estimate the recoverable
amount of each CGU, including
future cash flows and discount
rates applied in the calculation of
the value in use, along with the
sensitivity analysis performed.
The Committee found the
methodology to be robust and
the results of the assessment,
together with the disclosures in
note 10, to be appropriate. The
goodwill impairment test was of
particular focus by the external
auditors who provided a detailed
assessment of their analysis to
the Committee.
management are contained on
pages 24 to 32.
Internal Audit
The Committee is responsible
for monitoring and reviewing
the operation and effectiveness
of the Internal Audit function
including its focus, plans, activities
and resources.
During 2020, as presented in the
financial statements, the level
of non-audit fees received by
PwC was €1.2m. The non-audit
services performed by PwC
during the year largely related to
advisory work in connection with
due diligence and tax advice on
acquisitions completed during
the year.
Acquisition Accounting
During 2020, the Group
completed four acquisitions with
a strong strategic fit and also the
acquisition of two independent
community pharmacies. For
each of these acquisitions,
the Committee discussed with
management and the external
auditors the accounting treatment
of the consideration paid, the
costs incurred for each transaction
and the related judgements.
The Committee is satisfied
that the accounting treatment
is appropriate.
Going Concern Assessment
As part of the process of preparing
the Going Concern Statement, a
thorough review is carried out on
the Group’s forecasts, projections
and available banking facilities,
taking account of possible
changes in trading performance
and the principal risks and
uncertainties facing the Group.
The Committee reviewed the
going concern assessment and
are satisfied that the results
are appropriate.
Risk Management
The Group’s internal control and
risk management framework is
embedded within the organisational
structure. The Committee is
responsible for reviewing the
adequacy and effectiveness of the
internal control system and risk
management on behalf of
the Board.
During the year, the Committee
reviewed the process followed by
the Group to identify and manage
risk and to determine the principal
risks faced by the Group. The
Committee is satisfied that the risk
management process is robust.
Further details on the Group’s risk
The Committee reviewed and
approved the internal audit plan
for the year having considered
the adequacy of the team’s size
and expertise within the function.
During the year, the Committee
received regular reports from the
Head of Internal Audit summarising
findings from the work of Internal
Audit and the responses from
management to address these
findings. The Committee monitors
progress on the implementation
of the action plans on significant
findings to ensure these are
completed satisfactorily.
External Auditor
The Committee has an important
role in supporting the Board in
discharging its duties by providing
independent oversight over the
external audit.
Independence and
Objectivity of External
Auditor
The Committee is responsible for
ensuring that the external auditor
is objective and independent. PwC
as external auditor is precluded
from engaging in certain non-audit
services which would compromise
its independence, violate any
laws and regulations and affect its
appointment as external auditor.
The Committee has determined
that for taxation services which
are permissible under the relevant
auditor independence rules that
such services may be procured by
the Group from our auditors. The
Committee has also determined
that the auditor, subject to
appropriate safeguards on their
independence, may be engaged
to provide permitted financial due
diligence services.
The Committee performed a
review of the audit and non-
audit services provided by the
external auditor and the fees
charged for those services in
respect of the year ended 31
December 2020. Following this
review and the confirmation in
writing received from the Group’s
external auditor re-affirming its
independence and objectivity, the
Committee is satisfied as to PwC’s
independence and objectivity.
As a listed entity, the external
auditor is required to rotate the
audit partner responsible for the
Group audit every five years.
The current audit partner has
completed his first year, following
the rotation of the previous audit
partner who had completed a
full term.
Effectiveness
The Committee is also responsible
for assessing the effectiveness of
the external audit process and for
communicating the results of this
assessment to the Board. In doing
so the Audit, Risk and Compliance
Committee considers the quality
of service, the quality of the
reports produced by the external
auditor, feedback from the finance
team and meetings held with the
external auditor.
The external audit plan for the
year ended 31 December 2020
was presented by PwC to the
Committee at its meeting in
October 2020. The Committee
reviewed and appropriately
challenged the external auditor
before agreeing the proposed
audit scope and approach.
PwC subsequently presented
a detailed report of their audit
findings to the Committee at its
meeting in February 2021.
72
Governance
73
Uniphar plc Annual Report 2020 Audit, Risk & Compliance Report continued
The Committee has an
important oversight role in
providing the Board with
assurance as to the propriety of
the financial reporting process
Independent
Auditors' Report
Read more on page 104
Nominations &
Governance
Committee
Report
In its assessment of the external
auditor, the Committee had
full regard to the auditor’s
competence, the quality
and efficiency of the audit,
and whether the audit fee is
appropriate in relation to the
size, complexity, and risk and
control profile of the Group. After
taking into account all of the
above factors, the Committee
continues to be satisfied with
the performance of PwC and has
informed the Board accordingly.
Areas of Focus for 2021
Looking ahead to 2021, the
Committee will continue to
provide oversight on areas of
key judgements, in addition to
focusing on the financial reporting
process, internal controls and
risk management.
On behalf of the Committee
Paul Hogan
Chair of the Audit, Risk and
Compliance Committee
"
On behalf of the Committee I am
pleased to present the report of the
Committee for the year ended 31
December 2020, which provides a
summary of the Committee’s role and
responsibilities, and how the Committee
discharged these during 2020. "
I succeeded Heather Ann
McSharry as Chair of the
Nominations and Governance
Committee on my appointment to
the Board in September 2020.
Membership
The members of the Committee
are set out in the table on page 76,
along with the date of appointment
of each member and details of
their attendance at Committee
meetings during the year.
2020 and early 2021 saw
significant change to the
composition of the Committee. In
September 2020, Mark Moran and
Heather Ann McSharry stepped
down from the Board and I was
appointed to the Board and as
Chair of the Committee.
At that time Ger Rabbette and
Paul Hogan were also appointed
to the Committee. In January
2021, Jim Gaul was appointed to
the Committee on his appointment
to the Board and Marie McConn
resigned from the Committee on
her resignation from the Board.
Biographies of each Committee
member are set out on pages 60
and 61.
During 2020 and early 2021, the Committee recommended and the Board approved a number of
significant changes to further enhance the corporate governance framework of the Group:
» The appointment of Jeff Berkowitz, Jim Gaul and Liz Hoctor bringing the total number of
Independent Non-Executive Directors to five.
» Changes to Board Committee compositions bringing all Committee compositions in line with UK
Code recommendations.
» Expanded the remit of the Nominations Committee to the Nominations and Governance
Committee.
» Designation of Jim Gaul as Non-Executive Director responsible for workforce engagement.
74
Governance
75
Uniphar plc Annual Report 2020 Nominations & Governance Committee Report continued
Committee Member
Position
Appointed
Resignation Attendance
Jeff Berkowitz
Committee Chair (Independent)
Sept 2020
Maurice Pratt
Ger Rabbette
Paul Hogan
Non-Executive Chairman
Chief Executive Officer
Oct 2009
Sept 2020
Independent Non-Executive Director
Sept 2020
N/A
N/A
N/A
N/A
Marie McConn
Non-Executive Director
Oct 2009
Jan 2021
Heather Ann McSharry
Committee Chair (Independent)
June 2019
Sept 2020
Mark Moran
Jim Gaul
Non-Executive Director
May 2019
Sept 2020
Independent Non-Executive Director
Jan 2021
N/A
0/0*
1/1
2/2
1/1
1/1
2/2
1/1
1/1
* Jim Gaul was appointed to the Committee following the end of the reporting period.
The Committee is appointed by the
Board and the terms of reference
of the Committee state that the
composition should comprise
of a minimum of three Directors,
the majority of whom must be
Independent Non-Executive
Directors. Changes made to the
composition of this Committee
during 2020 and early 2021 mean
that this Committee now comprises
a majority of Independent Non-
Executive Directors.
Each appointment to the
Committee is for a term of up
to three years, which may be
extended by up to two further
three-year terms, provided the
Director in question continues to
meet the criteria for membership
of the Committee. The terms of
reference of this Committee also
provide that the Chairperson of
the Board shall be a member
of this Committee and as such,
Maurice Pratt continues his
position on this Committee
notwithstanding he has exceeded
three consecutive terms.
Under the terms of reference,
the Chair of the Committee may
be either the Chair of the Board
or another Independent Non-
Executive Director. Following
my appointment to the Board in
September 2020, I was pleased
to be appointed as Chair of the
Committee.
76
Role of the Committee
The Committee is responsible
for overseeing succession
planning for the Board and senior
management and assessing the
leadership needs for the Group in
terms of the ability of the Group to
compete effectively. In that regard
the Committee’s roles include:
»
reviewing the structure, size
and composition of the Board
including the skills, knowledge
and experience of the Directors;
» making recommendations to
the Board with regard to any
changes to its composition or
that of the Committees;
identifying and nominating
candidates to fill Board
vacancies;
»
» overseeing the performance
evaluation of the Board; and
succession planning for senior
management.
»
In January 2021, the terms of
reference of the Committee were
expended to include oversight of
general governance matters and
the Committee was renamed as
the Nominations and Governance
Committee.
with by the Committee included
the following:
»
»
»
» Board succession and
retirement by rotation;
evaluation of potential
Independent Non-Executive
candidates;
recommendation of the new
Independent Non-Executive
Directors for appointment to the
Board and Committees;
resignations of the outgoing
Directors;
composition of the Committees;
review of Board policies to
enhance Board governance,
including appointments,
induction and evaluation; and
review of terms of reference of
the Committee with a view to
expanding its remit to cover
governance matters.
»
»
»
Board and Committee
Composition
Elections and re-elections at AGM
The Articles provide that at least
one third of the Directors must
retire annually by rotation and the
terms on which they are eligible
for re-election. Re-appointment is
not automatic.
A copy of the terms of reference of
the Committee is available on the
Group’s website, www.uniphar.ie.
Directors seeking re-election
are subject to a performance
appraisal which is overseen by
the Committee.
Meetings of the Committee
The Committee met twice during
2020. The principal matters dealt
Directors appointed to the
Board during a year must submit
themselves to shareholders
for election at the Annual
General Meeting following their
appointment.
The Board has determined that
when a Non-Executive Director
has served on the Board for more
than nine years, that Director will
be subject to annual re-election.
At the Company’s AGM on 26 May
2020, Maurice Pratt, Ger Rabbette
and Ger Penny were re-elected
by the shareholders in line with
the Company’s rotation policy.
Heather Ann McSharry, Paul Hogan
and Sue Webb were elected by
the shareholders following their
appointment to the Board by their
fellow Board members during
2019. In addition, Marie McConn
and Padraic Staunton were re-
elected having served more than
nine years on the Board.
Resignations of Non-Executive
Directors
During 2020, each of John Holly,
Mark Moran and Heather Ann
McSharry stepped down from
the Board and in January 2021,
Marie McConn, one of the longest
serving members of the Board,
also resigned from the Board and
the Committee. In January 2021,
Padraic Staunton also indicated
his intention to retire from the
Board at the Company’s AGM
in May 2021 which will bring the
number of directors on the Board
to ten.
John Holly, Mark Moran, Heather
Ann McSharry and Marie McConn
all contributed hugely to the Board
during their respective terms
and on behalf of the Committee
and the Board, I would like to
extend a warm thanks to each of
them for their commitment and
contributions to the Group over
their respective terms.
Appointment of Non-Executive
Directors
In September 2020, I was
appointed to the Board as an
Independent Non-Executive
Director and was also appointed
as Chair of the Committee.
In late 2020, the Board once
again engaged the services of
a leading firm of organisational
consultants to assist with the
search for additional Independent
Non-Executive Directors for the
Board who possess the skills
and diversity profile sought of
the Board. The outcome of this
process saw the appointment
of Jim Gaul and Liz Hoctor as
new Independent Non-Executive
Directors further increasing the
independent representation on
the Board. On appointment Jim
Gaul was designated as our Non-
Executive Director responsible for
workforce engagement.
Appointment of Board
Committees
During 2020, the Committee and
Board completed a further review
of the composition of the main
Board Committees (Audit, Risk
and Compliance Committee,
Nominations and Governance
Committee and Remuneration
Committee) having regard to
skills, experience, diversity and
the time required of each of
the Non-Executive Directors in
discharging their responsibilities,
as well as the recommendations
of the UK Code and the terms
of reference of each Committee
in relation to recommending
Independent representation on
those committees.
Significant changes were made
to the composition of those
committees during 2020 and
early 2021 with the result that
the Audit, Risk and Compliance
Committee and the Remuneration
Committee now each comprise of
100% Independent Non-Executive
Directors and the Nominations
and Governance Committee
now comprises a majority of
Independent Non-Executive
Directors.
Each appointment to a Board
Committee is for a term of up
to three years, which may be
extended by up to two further
three-year terms, provided the
Director in question continues to
meet the criteria for membership
of the relevant committee. With
the exception of Maurice Pratt’s
tenure on the Nominations and
Governance Committee as a
result of his position as Chair
of the Board, none of the other
committee members have served
on committees for longer than
the tenure set out in the terms
of reference.
Boardroom Diversity
The Board is keen to ensure the
Group benefits from the expertise
and insights of a high-quality Board
comprising of individuals with
an appropriate balance of skills
and experience. Each year the
Committee reviews the business’
evolving needs and the core
competencies and construct of
our Board. Diversity and equality
in all aspects remain key values in
relation to Board appointments.
Two of the Non-Executive
Directors on the Board are female
which will represent 20% of the
Board on retirement of Padraic
Staunton at the Company’s AGM
in May this year. The Board and
the Committee remain focused
on enhancing diversity and
female representation at Board
and senior management level
and the Board believe the strong
female representation at senior
management level as set out in
the Sustainability and Governance
Report on page 40 is testament
to the Group’s commitment to
diversity and equality.
Succession Planning
Board succession was a key
focus of the Committee in 2020
and significant progress was
made in implementing the Board’s
succession plan to move the
composition of the Board and its
committees closer to UK Code
compliance. 2020 and early
2021 saw a number of long-
serving and valued members of
the Board resign and three new
Independent Non-Executive
Directors were appointed. Over
the past 12 months, the number
of Independent Non-Executive
Directors on the Board increased
from three to five with the number
of Non-Executive Directors
who were deemed not to be
independent reduced from five
to two.
77
Uniphar plc Annual Report 2020Governance
Nominations & Governance Committee Report continued
Of the remaining two Non-
Executive Directors who are
deemed not to be independent,
Padraic Staunton will resign at
the Company’s AGM in May this
year. The Committee is cognisant
that whilst some further change is
required to meet the requirements
of the UK Code, it is also important
to recognise the significant
change in Board composition
in the period since IPO and the
need for the Committee going
forward to ensure stability and
continuity within the Board and its
committees.
Length of Tenure
The length of tenure on the Board
and on the three main Board
Committees as at 31 December
2020 is set out below:
Board
of
Directors
Years
Audit, Risk and
Compliance
Committee
Years
Remuneration
Committee
Years
Nominations
and Governance
Committee
Years
Executive Directors
Ger Rabbette
Tim Dolphin
Padraic Dempsey
Non-Executive Directors
Maurice Pratt
Paul Hogan
Ger Penny
Marie McConn
Padraic Staunton
Sue Webb
Jeff Berkowitz
Jim Gaul*
Liz Hoctor*
Average tenure
10.8
10.4
3.8
17.5
1.5
2.4
11.3
11.3
1.5
0.3
-
-
7.1
-
-
-
-
1.5
1.5
-
-
0.3
-
-
-
1.1
-
-
-
11.2
-
-
-
11.2
1.5
-
-
-
8.0
0.3
-
-
11.2
0.3
-
11.3
-
-
0.3
-
-
4.7
*Jim Gaul and Liz Hoctor were appointed to the Board following the end of the reporting year.
As noted above, 2020 and early
2021 saw a number of long serving
members of the Board step down.
Following Padraic Staunton’s
resignation from the Board at the
Company’s AGM in May 2021,
Maurice Pratt as Chairman will be
the only remaining Non-Executive
Director on the Board for more than
the recommended nine year period.
The Board and the Committee
are cognisant that the UK Code
allows some flexibility in relation to
Chair tenure to facilitate effective
succession planning and the
development of a diverse board.
The Board and its Committees have
seen further significant change
during 2020 and so far in 2021 as
the Board continues to transition
to UK Code compliance. In the
interests of maintaining stability
and an orderly transition at a time
of significant change, the Board
and the Committee believe that our
current Chairman is best placed to
continue to Chair the Board through
this transitional phase.
Areas of Focus for 2021
In 2021, the Committee will
continue to focus on the
implementation of its succession
plan to ensure an effective
transition to UK Code compliance.
As our business continues to
grow, the Committee will also
focus on senior management
succession planning to ensure
the Group continues to have the
depth of resources required to
compete effectively in all markets
in which it operates.
On behalf of the Committee
Jeff Berkowitz
Chair of the Nominations and
Governance Committee
Remuneration
Committee
Report
"
As Chair of the Remuneration
Committee, I am pleased to present the
report for the Committee for the year
ended 31 December 2020."
I succeeded Maurice Pratt as
Chair of the Committee in March
2020 and would like to take this
opportunity to thank Maurice for
his stewardship of the Committee,
and I would also like to thank him
for his support as I transitioned to
the role of Chair.
The objective of this Report
is to provide the shareholders
with information to enable them
to understand the remuneration
structures in place and how they
relate to the Group’s financial
performance.
The report also provides a
summary of the Committee’s roles
and responsibilities and how these
were discharged during 2020.
Group’s financial performance
during 2020 is set out in our
Financial Review section of this
Report at page 48.
Performance in 2020
Despite the challenging economic
climate created by Covid-19 the
Group delivered a strong financial
performance for 2020 at both a
gross profit and EBITDA level, with
a strong free cash flow conversion
resulting in lower than projected
net debt. The Group achieved
organic gross profit growth of
6.7%. A detailed summary of the
In May 2020, the Group paid
a dividend to shareholders of
€2m. As a result of the Group’s
strong performance in 2020,
it is proposed that, subject to
shareholder approval at the
Group’s AGM in May 2021, that a
final dividend of €4.2m will be paid
to shareholders on the register at
23 April 2021.
During 2020, the Committee proposed the following key changes to the remuneration structure for
Executive Directors, and these changes were then formally approved by the Board.
»
»
»
Introduction of the deferral of 100% of an annual bonus entitlement for a period of five years in the
form of in-market share purchases.
Increase in the base salary of Executive Directors having regard to prevailing market rates for
similar positions in companies of broadly comparable size and a number of industry specific peers.
Introduction of an annual bonus grid, based on financial and non-financial targets with specific
sustainability targets included.
» Reduction in pension entitlement to 7.5% of annual base salary in line with the average
contributions available to the Group’s wider workforce.
Introduction of a minimum shareholding requirement of 200% of base salary.
Introduction of a post-employment shareholding requirement of 200% of base salary for a period
of two years.
Introduction of a formal clawback policy on annual bonus.
»
»
»
78
Governance
79
Uniphar plc Annual Report 2020 Remuneration Committee Report continued
Remuneration
Changes in 2020
During 2020, as part of the
Group’s transition to compliance
with the UK Code, and due to
the changing environment that
the Group operates in following
its successful IPO in 2019, the
Committee performed an extensive
review of the Group’s Remuneration
Policy and the overall remuneration
structure for Executive Directors and
Non-Executive Directors. Following
this review the Committee have
taken the opportunity to make a
step change in the alignment of
the Remuneration Policy to the
requirements of the UK Code and
widely accepted best practice.
The changes implemented during
2020 saw a number of impacts on
Executive Director remuneration,
including an increase in base
salary, a decrease in pension
contribution, a deferral of gross
bonus entitlements and provisions
relating to post-termination
clawback. The Committee believes
it is necessary to look at the impact
of the totality of these changes on
Executive Director remuneration
and the context in which these
changes were made – on foot of a
strong financial performance with
progressive shareholder return
and in the context of transitioning
towards UK Code compliance in the
area of remuneration.
In reviewing the Remuneration
Policy applicable to Executive
Directors, the Committee was also
cognisant of the fact that since
Executive Director remuneration
was last reviewed, the market
capitalisation of the Group has
more than doubled which brings
with it increased demands on
the Executive Directors whilst
also demonstrating a positive
shareholder return.
The changes to Executive
remuneration implemented during
the year arose as a result of
extensive external benchmarking
carried out by our external
remuneration consultants, Willis
Towers Watson, and also the
alignment of the Remuneration
Policy with remuneration best
practices as outlined in the UK
Code. The average overall increase
of Executive Director remuneration
in 2020 was 14%, ignoring the
cash impact of the bonus deferral
implemented during the year, and
the Committee believe that this
level of increase was necessary and
appropriate in the circumstances.
The below table outlines the overall
context of the changes to the
Remuneration Policy during 2020:
Total Employee Remuneration €’000
Gross Profit €’000
EBITDA €’000
Dividend €’000
2020
136,717*
217,252
66,713
4,200
2019
% Increase
102,420
180,602
58,555
1,993
33.5%
20.3%
13.9%
110.7%
*Total employee remuneration includes €209,000 of payroll costs which have been capitalised during the year.
The Committee believe that
the changes implemented align
the Remuneration Policy to the
Group’s purpose and values, and
link to the successful delivery of
the Group’s long-term strategy and
shareholder interests and reflects
the Group’s strong performance
during the year.
The Committee has ensured that
the disclosures in relation to the
remuneration structures reflect best
corporate governance practices,
having regard to the Group’s size
and the markets on which its
shares are listed.
Changes to Committee
Composition
In January 2021, the Board
approved a number of changes to
the composition of the Committee
with the resignation of long-
standing members Maurice Pratt
and Padraic Staunton and the
appointment of Jeff Berkowitz to
the Committee. Following these
changes, the composition of the
Committee consists of 100%
Independent Non-Executive
Directors in line with the provisions
of the UK Code and the terms of
reference of the Committee.
Biographies of each Committee
member are set out on pages
60 to 61.
The Committee has ensured that the
disclosures in relation to the remuneration
structures reflect best corporate governance
practices, having regard to the Group’s size
and the markets on which its shares are listed
Committee Member Position
Appointed
Resignation
Attendance
Sue Webb
Committee Chair (Independent)
June 2019
N/A
Maurice Pratt
Non-Executive Chairman
Oct 2009
Jan 2021
Padraic Staunton
Non-Executive Director
Oct 2009
Jan 2021
Jeff Berkowitz
Independent Non-Executive Director
Jan 2021
N/A
2 / 2
2 / 2
2 / 2
0/0*
* Jeff Berkowitz was appointed to the Committee after the end of the reporting year.
Role of the Committee
The Committee’s main duties are to:
»
» determine the Group’s policy
on executive and senior
management remuneration;
review the suitability of
performance measurement
criteria for the Executive
Directors, the Chairman and
senior key management;
review the notice periods for
Executive Director employment
contracts;
»
»
» determine compensation
arrangements for early
termination of employment
contracts;
administer LTIP schemes for
Executive Directors and key
senior management; and
review the performance of
Executive Directors against key
performance indicators for the
purposes of determining annual
bonus entitlements and make
recommendations to the Board
about pay out levels.
»
Meetings of the Committee
The Committee met twice in 2020
and each member serving on the
Committee attended both meetings.
Remuneration Policy in 2021
Following the extensive re-
alignment performed in 2020,
the Committee has determined
that future salary increases for
Executive Directors will be linked
to those of the wider Group
workforce. The performance
metrics for the 2021 annual bonus
scheme mirror those for 2020. The
performance targets linked to each
metric for 2021 are commercially
sensitive and are therefore not
disclosed. There are no other
changes proposed to the
Remuneration Policy for 2021.
On behalf of the Committee
Sue Webb
Chair of the Remuneration
Committee
80
81
Uniphar plc Annual Report 2020Governance
Remuneration Committee Report continued
The Group’s policy on Executive
Director remuneration is to ensure
that the remuneration policy
promotes the achievement of
the long-term strategic goals of
the Group
Independent
Auditors' Report
Read more on page 104
Consideration of conditions
elsewhere in the Group
Whilst the Committee does not
directly consult with employees
when formulating Executive
Director pay policy, the Committee
does take into consideration
information on pay arrangements
for the wider employee population
when determining the remuneration
of Executive Directors. During 2020
the Committee recommended, and
the Board approved, the alignment
of Executive Director pension
contributions with that of the wider
workforce, resulting in the reduction
of the pension contributions of
existing Executive Directors from
20% to 7.5% effective from 1
January 2020. The appointment of
Jim Gaul to the Board in January
2021 with the remit over employee
engagement will also further
enhance consideration of wider
workforce conditions when making
Board decisions.
Remuneration Policy
The Group’s Remuneration Policy
sets out the framework for all
remuneration related policies,
procedures, and practices within
the Group. The Remuneration
Policy has been prepared in
line with the business strategy,
objectives, values and interests of
the Group and its aim is to promote
long-term sustainable success.
The Group’s policy on Executive
Director remuneration is to ensure
that the remuneration policy
promotes the achievement of the
long-term strategic goals of the
Group and appropriately reflects
the role and responsibility of the
Director. The Group recognises
the need to attract and retain
highly skilled and experienced
individuals and reflects this in its
remuneration package with a mix
of fixed and performance-linked
elements. The Group also refers to
external benchmarks when setting
remuneration levels.
The Group is committed
to promoting a transparent
remuneration structure. The
following table outlines the
key factors considered by the
Committee in accordance with the
requirements of the UK Code.
UK Code
Clarity
Uniphar Remuneration Policy
Remuneration arrangements
should be transparent and
promote effective engagement
with shareholders and the
workforce.
The annual bonus and the LTIP scheme have been designed to
incentivise Executive Directors to achieve defined, stretch targets in
line with the Group’s growth strategy. Performance measures and
targets are reviewed each year by the Committee to ensure that they
continue to be clear and appropriate.
Simplicity
Remuneration structures should
avoid complexity and their
rationale and operation should be
easy to understand.
Risk
Remuneration arrangements
should ensure reputational
and other risks from excessive
rewards, and behavioural risks
that can arise from target-based
incentive plans, are identified
and mitigated.
Predictability
In 2020, the Committee introduced a new grid-based bonus
structure to reflect a scale of performance which has been externally
benchmarked. The move to the bonus grid-system supports the
Committee’s aim of operating a simple remuneration structure
designed to align the Executive Directors interests with those of
shareholders in achieving the Group’s growth strategy.
The Remuneration Policy was designed to provide an appropriate level
of remuneration to recruit and retain the necessary skill and talent
to develop and deliver the business strategy, with the objective of
delivering strong growth in a sustainable and focused way to deliver
long-term value to stakeholders.
The range of possible values of
rewards to individual directors
and any other limits or discretions
should be identified and explained
at the time of approving the policy.
The Committee believe it is important for the Executive Directors and
senior management, that a significant proportion of the remuneration
package is performance related. The potential value and composition
of Executive Directors remuneration packages at below threshold, at
threshold, at budget and maximum scenarios are outlined on page 92.
Proportionality
The link between individual
awards, the delivery of strategy
and the long-term performance
of the company should be clear.
Outcomes should not reward
poor performance.
Alignment to Culture
Incentive schemes should drive
behaviours consistent with
company purpose, values and
strategy.
Payments of the annual bonus requires the delivery against ambitious
strategic targets for the Group. The performance measures are directly
aligned to the Group’s strategy and KPIs. The vesting of the Group’s LTIP
is directly aligned to the delivery of significant growth in the Group’s share
price over the period to 31 December 2024.
The Committee has direction to exercise judgement and discretion in
authorising remuneration outcomes to ensure that they are appropriate
and reflective of overall performance.
The Committee is cognisant that the Remuneration Policy is aligned
and benchmarked to market leaders, competitors, and industry
standards, to ensure that it is fair and competitive.
Uniphar places a strong emphasis on working responsibly and
sustainably and have introduced a specific sustainability and
governance measure as part of the new bonus grid. Details of how
the performance measures are linked to the delivery of the Group’s
strategy are outlined on page 87.
82
83
Uniphar plc Annual Report 2020Governance Remuneration Committee Report continued
Directors’ Remuneration Policy Report
Executive Directors
Executive remuneration within the Group can be broken down into the following five components which we
believe provide a fair balance between fixed and performance related remuneration.
Key
Salary
Purpose &
Link to Group
Strategy
Provide an
appropriate
level of fixed
remuneration
to recruit and
retain the
necessary skill
and talent to
develop and
deliver on
the business
strategy.
Bonus
To drive and
reward for
the delivery
of business
objectives over
the financial
year.
Operation
Detail
Performance Metric
An appropriate base
salary is set and
reviewed by the
Committee annually.
Factors taken
into consideration
include:
» skills &
experience;
» specific role
and level of
responsibility; and
» external
benchmarks,
including
economic
indicators and
geographical
scope.
The Committee
reviews the
performance of the
Executive Directors
for the purposes of
determining annual
bonus entitlements
and makes
recommendations to
the Board as to the
pay-out level.
Not Applicable
Base salaries and increases are
aligned and benchmarked to
market leaders, competitors and
industry standards.
Following the extensive salary
re-alignment performed in 2020,
the Committee has determined
that future salary increases for
Executive Director’s will be linked
to those of the wider Group
workforce.
Based on the bonus
grid, 80% of Executive
Directors bonus is linked
to Group performance
and specifically in
achieving challenging
financial performance
targets.
The remaining
20% opportunity
is linked to non-
financial performance
targets established
by the Committee,
being personal, and
sustainability and
governance objectives.
In 2020, the Board, on the
recommendation of the
Committee, approved a bonus
grid which is designed to align
management’s interests with
those of shareholders. The
maximum potential bonus
opportunity for Executive
Directors is up to a maximum of
130% of base salary. The bonus
opportunity for the achievement
of on-target Group and personal
performance targets is up to
75% of maximum opportunity,
being 97.5% of base salary.
At the threshold performance
level of 95% of target, a
bonus opportunity of 37.5% of
maximum, being 49% of base
salary is payable. Where the
threshold performance of 95% is
not reached, no bonus is payable.
In 2020, the Committee approved
the deferral of 100% of Executive
Directors’ gross annual bonus
entitlement for a period of 5 years
in the form of in-market share
purchases.
Key
Purpose &
Link to Group
Strategy
Pension To provide a
competitive,
flexible
retirement
benefit that
does not
impose any
unacceptable
level of
financial risk to
the Group.
Benefits
LTIP
To provide
other market
competitive
monetary and
non-monetary
benefits.
To reward
participants
for the delivery
of the Group’s
long-term goals
and driving
shareholder
value.
Operation
Detail
Performance Metric
Not Applicable
Reduced from 20% to 7.5% of
annual base salary applicable to
all Executive Directors with effect
from 1 January 2020 in line with
the average contributions available
to the Group’s wider workforce.
The level of benefits is set at an
appropriate market rate.
Not Applicable
Executive Directors
are enrolled into
a defined
contribution
pension plan or are
offered the
alternative of cash
allowances.
Provide a level of
benefits or specified
monetary allowances
including, healthcare
and car.
The LTIP was
established in 2018
and represents
4.8% of issued
share capital, with
Executive Directors
and key employees
participating in the
arrangement.
The Group’s current LTIP is fully
allotted and the details of each
Executive Director’s interest is set
out below.
Executive Directors will not be
allotted additional LTIP awards until
after the end of the performance
period for the existing LTIP on 31
December 2024.
Vesting of the LTIP
shares is subject to (i)
reaching the share price
targets set out below:
€1.75 – 25%
€2.25 – 25%
€2.75 – 25%
€3.30 – 25%
and (ii) remaining
in employment with
the Group on the
vesting date.
In early 2020, as
disclosed in the
2019 Annual Report,
the Board, on the
recommendation of the
Committee, approved
the extension of the
vesting date of the LTIP
to 31 December 2024
to bring this in line with
the Group’s strategy to
double 2018 pro-forma
EBITDA within five years
from IPO.
Non-Executive Directors
The Board aims to recruit high-calibre Non-Executive Directors, with broad commercial, international or other
relevant experience. Non-Executive Directors cannot individually vote on their own remuneration. Non-Executive
Director remuneration is reviewed by the Chairman and the Executive Directors and discussed and agreed by
the Board. Non-Executive Directors may attend the Board discussion but may not participate in it.
In accordance with the resolution passed at the 2019 AGM, the aggregate fees payable to the Non-Executive
Directors shall not exceed €750,000. Changes to the total aggregate remuneration of all Non-Executive
Directors is subject to shareholder approval.
84
85
Uniphar plc Annual Report 2020Governance Remuneration Committee Report continued
The Committee also performed a review of the fees payable to Non-Executive Directors during the year as
part of the overall review of the Group’s Remuneration Policy and remuneration structures. The Committee
considered the fees payable to Non-Executive Directors and, based on externally benchmarked data provided
by the Group’s remuneration consultants, concluded that the level of fees ought to be increased having
regard to the skills, experience, and time required of each of the Non-Executive Directors in discharging
their responsibilities.
The Chairman’s fee was increased by 17% from €150,000 to €176,000 per annum and the base fee for each of the
other Non-Executive Directors was increased by 17% from €60,000 to €70,000. Non-Executive Directors are also
paid additional amounts to take account of increased time commitments including acting as the Senior Independent
Director and Chair of a Board Committee. In addition, all reasonable and documented expenses incurred in the
performance of the Non-Executive Directors’ duties are reimbursed.
Annual Report on Remuneration 2020
The following table sets out the total remuneration for Directors for the years ended 31 December 2020 and
31 December 2019:
Director9
Salary/
fees
€’000
Pension/
Allowance
€’000
Other
Benefits8
€’000
Fixed
Pay
€’000
Bonus
LTIP
€’000
€’000
Variable
Pay
€’000
Total
2020
€’000
Total
2019
€’000
Executive Directors
G. Rabbette
T. Dolphin
P. Dempsey
600
400
400
45
30
30
50
45
45
Non-Executive Directors
M. Pratt
J. Berkowitz1
P. Hogan5
J. Holly4
M. McConn
G. Penny7
P. Staunton
S. Webb5
H. McSharry2, 5
M. Moran3, 7
M. Murphy6
M. Quinn6
C. Shannon6
176
29
89
25
70
70
70
81
64
40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
695
475
475
176
29
89
25
70
70
70
81
64
40
-
-
-
585
390
390
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
2,114
105
140
2,359
1,365
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
585
1,280
1,118
390
390
865
865
797
716
123
-
38
176
29
89
25
51
70
70
70
81
64
40
-
-
-
47
60
47
30
45
60
18
24
17
-
-
-
-
-
-
-
-
-
-
-
-
-
1,365
3,724
3,191
1. J. Berkowitz was appointed as a Director on 18 September 2020.
2. H. McSharry resigned as a Director on 18 September 2020.
3. M. Moran resigned as a Director on 1 August 2020.
4. J. Holly resigned as a Director on 26 May 2020.
5. P. Hogan, H. McSharry, and S. Webb were appointed as Directors on 27 June 2019.
6. M. Murphy, M. Quinn and C. Shannon resigned as Directors on 27 June 2019.
7. The 2019 charge for M. Moran and G. Penny includes fees paid in respect of 2019 and for the period of
appointment in 2018.
8. Other benefits principally include health and car allowances.
9. J. Gaul and L. Hoctor were each appointed to the Board on 26 January 2021 and therefore did not receive
remuneration during the relevant period.
Executive Directors Remuneration
Executive remuneration within the Group can be broken down into five components which we believe provide
a fair balance between fixed and performance related remuneration.
Base Salary
The base salaries of Executive Directors are reviewed annually having regard to personal performance, skills
and experience, changes in levels of responsibility, external benchmarks to market leaders, competitors, and
industry standards, as well as the pay and conditions in the wider Group.
The Committee has determined that the Executive Directors’ base salary would increase as part of the overall
remuneration structure re-alignment during 2020. The Committee believe this level of increase was necessary
following an extensive external benchmarking exercise which indicated that Executive Director base salary
levels were significantly behind those of their peers in similar markets. In reaching its recommendation in
relation to the increase in Executive Director base salary, the Committee was cognisant that the market
capitalisation of the Group had more than doubled since the Executive Director remuneration was set prior to
IPO. Taking into account other adjustments to remuneration, including a decrease in pension contribution, the
average overall increase of Executive Director remuneration in 2020 was 14% and the Committee believe this
level of increase was necessary and appropriate in the circumstances.
The following table sets out the salaries for the Executive Directors for the relevant financial year:
G. Rabbette
T. Dolphin
P. Dempsey
2020
€’000
600
400
400
2019
€’000
440
300
300
Annual Bonus
For the year ended 31 December 2020, the maximum potential bonus opportunity for Executive Directors was
up to a maximum of 130% of base salary. The bonus opportunity for the achievement of on-target Group and
personal performance targets was up to 75% of maximum opportunity, being 97.5% of base salary. At the
threshold performance level of 95% of target, a bonus opportunity of 37.5% of maximum, being 49% of base
salary is payable. Where the threshold performance target of 95% is not reached, no bonus is payable.
In setting the on-target return the Committee and the Board, were cognisant of the ambitious strategic targets
set for the Group and sought to align the Executive Directors interests with those of shareholders in achieving
the Group’s stated strategy. On this basis the Committee and the Board believe that 75% of the maximum
opportunity for achieving performance targets is appropriate.
The following table sets out the performance measures applied for Executive Directors for the year ended 31
December 2020:
% of
maximum
Link to strategy
EBITDA
Stretch EBITDA
40% Key measure of underlying profitability
25% Delivery of Group’s long-term growth strategy
Organic Gross Profit Growth
7.5% Key measure of continued client growth
Free Cash Flow Conversion
7.5% Cash generation for reinvestment or return to shareholders
Financial targets*
Personal Objectives
Sustainability and Governance
Non-Financial Targets*
80%
15% Ensure focus on strategic/functional priorities of the Group
5% Drive continuous improvements in sustainability,
governance and culture across the Group
20%
100%
* The performance targets were set by the Committee based on the Board approved budget for the year.
86
87
Uniphar plc Annual Report 2020Governance Remuneration Committee Report continued
Measure
Definition
Performance Targets
Actual Performance
Committee discretion
The Committee has retained the discretionary ability to adjust the value of an award under the annual bonus
scheme, if the award in the Committee’s opinion taking all circumstances into consideration produces an
unfair result. In exercising this discretion, the Committee may take into consideration the individual or the
Group’s performance against non-financial measures. In respect of the financial year ended 31 December
2020, the Committee have exercised this discretion in respect of potential awards under the Stretch EBITDA
annual bonus metric and have concluded it to be appropriate to make no annual bonus award in respect of
this metric during 2020 and to defer it to 2021.
Review of financial targets
Subsequent to the end of the financial year, the Committee reviewed actual performance against the targets
set for each Executive Director. Following this review, the Committee determined that the Executive Directors
should be awarded bonuses based on the achievement of financial targets as illustrated in the table below:
EBITDA
Stretch EBITDA
Organic Gross Profit Growth
Free Cash Flow Conversion
Financial targets
% of maximum
Actual %
40%
25%
7.5%
7.5%
80%
40%
0%
7.5%
7.5%
55%
Stretch EBITDA
Organic Gross Profit
Growth
Due to the commercial sensitivity of the Group’s defined financial targets these targets have not been
disclosed. The following table summarises performance for each of the financial objectives:
Free Cash Flow
Conversion
Measure
EBITDA
Definition
Performance Targets
Actual Performance
100% of the bonus %
attributed to Group
EBITDA being achieved
has been awarded.
Earnings before
exceptional items, net
finance expense, income
tax expense, depreciation
and intangible assets
amortisation.
The impact of
unbudgeted acquisitions
and disposals are
excluded.
The pay-out of the Group
EBITDA bonus is based
on the achievement of
defined threshold and
budget targets.
Threshold performance
equates to 95% of
budget EBITDA. On
achievement of threshold
performance, 50% of
the portion of the bonus
attributable to EBITDA
performance is payable.
This increases to 100%
pay-out of EBITDA
bonus when 100% of
Group EBITDA budget is
achieved. Payment for
performance between
threshold and budget is
on a pro-rata basis.
No portion of basic
bonus is paid where
actual EBITDA is below
threshold performance.
The Stretch EBITDA
measure is the Group
EBITDA including
the contribution of
unbudgeted acquisitions
and disposals.
Organic gross profit
growth is defined
as the growth from
restated prior period
gross profit to current
period gross profit as
a % of the restated
prior period value. The
restatement to the prior
year value is to include
the corresponding prior
period performance
of acquisitions and
exclude the prior period
performance of disposals.
Free cash flow
conversion is defined as
EBITDA, less investment
in working capital, less
maintenance capital
expenditure and foreign
currency translation
adjustments, divided by
EBITDA.
Achievement of stretch
bonus is based on pre-
defined Stretch EBITDA
targets.
Payment for performance
between achievement of
budget and the stretch
target is on a pro-rata
basis.
Achievement of the bonus
requires organic gross
profit growth in the year.
The Committee have
exercised their discretion,
and in light of the current
Covid-19 pandemic
have concluded that the
Stretch EBITDA element
of the annual bonus
should not be applied
in 2020 and should be
deferred to 2021.
The Committee
determined that organic
gross profit growth
exceeded the target,
and accordingly, this
element of the bonus was
achieved in full.
The Group’s free cash
flow conversion target for
the purpose of the annual
bonus is in line with
achieving the Group’s
medium-term outlook.
Actual free cash flow
conversion exceeded the
targeted performance,
and accordingly, this
element of the bonus was
achieved in full.
Threshold performance
equates to a free cash
flow conversion of 5%
below the target range
resulting in a payout
of 50%. No bonus is
paid if actual free cash
flow is below threshold
performance. 100% of
bonus is paid if budget
free cash flow is reached
or exceeded.
Payment between
threshold and budget
performance is on a pro-
rata basis.
88
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Uniphar plc Annual Report 2020Governance
Remuneration Committee Report continued
Review of non-financial targets
20% of the maximum bonus opportunity is linked to non-financial performance targets recommended by
the Committee and subsequently approved by the Board. Subsequent to the end of the financial year, the
Committee reviewed actual performance against the targets set for each Executive Director. Following this
review, the Committee determined that the Executive Directors should be awarded bonuses based on the
achievement of non-financial targets as illustrated in the table below:
Personal Objectives
Sustainability and Governance
Non-Financial Targets
% of maximum
Actual %
15%
5%
20%
15%
5%
20%
Personal objectives
The Executive Directors are also measured against personal and strategic objectives, which in 2020 focused
on Leadership and Strategy, Portfolio Optimisation, Operating Model and Talent and Succession. Performance
against these objectives is determined by the Committee by reference to key targets agreed with the
Executives at the start of the year.
These objectives include the achievement of operational goals, the Executive’s contribution to Group strategy
as a member of the Board, and specific goals related to their functional role.
Achievements
G. Rabbette
Leadership and Strategy: Developed the Group’s strategy and long-term vision and managed
its implementation during the year.
Portfolio Optimisation: Identified and executed M&A transactions to enable the
implementation of the Group’s strategy.
Operating Model: Led and embedded significant enhancements to the Group’s operating
model, driving commercial excellence, global consistency, and agility.
Talent and Succession: Took a leading role in driving talent development within the Group and
building a succession plan to meet the businesses longer term leadership needs.
T. Dolphin
Leadership and Strategy: Worked across all business and functional areas,
supporting the development and implementation of the Group’s strategy and long-term vision.
Portfolio Optimisation: Evaluated and executed M&A transactions to enable the
implementation of the Group’s strategy. Concluded the refinancing of the Group’s facilities,
almost doubling both the committed and uncommitted facilities.
Operating Model: Took an active role in driving changes to the Group’s operating model
ensuring its cost effectiveness.
Talent and Succession: Actively contributed to identifying and developing potential
future talent.
P. Dempsey
Leadership and Strategy: Worked across all business and functional areas to facilitate,
develop and progress the Group’s strategy and long-term vision.
Portfolio Optimisation: Identified and executed M&A transactions to enable the Group deliver
its acquisition growth targets.
Operating Model: Led and embedded significant enhancements to the Group’s operating
model, driving commercial excellence, global consistency and agility. Significant growth in the
number of EAPs operated throughout the year driving growth in the Product Access business.
Talent and Succession: Took an active role in the Group’s talent development and succession
planning to ensure the Group has the right team in place to deliver its long-term strategy.
Sustainability and Governance
Uniphar places a strong emphasis
on working responsibly and
sustainably. The Committee
determined that in order to
align the Executive Directors’
to these interests, that specific
performance targets should be
introduced to drive continuous
improvements in sustainability,
governance and culture across
the Group.
The Committee determined that
the Executive Directors should
be awarded the maximum bonus
opportunity attributable to
Sustainability and Governance as
a result of the following:
»
»
»
»
the implementation of a
sustainability framework and
governance structure across
the Group as outlined in the
Sustainability and Governance
Report;
the implementation of
initiatives across the Group’s
locations as outlined in the
Sustainability and Governance
Report;
successful agreement of the
new banking facility with
mechanism for sustainability
linked to agreed future interest
rate reductions; and
continued progress in
transition to full compliance
with the UK Code.
Total annual bonus payable
Following a review of the actual
performance for both the financial
and non-financial measures
against targets, the Committee
recommended, and the Board
approved a total bonus outcome
of 75% of maximum bonus
opportunity, being 97.5% of
base salary. In accordance with
the approved Remuneration
Policy for 2020, 100% of the
gross bonus achievement will be
deferred for a period of five years
in the form of in-market share
purchases. Shares purchased
in-market will be held by an Irish
registered employee benefit trust
established by the Company
and the beneficial interest will be
held by the Executive Directors
subject to restrictions on dealing
for the five-year period pursuant
to the terms of the Uniphar plc
Executive Restricted Share Plan.
The restrictions will cease in 2026
in respect of the 2020 deferred
bonus amount.
The Committee considers the level
of achievement is appropriate
and reflective of the overall
performance of the Group in the
year and the value created for
shareholders.
Clawback Policy
Bonus payments made to
Executive Directors are subject
to clawback for three years from
payment in certain circumstances
including:
» A material misstatement of the
Company’s audited financial
statements;
» A material breach of applicable
health & safety regulations; or
» Business or reputational
damage to the Company
or a subsidiary arising
from a criminal offence,
serious misconduct or gross
negligence by the individual
Executive.
Pension
All pension benefits for Executive
Directors are determined in
relation to base salary. Fees
payable to Non-Executive
Directors are not pensionable.
During 2020, as part of the
overall remuneration structure
re-alignment and to align the
Remuneration Policy with
best practice, the Committee
determined that the pension
benefits for Executive Directors
should be reduced from 20% to
7.5% of base salary in line with
average pension contributions
available to the Group’s wider
workforce, with this reduction
in effect for existing Executive
Directors from 1 January 2020.
Other Benefits
Employment-related benefits for
Executive Directors provide a level
of benefits or specified monetary
allowances including, healthcare
and car allowances.
LTIP
There were no LTIP share awards
granted to Executive Directors
in 2020 or 2019 and the existing
LTIP, which was put in place in
2018, prior to the Company’s IPO,
is now fully allotted. The existing
share awards granted to Executive
Directors which will vest on 31
December 2024 are subject to
performance conditions relating to
share price targets and remaining
in employment with the Group on
the vesting date. During 2020, the
following share price performance
conditions attributable to these
LTIP share awards were satisfied:
» 25% when the Group’s
average closing share price
reached €1.75 over a 30-day
period.
» 25% when the Group’s
average closing share price
reached €2.25 over a 30-day
period.
These shares remain subject to
the satisfaction of the employment
condition and as a result are not
yet vested. The remaining 50% of
the LTIP share awards will vest on
satisfaction of varying share price
targets as well as the Executive
Director remaining in employment
on the vesting date.
As the Company’s existing
LTIP is fully allotted, it is not
proposed to allot any additional
LTIP or share incentives to
Executives Directors, prior to the
end of the performance period
under the existing LTIP on 31
December 2024.
90
91
Uniphar plc Annual Report 2020Governance
Remuneration Committee Report continued
The table below sets out details of share awards made under the 2018 LTIP currently held by Executive
Directors.
Executive
Director
Grant Date Exercise
Price
No of share
awards at
1 Jan 2020
Granted
Vested/
Exercised
Lapsed No of share
awards at
31 Dec 2020
End of
Performance
Period
G. Rabbette
28 April 2018
T. Dolphin
28 April 2018
P. Dempsey
28 April 2018
n/a
n/a
n/a
3,685,427
2,284,965
2,284,965
-
-
-
-
-
-
-
-
-
3,685,427 31 December 2024
2,284,965 31 December 2024
2,284,965 31 December 2024
New Share Option Scheme for Senior Management
As the current LTIP scheme is fully allotted, with no scope to accommodate new employees, the Board on the
recommendation of the Committee, approved the establishment of a new Share Option Scheme in January
2021 with a reserve of 2.5% of issued share capital. Existing participants in the 2018 LTIP (including the
Executive Directors) shall not be eligible for the grant of options under the new Share Option Scheme which is
intended to incentivise key senior management who were not eligible for participation in the 2018 LTIP.
Minimum Shareholding Requirements
The Committee has sought to promote long-term shareholdings by Executive Directors, to support alignment
with shareholder interests, and as part of the overall remuneration structure re-alignment, has adopted
minimum shareholding requirements for Executive Directors. These guidelines specify that Executive Directors
should, over a period of five years from the date of appointment, build up and then retain a shareholding in the
Company with a valuation of at least equal to 2x their annual base salary.
Additionally, the Committee has adopted guidelines relating to post-employment shareholding guidelines.
These guidelines require that Executive Directors maintain their full minimum shareholding requirement of 2x
base salary for a period of two years post-employment.
Current Executive Director shareholdings at 31 December 2020 as a multiple of their base salary:
G. Rabbette
T. Dolphin
P. Dempsey
* Based on closing share price of €2.38 on 31 December 2020
Minimum
2.0x
2.0x
2.0x
Actual*
34.7x
33.2x
19.5x
CEO - Scenario
Pay Structure
Fixed Pay
Bonus
CFO - Scenario
Pay Structure
Fixed Pay
Bonus
CCO - Scenario
Pay Structure
Fixed Pay
Bonus
1,600
1,400
1,200
1,000
800
600
400
200
-
1,600
1,400
1,200
1,000
800
600
400
200
-
Below At At Maximum
Threshold Threshold Budget
Below At At Maximum
Threshold Threshold Budget
Below At At Maximum
Threshold Threshold Budget
1,600
1,400
1,200
1,000
800
600
400
200
-
92
Remuneration consists of fixed pay (base salary, pension, and benefits) and variable pay (annual bonus and
LTIP). A significant portion of Executive Directors’ remuneration is linked to the delivery of key business goals
over both the short and long-term and the creation of shareholder value. The charts above present scenarios
of the remuneration outcomes of:
Below Threshold
Pay-out levels
» Fixed Pay
» No bonus pay-out
At Threshold
» Fixed Pay
» 37.5% of maximum bonus opportunity in line with budgeted performance targets
At Budget
Maximum
» Fixed Pay
» 75% of maximum bonus opportunity in line with budgeted performance targets
» Fixed Pay
» 100% of maximum bonus opportunity in line with budgeted performance targets
Percentage change in Executive Director’s remuneration
The following table sets out the relative change from 2019 to 2020 in the remuneration earned by the
Executive Directors compared with the average percentage change for the Group’s employees:
€’000
G. Rabbette
T. Dolphin
P. Dempsey
Total Executive Directors
Average Employee Remuneration
2020
1,280
865
865
3,010
57.0
2019
1,118
797
716
2,631
55.7
% Change
14.5%
8.5%
20.8%
14.4%
2.3%
Relative Importance of Spend on Pay
The table below sets out the amount paid in remuneration to all employees of the Group compared to gross
profit, EBITDA and dividends declared in respect of the financial year:
€’000
Total Employee Remuneration
Gross Profit
EBITDA
Dividend**
2020
136,717*
217,252
66,713
4,200
2019
102,420
180,602
58,555
1,993
% Increase
33.5%
20.3%
13.9%
110.7%
*Total employee remuneration includes €209,000 of payroll costs which have been capitalised during the year.
** Reflecting progressive dividend commitment made at the time of IPO.
Payments to former Directors
There were no payments to former Directors during the year.
Payments for loss of office
There were no payments for loss of office during the year.
Advisers to the Committee
During 2020, the Group engaged the services of external remuneration consultants Willis Towers Watson.
Their advice related to the structuring of remuneration packages for executives, non-executives, and key
senior management. The total fees paid to Willis Towers Watson during the year were €29,000, these were
charged on a time and materials basis.
The Group also engaged the services of William Fry and PwC in relation to the implementation of the decisions
of the Board on remuneration during the year and the establishment of the new Share Option Scheme. No
other external advisers were engaged in respect of remuneration consulting services during the year.
93
Uniphar plc Annual Report 2020Governance
Remuneration Committee Report continued
Non-Executive Directors Remuneration
During 2020, the Committee performed a review of the fees payable to Non-Executive Directors as part of the
overall review of the Group’s Remuneration Policy and remuneration structures. The Committee considered
the fees payable to Non-Executive Directors and concluded that the current level of fees ought to be
increased having regard to the skills, experience, and time required of each of the Non-Executive Directors
in discharging their responsibilities. Fees paid to the Non-Executive Directors for the 2019 and 2020 financial
years are outlined in the Remuneration table on page 86 and the 2020 fees set out in the table reflect the
increases approved by the Board during the year.
Non-Executive Directors do not participate in any Group share incentive or award scheme.
Service Contracts/Letters of Appointment
Details of the service contracts for the Executive Directors are outlined below:
Name
G. Rabbette
T. Dolphin
P. Dempsey
Title
Date of Contract
Notice Period
Chief Executive Officer
27 June 2019
Chief Financial Officer
27 June 2019
Chief Commercial Officer 27 June 2019
12 months
12 months
12 months
The Company can terminate Executive Director employment by making a lump sum payment in lieu of notice
consisting of the basic salary for the notice period. Standard ‘cause’ provisions are included which allow the
Company to terminate without notice or the obligation to make a payment in lieu of notice. There are also
standard ‘garden leave’ provisions for all Executive Directors together with post-termination restrictions on
competing activity and non-solicitation of customers or key employees which are effective for a period of 12
months after termination.
The service contracts of each of the Executive Directors were amended to reflect the changes to the Executive
remuneration policy during the year.
Each of the Non-Executive Directors has been appointed under the terms of a letter of appointment.
Appointment is terminable by either party giving one month’s written notice or otherwise in accordance
with the Articles. Continuation of appointment is contingent on satisfactory performance, re-election (where
applicable) in accordance with the Articles and any relevant statutory provisions for the removal of Directors.
Standard ‘cause’ provisions are included that entitle the Company to terminate a Non-Executive Director’s
appointment without notice or payment of compensation.
The appointment letter includes membership of any Board Committees, the fees to be paid and the time
commitment expected. The letter also covers matters such as confidentiality, data protection and the Company’s
share dealing policy. Dates of appointment for the current Non-Executive Directors are set out below:
Name
M. Pratt
J. Berkowitz
G. Penny
P. Staunton
P. Hogan
S. Webb
J. Gaul
L. Hoctor
Date of Appointment
1 July 2003
18 September 2020
20 August 2018
25 September 2009
27 June 2019
27 June 2019
26 January 2021
26 January 2021
Directors'
Report
The Directors present their annual
report and audited Group financial
statements for the year ended 31
December 2020.
Principal activities and
review of the development
of the business
The Group is a leading
service provider within the
pharmaceutical and healthcare
sector headquartered in Ireland,
with offices in the UK, mainland
Europe, the Nordics, and the US.
By operating a strong service-
based culture and working with
our partners, we provide an
innovative range of services,
including product distribution and
the provision of specialist services
for the pharmaceutical and
healthcare sector. The business
is divided into three trading
divisions: Commercial & Clinical,
Product Access and Supply Chain
& Retail:
» Commercial & Clinical
provides sales, marketing
and distribution solutions to
multinational pharmaceutical
and medical device
manufactures on an outsourced
basis. Uniphar have built a
fully integrated multi-channel
account management solution
that is supported through
highly experienced, clinically
trained teams providing insights
and digital programmes.
We integrate these services
with our supply chain and
distribution capability to provide
a full end to end service to
manufacturers;
» Product Access consists of
two service offerings, being:
On Demand and Exclusive
Access. On Demand provides
access to pharmaco-medical
products and treatments,
by developing valuable
relationships and interactions
between manufacturers and
other healthcare stakeholders.
This business operates in
both the retail and hospital
markets in Ireland and
the UK. Exclusive Access
provides bespoke distribution
partnerships to pharmaceutical
partners for key brands, with
new programmes focused
on speciality pharmaceutical
products. Delivering a unique
patient support programme that
allows healthcare professionals
to connect with patients, on a
global basis; and
» Supply Chain & Retail provides
both pre-wholesale distribution
and wholesale distribution of
pharmaceutical, healthcare
and animal health products
to pharmacies, hospitals
and veterinary surgeons in
Ireland. The business supports
the diverse customer base
through the provision of
strong service levels coupled
with innovative commercial
initiatives. Uniphar operate a
network of pharmacies under
the Life, Allcare and Hickey’s
brands. Additionally, through
the extended Uniphar symbol
group, the business provides
services and supports that
help independent community
pharmacies to compete
more effectively.
The three trading divisions work
in synergy to allow us to support
healthcare professionals and
manufacturer customers to provide
their patients and communities
with the medicines and care that
they need.
Business review
2020 was another year of strong
growth and development for
the Uniphar Group despite the
disruption caused by the Covid-19
pandemic and the challenges
created by the exit of the UK from
the EU.
Revenues increased to €1,823.9m
from €1,665.3m a rise of 9.5%.
During 2020, the Group continued
to expand on a geographic and
market share basis and completed
four acquisitions during the year,
the Group’s intangible assets
increased by €96.7m to €374.5m
which was largely due to these
acquisitions. In the Supply Chain &
Retail division, 36 retail pharmacies
were acquired through the Hickey’s
Pharmacy Group acquisition.
The acquisition of Diligent Health
Solutions continues the growth
strategy of the Commercial &
Clinical division and marks our
entry into the US market. In Product
Access the acquisition of RRD
International adds significantly to
the existing US Product Access
capabilities and is consistent with
Uniphar's strategy to offer a global
platform across our Product Access
division, providing solutions to
meet the growing needs of partners
across the entire lifecycle of their
products. Significant growth of
20.3% was achieved in gross
profit during the year, increasing to
€217.3m from €180.6m.
Strong cash generation across the
Group, together with the execution
of a new five-year banking facility
(with the option to extend by a
further two years) agreed in July
2020 further enhances the liquidity
position of the Group. The banking
facility provides the Group with a
revolving credit facility of €150.0m
and a €90.0m uncommitted
accordion facility. The new banking
facility almost doubles the Group’s
available facilities and provides
a strong platform to support the
Group’s growth strategy and deliver
long-term value for shareholders.
94
Governance
95
Uniphar plc Annual Report 2020
Directors' Report continued
Working capital management has
always been a central focus and
in 2020 strong working capital
management saw free cash flow
exceed 100%, stripping out timing
differences due to favourable
creditor terms, in particular in
the Product Access division, free
cashflow remains strong, in excess
of 70%.
The Group’s net bank debt position
at 31 December 2020 was €34.4m
(2019: €26.6m net bank cash).
The uncertainty caused by Brexit,
which saw the UK leave the EU in
January 2020, and the continued
uncertainty into 2020 as the UK
continued negotiations on a trade
deal with the EU has been an
important consideration for the
business. The Group continues
to work with its customers and
suppliers to try and to minimise the
impact of any related disruption on
the business, on customers and
on patients. As a result, the Group
increased its stock holding during
the year to protect against potential
supply chain issues.
The Group have a number of key
performance indicators (KPIs)
which are used to monitor the
Group’s performance. These
financial KPIs are outlined further
in our key performance indictors
section on pages 20 and 21.
Covid-19
The Group continues to monitor
and respond appropriately to the
ongoing threat and risks posed
by the Covid-19 pandemic.
Uniphar plays a significant role in
healthcare infrastructure ensuring
the continuity in the supply and
distribution of much needed
medicines, medical devices and
related services. The nature of
the products and services offered
means that there is a continued
demand for pharmaco-medical
products. The measures the Group
has undertaken to respond to the
challenges posed by the pandemic
has resulted in change across its
business for staff, customers and
the community in which it operates
and serves.
The health, safety and wellbeing
of our teams has remained a key
priority during the pandemic.
Throughout the business, several
measures have been implemented
to protect our teams including
remote working where possible, use
of appropriate protective equipment
and increased sanitisation and
screening measures.
The experience of Covid-19 in
2020 has shown that the impact
is different across each of the
three divisions.
In Supply Chain & Retail, the normal
patterns of demand for medicines
and medical devices were
disrupted, with increased demand
for specific cohorts of products.
Our retail pharmacies have seen
reduced footfall during periods
of strict lockdowns. Overall the
resilience of the division resulted in
a strong performance for the year
demonstrating the key role it plays
in the national infrastructure.
In Commercial & Clinical due to
the reprioritisation of hospital
resources, non elective surgeries
were postponed, however the
requirement for these surgeries
remained and once lockdown
measures eased activities resumed
at higher levels in an effort to deal
with the backlog.
Product Access saw little disruption
due to the nature of the services
provided, being the provision
of unlicenced and speciality
medicines. In some cases exclusive
access programmes were extended
due to extensions of the pre
re-imbursement phases.
Acquisitions and disposals
The Group completed four
acquisitions with a strategic
fit during 2020 and completed
the integration of the 2019
acquisitions into the Group.
Commercial & Clinical acquired
Diligent Health Solutions during
the year, a US-based healthcare
communications company,
providing enhanced contact centre
services for both Pharma and
MedTech clients. A telehealth
company, Diligent focuses on the
delivery of medical information to
patients, HCPs and payors.
Product Access acquired RRD
International, a US-based
pharmaceutical advisory group
providing outsourced strategic
consulting and execution services
throughout the early stages
of a products development.
The RRD team has a depth of
experience, from pre-clinical trials
through to licensing, across a
broad range of product classes
and therapeutic areas and has
supported a significant number of
clients through the FDA regulatory
approval process. Product Access
also acquired Innerstrength during
the year, which provides the Group
with the enhanced ability to deliver
digitally enabled ‘patient-centric’
exclusive access programs. The
Innerstrength technology empowers
healthcare professionals to deliver
unique personalised programmes
for individual patients.
During 2020, the Supply Chain
& Retail division announced the
acquisition of Hickey’s Pharmacy
Group, Ireland’s fifth largest
retail pharmacy chain, along with
two independent community
pharmacies. These acquisitions
allow the Group to leverage its
high-tech scalable infrastructure
to deliver enhanced synergies
and to increase the division’s
buying power, consolidating its
leading position in the Irish retail
pharmacy market.
These acquisitions represent
another important development
in the delivery of Uniphar's
growth strategy.
Exceptional costs in 2020 of
€4.8m were driven largely by
acquisition activity. See note 4 for
further details of exceptional costs
incurred during the year.
Results for the year
The Group Income Statement for
the year ended 31 December 2020
and the Group Balance Sheet at
that date are set out on pages 111
and 113 respectively. The Group’s
gross profit was €217,252,000
(2019: €180,602,000) and earnings
before interest, tax, depreciation,
amortisation and exceptional items
(EBITDA) was €66,713,000 (2019:
€58,555,000).
The Group’s profit on ordinary
activities before tax was
€33,531,000 in 2020 (2019:
€26,458,000). After including
a tax expense of €5,720,000
(2019: €5,537,000) and losses
attributable to non-controlling
interests of €16,000 (2019: losses
of €105,000), the profit for the
financial year attributable to owners
is €27,827,000 (2019: €21,026,000).
There was a strong cash
performance in 2020, and despite
the Group’s significant investment
in infrastructure and strategic
acquisitions during the year, the
strong free cash flow performance
places the Group in a position of
strength with a modest leverage
and net bank debt of €34.4m at
the year end.
Total equity of the Group at 31
December 2020 was €202,535,000
(2019: €180,920,000).
Future developments
The Group has delivered a strong
performance in 2020 in the most
challenging of circumstances which
demonstrates the robustness of the
business model and the diversity of
the services and expertise provided
by the three divisions.
Looking to 2021, we have a
robust plan in place across
the three divisions and we
remain committed to building
a pan-European offering in our
Commercial & Clinical division
in addition to providing bespoke
services in the US. In Product
Access we will continue growth
through expanding the capabilities
and access to clients in the US,
both of which enhance our ability
to attract new clients and grow.
In Supply Chain & Retail, we will
continue to leverage our key
assets and grow our market share.
As we deliver on our strategy and
on the growth we promised, the
business and management team
are committed to maximising
the full potential of our recent
acquisitions and delivering long-
term value for all our stakeholders.
In terms of organic gross profit
growth we target to deliver
double-digit growth for Product
Access, mid-single digit growth
in Commercial & Clinical and
low-single digit growth for Supply
Chain & Retail.
Statement of Directors’
responsibilities
The Directors are responsible for
preparing the Directors’ Report
and the financial statements of the
Group and Company in accordance
with Irish law.
Irish law requires the Directors to
prepare financial statements for
each financial year. Under that
law the Directors have elected to
prepare Group financial statements
in accordance with International
Financial Reporting Standards
(IFRSs) and IFRSs as adopted by
the European Union and Article
4 of the IAS Regulation and have
also chosen to prepare the parent
company financial statements
under IFRSs and IFRSs as adopted
by the European Union.
Under Irish law, the Directors
shall not approve the financial
statements unless they are satisfied
that they give a true and fair view of
the Group's and Company’s assets,
liabilities and financial position as
at the end of the financial year and
the profit or loss of the Group and
Company for the financial year.
In preparing these financial
statements, the Directors are
required to:
» select suitable accounting
policies and then apply them
consistently;
» make judgements and
estimates that are reasonable
and prudent;
» state whether the financial
statements have been
prepared in accordance with
IFRS and ensure that the
financial statements contain
the additional information
required by the Companies Act
2014; and
» prepare the financial statements
on the going concern basis
unless it is inappropriate to
presume that the Group and
Company will continue in
business.
The Directors are responsible for
keeping adequate accounting
records that are sufficient to:
» correctly record and explain the
transactions of the Group and
Company;
» enable, at any time, the assets,
liabilities, financial position and
profit or loss of the Group and
Company to be determined
with reasonable accuracy; and
» enable the Directors to ensure
that the financial statements
comply with the Companies Act
2014 and enable those financial
statements to be audited.
The Directors are also responsible
for safeguarding the assets of the
Group and Company and hence
for taking reasonable steps for the
prevention and detection of fraud
and other irregularities.
Each of the Directors confirms
that they consider that the Annual
Report and Consolidated Financial
Statements, taken as a whole, is
fair, balanced and understandable
and provides the information
necessary for shareholders to
assess the Company's position,
performance, business model
and strategy.
The Directors are responsible for
the maintenance and integrity
of the corporate and financial
information included on the
company’s website.
96
97
Uniphar plc Annual Report 2020Governance
Directors' Report continued
Legislation in Ireland governing
the preparation and dissemination
of financial statements may
differ from legislation in other
jurisdictions.
Disclosure of information
to auditors
The Directors in office at the
date of this report have each
confirmed that:
» As far as he/she is aware, there
is no relevant audit information
of which the Company’s
statutory auditors are unaware;
and
» He/she has taken all the steps
that he/she ought to have taken
as a Director in order to make
himself/herself aware of any
relevant audit information and
to establish that the Company’s
statutory auditors are aware of
that information.
Directors’ compliance
statement
The Directors acknowledge that
they are responsible for securing
the Company’s compliance with its
relevant obligations.
The Directors confirm that:
(1) A compliance policy statement
setting out the Company’s
policies respecting compliance
by the Company with its
relevant obligations has been
drawn up;
(2) Appropriate arrangements or
structures that are designed
to secure material compliance
with the Company’s relevant
obligations have been put in
place; and
(3) A review of the arrangements
and structures, referred to at
2 above has been conducted
during the year ended 31
December 2020.
Audit, Risk and
Compliance Committee
In accordance with Section 167
of the Companies Act 2014, the
Group has established an Audit,
Risk and Compliance Committee.
Full particulars are provided in
98
the Audit, Risk and Compliance
Committee Report.
Corporate governance
Statements by the Directors
in relation to the Group’s and
Company’s application of corporate
governance principles and the
Group’s system of internal controls
are set out in the Corporate
Governance Report.
Going concern
The Group has adopted the going
concern basis in preparing its
financial statements after taking
account of the Group’s latest
forecasts, cash flows, liquidity, and
banking covenant requirements.
The Directors have made
appropriate enquiries and carried
out a thorough review of the
Group’s forecasts, projections
and available banking facilities,
taking account of possible changes
in trading performance and
considering business risk.
Uniphar plays a significant role in
the healthcare sector, ensuring
continuity in the supply and
distribution of much needed
medicines, medical devices and
related services.
The Group has a robust capital
structure with strong liquidity at the
end of December, strengthened
into the future by the new banking
facility agreed in July 2020. This
continues to provide a solid
platform for the Group to deal
with the disruption caused by the
Covid-19 pandemic.
A number of scenarios have been
considered and modelled relating
to the impact of Covid-19 on the
Group. The key assumptions within
each scenario include the following:
» Reduction in volumes in
Supply Chain & Retail, with no
significant reduction in costs;
» Reduction in elective surgeries
in Commercial & Clinical due to
re-prioritisation of resources in
hospitals, with an increase in
demand on easing of lockdown
measures; and
» No negative impact in Product
Access, due to the nature of
exclusive access programmes.
The scenarios considered are:
» Increased restrictions across
multiple geographies in place
to the end of Q1 2021, with
moderate recovery thereafter;
and
» Impact of continuing rolling
waves of lock down restrictions
through to Q1 2022 across
multiple geographies resulting
in a reduction in demand,
with a slow recovery over the
following period, and no further
mitigating actions taken to
offset loss of revenues.
In both of these scenarios the
assessment indicates that there is
no impact on the underlying ability
to comply with banking covenants
and retain sufficient liquidity to
meet our financial obligations as
they fall due.
The execution of a new five-year
banking facility (with the option
to extend by a further two years)
agreed in July 2020 enhances the
liquidity position of the Group.
The banking facility provides the
Group with a revolving credit
facility of €150.0m and a €90.0m
uncommitted accordion facility. This
new banking facility almost doubles
the Group’s available facilities.
The Group has a robust capital
structure, modest net bank debt
of €34.4m (31 December 2020), an
available unused committed facility
of €54.4m, in addition to a €90.0m
uncommitted accordion facility.
Having regard to the factors
noted above, the Directors have
a reasonable expectation that the
Group has adequate resources to
continue in operational existence
for the foreseeable future, being
a period of 12 months from
the date of approval of these
financial statements. As a result,
the Directors consider that it
is appropriate to continue to
adopt the going concern basis in
preparing the financial statements.
Uniphar plays a significant role in the
healthcare sector, ensuring continuity
in the supply and distribution of much
needed medicines, medical devices
and related services
Accounting records
The measures taken by the
Directors to secure compliance
with the Group's obligation to
keep adequate accounting
records are the use of appropriate
systems and procedures and
employment of competent
persons as outlined in Sections
281 to 285 of the Irish Companies
Act 2014. The accounting records
are kept at 4045 Kingswood Road,
Citywest Business Park, Co.
Dublin, D24 V06K.
Principal risks and
uncertainties
The principal risks and uncertainties
facing the Group and its
subsidiaries are outlined on pages
24 to 32.
Financial risk management
The Group’s operations expose
it to various financial risks. The
Group has a risk management
programme in place which seeks
to limit the impact of these risks
on the financial performance of the
Group and it is the policy of the
Group to manage these risks in a
non-speculative manner.
The Group’s financial risk
management is carried out by
a central finance department
under policies approved by the
Board. Group finance identifies,
evaluates and manages financial
risks in close co-operation with
the Group’s operating units. The
Board approves written principles
for overall risk management, as well
as policies covering specific areas,
such as foreign exchange risk,
interest rate risk, credit risk, use
of derivative financial instruments
and non-derivative financial
instruments, and the investment of
excess liquidity. The Group uses
financial instruments throughout
its business. Borrowings, cash and
liquid resources are used to finance
the Group’s operations. Trade
receivables and payables arise
directly from operations.
Forward foreign exchange
contracts are used to manage
currency risks arising from the
Group’s operations.
Finance interest and
currency risk
The Group’s procedure is to
finance operating subsidiaries
by a combination of retained
profits and, to a lesser extent,
non-recourse financing
arrangements, invoice discounting
and overdrafts, and to finance
investments with a combination of
Group funds and borrowings. The
majority of the Group’s activities
are conducted in Euro. Foreign
exchange exposure arises from
transactional currency exposures
arising from the sale and purchase
of goods in currencies other than
the Group’s functional currency
(i.e. Euro). The Group takes
appropriate measures to manage
its exposure to fluctuating foreign
exchange rates associated with
both transaction activity and
the translation into Euro of its
net investment in its non-Euro
subsidiaries. With UK subsidiaries
being key to our growth strategy,
the Board have been monitoring
the effect of the UK’s exit from the
EU. There has been no negative
impact on trade, and the decline
of Sterling during the second half
of 2020 resulted in a decrease
in the value of UK profits and
net assets when translated into
Euro. Forward foreign exchange
contracts and the holding of
foreign currency cash balances
are used to hedge these currency
exposures, where material.
99
Uniphar plc Annual Report 2020Governance
Directors' Report continued
Non-Financial Reporting Statement
In compliance with the European Union (Disclosure of Non-Financial and Diversity Information by Certain
Large Undertakings and groups) Regulations 2017, the table below outlines Uniphar's approach to these non-
financial matters:
Reporting requirements Our policies
Commentary
Environmental matters
» Sustainability Policy
Social and employee
matters
» Sustainability Policy
» Health & Safety Policy
» Whistleblowing Policy
Human rights
» Code of Business Conduct
» Equality & Dignity at Work Policy
» Modern Slavery Policy
For further information on the Group’s
approach to Environmental matters see
the Environment & Sustainability section
of our Sustainability and Governance
report on page 44.
For further information on the Group’s
approach to Social and Employee
matters see the People & Workplace
section and the Community Involvement
section of our Sustainability and
Governance report on pages 40 to 43.
The Group is committed to conducting
all our activities in accordance with
high standards of business conduct,
respecting the fundamental freedoms
and rights of our people. The Group
is also committed to ensuring that our
supply chain is free from human rights
abuses, including forced labour, slavery
and trafficking.
Anti-bribery and
corruption
» Anti-Bribery and Corruption Policy
» Code of Business Conduct
» Whistleblowing Policy
» Conflicts of Interest Policy
The Group does not tolerate any
form of bribery, prohibits facilitation
payments and does not make political
contributions.
Description of the
business model
Details are set out in the principal activities and review of the development of the
business section of this report.
Non-financial key
performance indicators
The Group’s planning and financial reporting procedures include financial and non-
financial Key Performance Indicators (KPIs) which benchmark progress towards
our strategic priorities. KPIs are reviewed and monitored on a regular basis by
the Board, the Audit, Risk and Compliance Committee or the applicable business
manager and are amended to better reflect the Group’s key performance measures
when required. Our KPIs in connection with the above matters relate to the level
of reported breaches of applicable legislation or incidents reported, of which there
were none in the current year.
In addition to the KPIs which are reviewed and monitored at a business level, the
Group have a number of KPIs which are used to monitor the Group’s performance.
These KPIs are outlined further in our key performance indicators section on pages
20 and 23.
Principal risks
Details are set out in the Risk Management section of this report on pages 24 to 32.
Substantial Holdings
The table below shows all notified shareholdings in excess of 3% of the issued ordinary share capital of the
Company as at 31 December 2020 and 26 February 2021, being the closest possible date to the date of signing
of this report:
26 February 2021
31 December 2020
Number of shares
% Holding Number of shares
% Holding
Mackenzie Investment
Polar Capital
Sisk Family
Gerard Rabbette1
17,374,939
16,711,156
16,152,373
8,758,310
6.4%
6.1%
5.9%
3.2%
17,374,939
16,711,156
19,652,373
8,758,310
6.4%
6.1%
7.2%
3.2%
1. Including Ordinary Shares issued under the 2018 LTIP
Directors, Secretary and their interests in shares
The names of the persons who, at any time in the twelve months to 31 December 2020, were Directors are set
out below.
M. Pratt
G. Rabbette
T. Dolphin
P. Dempsey
P. Hogan
M. McConn
G. Penny
P. Staunton
S. Webb
J. Berkowitz
Appointed to the Board on 18 September 2020
J. Holly
Retired from the Board on 26 May 2020
H. McSharry
Retired from the Board on 18 September 2020
M. Moran
Retired from the Board on 1 September 2020
The beneficial interests, including family interests, of the Directors and Company Secretary of Uniphar plc in office
at 31 December 2020 in the share capital of Uniphar plc and subsidiary undertakings were:
G. Rabbette
T. Dolphin
P. Dempsey
31 December 2020
ordinary shares
31 December 2019
ordinary shares
8,758,310
5,586,322
3,285,183
8,758,310
5,586,322
3,285,183
The Directors and Secretary who hold less than 1% of the Company's issued share capital are not disclosed as
the Company is exempt under Section 260, Companies Act 2014. For further details on Director’s share awards
under LTIP schemes, see the Remuneration Committee Report.
100
Uniphar plc Annual Report 2020
101
Governance
Directors' Report continued
The Board intends to adopt a
progressive dividend policy to
reflect the expectation of future
cash flow generation and the
long-term earnings potential of
the Group
Political donations
The Electoral Act, 1997, (As
amended by the Electoral Political
Funding Act 2012) requires
companies to disclose all political
donations to any individual party
over €200 in value made during
the financial year. The Directors, on
enquiry, have satisfied themselves
that no such donations in excess of
this amount have been made by the
Group or any of its subsidiaries.
Events after the Balance
Sheet Date
On 26 January 2021, the Board
approved the establishment of a
new share option scheme with
a reserve of 2.5% of the issued
share capital of the Company.
Existing participants in the
current Group LTIP (including
executive directors) shall not be
eligible for the grant of options
under this scheme which is
intended to incentivise key senior
management who were not eligible
for participation in the existing
Group LTIP.
Dividends
Following another set of positive
results for the Group, the Directors
are proposing a final dividend of
€4.2m. Subject to approval at the
AGM, the proposed dividend will
be paid to ordinary shareholders
on the Company’s register on 23
April 2021.
The Board intends to adopt a
progressive dividend policy to
reflect the expectation of future
cash flow generation and the
long-term earnings potential of
the Group.
Auditors
The independent auditors,
PricewaterhouseCoopers, have
indicated their willingness to
continue in office.
On behalf of the Board
M. Pratt
G. Rabbette
Financial
Statements
Independent auditors’ report
Group Income Statement
Group Statement of Comprehensive Income
Group Balance Sheet
Company Balance Sheet
Group Cash Flow Statement
Company Cash Flow Statement
Group Statement of Changes in Equity
Company Statement of Changes in Equity
Accounting Policies
Notes to the Financial Statements
Alternative Performance Measures
Glossary of Terms
104
111
112
113
114
115
116
117
118
119
132
189
194
102
Uniphar plc Annual Report 2020
Financial Statements
103
103
Independent auditors’ report to the members
of Uniphar plc
Independent auditors’ report to the members
of Uniphar plc continued
Report on the audit of the financial statements
Opinion
In our opinion, Uniphar plc’s group financial statements and company financial statements (the “financial statements”):
» give a true and fair view of the group’s and the company’s assets, liabilities and financial position as at 31 December
2020 and of the group’s profit and the group’s and the company’s cash flows for the year then ended;
» have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted
by the European Union and, as regards the company’s financial statements, as applied in accordance with the
provisions of the Companies Act 2014; and
» have been properly prepared in accordance with the requirements of the Companies Act 2014.
We have audited the financial statements, included within the Annual Report, which comprise:
»
»
»
»
»
»
»
the Group and Company Balance Sheets as at 31 December 2020;
the Group Income Statement for the year then ended;
the Group Statement of Comprehensive Income for the year then ended;
the Group and Company Cash Flow Statements for the year then ended;
the Group and Company Statements of Changes in Equity for the year then ended;
the accounting policies; and
the notes to the financial statements.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”) and
applicable law. Our responsibilities under ISAs (Ireland) are further described in the Auditors’ responsibilities for the
audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in Ireland, which includes IAASA’s Ethical Standard as applicable to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Materiality
Audit
scope
Key audit
matters
Materiality
» €1.9 million (2019: €1.6 million) - Group financial statements.
» Based on c. 5% of profit before tax, before exceptional items.
» €2.6 million (2019: €2.3 million) - Company financial statements.
» Based on c. 1% of net assets - Company financial statements. For group
audit purposes a materiality level that is lower than the group financial
statements materiality was applied to balances that did not eliminate in the
group financial statements.
Audit scope
» Our audit work addressed each of the Group’s three operating segments:
Commercial & Clinical Services, Product Access Services and Supply
Chain & Retail Services. Each of these consists of a number of
reporting components.
» We performed full scope audits of the complete financial information of six
financially significant reporting components: Uniphar plc, Allphar Services
Limited, Uniphar Wholesale Limited, Sisk Healthcare UK Limited, Sisk
Healthcare Unlimited Company and Durbin plc.
» Specified audit procedures on selected account balances, classes of
transactions or disclosures were performed at eleven other reporting
components within the Group.
» Audit coverage for individual line items within the Group’s Income
Statement and Balance Sheet is in excess of 80% of revenues, in excess of
70% of Profit before tax, before Exceptional items and in excess of 80% of
Total Assets.
Key audit matters
» Goodwill impairment assessment.
» Accounting for material acquisitions.
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect
of significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due
to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
This is not a complete list of all risks identified by our audit.
104
105
Financial StatementsUniphar plc Annual Report 2020 Independent auditors’ report to the members
of Uniphar plc continued
Independent auditors’ report to the members
of Uniphar plc continued
Key audit matter
How our audit addressed the key audit matter
Key audit matter
How our audit addressed the key audit matter
Goodwill impairment assessment
Refer to “Intangible assets” and “Impairment of assets”
on page 121 and 122 (Accounting Policies), “Impairment
assessment of goodwill and other non-current assets” in
note 1 (“Significant estimates and judgements”) and note
10 (“Intangible Assets”).
The carrying value of goodwill at 31 December 2020 is
c. €358m, representing approximately 42% of the Group’s
total assets.
The carrying amount of goodwill attributed to each Cash
Generating Unit (“CGU”) is tested for impairment annually,
or more frequently if events or changes in circumstances
indicate that it might be impaired.
For those acquisitions made in late 2020, where allocation
of the goodwill arising on acquisition to a cash generating
unit has not taken place at 31 December 2020, the
goodwill carrying amount is assessed with reference to
the recent market transaction.
We determined this to be a key audit matter due to
the level of judgement required by management in
determining the recoverable amount of goodwill, and the
assumptions used in the calculation of its value-in-use.
Key assumptions used to develop the estimation of value-
in-use at 31 December 2020 include the growth rates for
revenue, the cash flow forecasts and the discount rate.
We considered management’s impairment model
for each CGU and evaluated the methodology used.
We also tested the mathematical accuracy of the
impairment models.
We agreed the cash flow forecasts for 2021 to 2025 to
Board approved plans.
We assessed the reasonableness of estimates of future
revenue from product sales and costs included in the
cash flow forecasts by comparing relevant assumptions
to historical performance and economic forecasts, as
appropriate. We challenged management’s long-
term growth rates and long-term inflation rates with
reference to OECD published economic forecasts data.
We evaluated the discount rate used by management,
with the assistance of PwC valuation experts, through
comparison to industry peers.
We also performed a sensitivity analysis using
alternative reasonably possible assumptions for
estimating the value-in-use.
We found that the assumptions used in the assessment
of goodwill fell within a reasonable range.
We also assessed the appropriateness of the
disclosures in note 10 regarding the impairment
assessment of goodwill.
Accounting for material acquisitions
Refer to “Business combinations” on page 125
(Accounting Policies), “Business combinations” and
“Provisions” under note 1 (“Significant estimates
and judgements”), note 19 (“Provisions”) and note
35 (“Acquisitions of subsidiary undertakings and
business assets”).
During 2020 the Group completed six acquisitions.
Management determined that all acquisitions met
the definition of a business combination under
IFRS 3 ‘Business Combinations’. For certain of the
acquisitions the total consideration includes an estimate
for consideration that is contingent on future trading
performance. As set out in note 10, goodwill of €90.8m
was recognised in the year.
We read the legal agreements for each acquisition to
obtain an understanding of the structure and key terms
of each transaction.
We challenged the reasonableness of the significant
assumptions used in the measurement of the fair
value of the consideration including the valuation
of deferred and contingent consideration pertaining
to the acquisitions. This included considering
management’s assessment of the likelihood of the
specified future profitability targets being achieved,
including considering the growth rates used against
OECD published economic forecasts for the region
in which each acquired entity operates and other
relevant factors.
We determined the accounting for acquisitions to be a key
audit matter due to:
We also assessed, with the assistance of a PwC
valuations expert, the discount rate applied.
»
»
their significance to the financial statements; and
the complexity and degree of judgement involved in
determining the fair value of the consideration payable,
particularly the deferred and contingent element
that are based on achievement of specified future
profitability targets.
We found that the assumptions used fell within a
reasonable range.
For the valuation applied to the brand name in the
Hickey’s Pharmacy Group acquisition of €11.2m, we
evaluated the third party valuation report on which
the valuation is based, with the assistance of PwC
valuation experts.
We obtained from management details of the allocation
of fair values in relation to assets and liabilities
acquired. We evaluated and tested the fair values by
reference to supporting documentation.
We also assessed the appropriateness of the
disclosures in the financial statements regarding the
acquisitions made during 2020.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls,
and the industry in which the Group operates.
The Group is structured along three operating segments being Commercial & Clinical, Product Access and Supply
Chain & Retail. Each operating segment comprises a number of reporting components. The Group financial statements
are a consolidation of 43 reporting components across the three operating segments. In establishing the overall
approach to the Group audit, we identified six reporting components, which in our view required an audit of their
complete financial information due to their size and financial significance or risk factors to the Group.
This together with the work we performed at Group gave us the comfort we required in respect of our audit of the
financial statements.
106
107
Financial StatementsUniphar plc Annual Report 2020 Independent auditors’ report to the members
of Uniphar plc continued
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Company financial statements
Overall materiality
€1.9 million (2019: €1.6 million).
€2.6 million (2019: €2.3 million).
How we
determined it
c. 5% of profit before tax, before
exceptional items.
Rationale for
benchmark applied
The Group is profit-oriented and profit
before tax, before exceptional items
is one of the key metrics used by
shareholders in reviewing performance
of the Group. We consider this to be the
most appropriate relevant performance
metric for the shareholders of the Group.
c. 1% of net assets. For group audit
purposes a materiality level that is lower
than the group financial statements
materiality was applied to balances
that did not eliminate in the group
financial statements.
We consider net assets to be the
appropriate benchmark given the
company is a holding company with its
main activity being the management of
investments in subsidiaries.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
€0.1 million (group audit) (2019: €0.08 million) and €0.1 million (company audit) (2019: €0.08 million) as well as
misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group and company’s ability to continue to adopt the going concern
basis of accounting included the procedures set out below:
» We evaluated management’s base case and downside scenarios prepared for the going concern assessment, as
outlined in the accounting policies on page 119. We agreed the base case to the approved budgets for 2021. We
checked the mathematical accuracy and estimated headroom of each of the scenarios. We also considered the
sufficiency of the downside scenarios considered by management.
» We considered whether the assumptions within the base case scenario were consistent with the assumptions made
in other areas of our audit work e.g. goodwill impairment assessment.
» We agreed the banking facilities to the relevant loan documentation and checked the calculations to support the
expected covenant compliance under each of the scenarios for mathematical accuracy and agreement with the
terms of the facilities.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group’s or the company’s ability to continue as a going
concern for a period of at least twelve months from the date on which the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
group’s or the company’s ability to continue as a going concern.
Independent auditors’ report to the members
of Uniphar plc continued
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
of the financial statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Directors’ Report, we also considered whether the disclosures required by the Companies Act 2014
(excluding the information included in the “Non Financial Statement” as defined by that Act on which we are not required
to report) have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (Ireland) and
the Companies Act 2014 require us to also report certain opinions and matters as described below:
»
In our opinion, based on the work undertaken in the course of the audit, the information given in the Directors’ Report
(excluding the information included in the “Non Financial Statement” on which we are not required to report) for the
year ended 31 December 2020 is consistent with the financial statements and has been prepared in accordance with
the applicable legal requirements.
» Based on our knowledge and understanding of the group and company and their environment obtained in the course
of the audit, we have not identified any material misstatements in the Directors’ Report (excluding the information
included in the “Non Financial Statement” on which we are not required to report).
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation
of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view.
The directors are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
108
109
Financial StatementsUniphar plc Annual Report 2020 Independent auditors’ report to the members
of Uniphar plc continued
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the IAASA website at:
https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f- a98202dc9c3a/Description_of_auditors_responsibilities_for_
audit.pdf
This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2014 opinions on other matters
» We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
»
In our opinion the accounting records of the company were sufficient to permit the company financial statements to
be readily and properly audited.
» The Company Balance Sheet is in agreement with the accounting records.
Other exception reporting
Directors’ remuneration and transactions
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’
remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions
to report arising from this responsibility.
Prior financial year Non Financial Statement
We are required to report if the company has not provided the information required by Regulation 5(2) to 5(7) of the
European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups)
Regulations 2017 in respect of the prior financial year. We have nothing to report arising from this responsibility.
Damian Byrne
for and on behalf of PricewaterhouseCoopers
Chartered Accountants and Statutory Audit Firm
Dublin
1 March 2021
» The maintenance and integrity of the Uniphar plc website is the responsibility of the directors; the work carried out by
the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for
any changes that may have occurred to the financial statements since they were initially presented on the website.
» Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
110
Group Income Statement
Year Ended 31 December 2020
2020
Pre-
exceptional
€’000
2020
Exceptional
(note 4)
€’000
Notes
2020
Total
€’000
2019
Pre-
exceptional
€’000
2019
Exceptional
(note 4)
€’000
2019
Total
€’000
Revenue
Cost of sales
Gross profit
Selling and distribution costs
Administrative expenses
Other operating income
Operating profit
Finance cost
Profit before tax
Income tax expense
2
3
6
7
1,823,854
(1,606,602)
217,252
(55,446)
(115,328)
241
-
-
1,823,854
(1,606,602)
1,665,283
(1,484,681)
-
-
1,665,283
(1,484,681)
-
-
(6,775)
-
217,252
(55,446)
(122,103)
241
180,602
(52,214)
(88,410)
272
-
-
(12,043)
-
180,602
(52,214)
(100,453)
272
46,719
(6,775)
39,944
40,250
(12,043)
28,207
(8,352)
1,939
(6,413)
(8,480)
6,731
(1,749)
38,367
(5,720)
(4,836)
-
33,531
(5,720)
31,770
(5,537)
(5,312)
-
26,458
(5,537)
Profit for the financial year
32,647
(4,836)
27,811
26,233
(5,312)
20,921
Attributable to:
Owners of the parent
Non-controlling interests
27
Profit for the financial year
Attributable to:
Continuing operations
Profit for the financial year
Earnings per ordinary share (in cent):
Continuing operations
Basic and diluted earnings
per share (in cent)
8
27,827
(16)
27,811
27,811
27,811
10.6
10.6
21,026
(105)
20,921
20,921
20,921
11.5
11.5
111
Financial StatementsUniphar plc Annual Report 2020 Group Statement of Comprehensive Income
Year Ended 31 December 2020
Group Balance Sheet
As at 31 December 2020
Notes
2020
€’000
2019
€’000
Notes
2020
€’000
2019
€’000
Profit for the financial year
27,811
20,921
Other comprehensive (expense)/income
Items that may be reclassified to the Income Statement:
Unrealised foreign currency translation adjustments
Items that will not be reclassified to the Income Statement:
Actuarial gain/(loss) in respect of defined benefit pension schemes
Deferred tax (charge)/credit on defined benefit pension schemes
Total comprehensive income for the financial year
Attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income for the financial year
Attributable to:
Continuing operations
Total comprehensive income for the financial year
20
13
27
(4,564)
3,815
303
(38)
(1,207)
151
23,512
23,680
23,528
(16)
23,785
(105)
23,512
23,680
23,512
23,680
23,512
23,680
112
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Financial assets - Investments in equity instruments
Deferred tax asset
Other receivables
Employee benefit surplus
Total non-current assets
Current assets
Assets held for sale
Inventory
Trade and other receivables
Cash and cash equivalents
Restricted cash
Total current assets
Total assets
EQUITY
Capital and reserves
Called up share capital presented as equity
Share premium
Other reserves
Retained earnings
Attributable to owners
Attributable to non-controlling interests
Total equity
LIABILITIES
Non-current liabilities
Borrowings
Provisions
Employee benefit obligation
Lease obligations
Other non-current payables
Total non-current liabilities
Current liabilities
Borrowings
Lease obligations
Trade and other payables
Facility termination fee
Total current liabilities
Total liabilities
Total equity and liabilities
On behalf of the Board
M. Pratt
G. Rabbette
10
11
12
13
16
20
14
15
16
17
17
23
24
25
26
27
18
19
20
21
22
18
21
22
32
374,498
153,730
25
4,524
1,097
12
277,776
119,483
25
4,676
1,132
-
533,886
403,092
2,300
115,566
125,196
60,410
3,097
7,985
97,684
136,408
114,040
2,142
306,569
358,259
840,455
761,351
21,841
176,501
(1,100)
5,218
202,460
75
21,841
176,501
3,464
(20,601)
181,205
(285)
202,535
180,920
95,615
81,737
-
107,203
4,604
66,977
81,069
45
82,901
545
289,159
231,537
2,311
13,334
333,116
-
348,761
637,920
840,455
22,583
10,083
311,228
5,000
348,894
580,431
761,351
113
Financial StatementsUniphar plc Annual Report 2020
Company Balance Sheet
As at 31 December 2020
Group Cash Flow Statement
Year Ended 31 December 2020
ASSETS
Non-current assets
Property, plant and equipment
Financial assets - Investments in subsidiaries
Financial assets - Investments in equity instruments
Deferred tax asset
Other receivables
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Restricted cash
Total current assets
Total assets
EQUITY
Capital and reserves
Called up share capital presented as equity
Share premium
Other reserves
Retained earnings
Total equity
LIABILITIES
Non-current liabilities
Borrowings
Provisions
Lease obligations
Total non-current liabilities
Current liabilities
Borrowings
Lease obligations
Trade and other payables
Facility termination fee
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2020
€’000
2019
€’000
11
12
12
13
16
16
17
17
23
24
25
26
18
19
21
18
21
22
32
44,355
291,407
25
2,232
412
47,335
288,732
25
2,724
138
338,431
338,954
367,194
3,234
2,100
435,543
67,328
2,142
372,528
505,013
710,959
843,967
21,841
176,501
60
60,766
21,841
176,501
60
28,331
259,168
226,733
95,336
32,440
42,443
65,796
56,385
44,633
170,219
166,814
-
3,377
278,195
-
16,827
3,311
425,282
5,000
281,572
450,420
451,791
617,234
710,959
843,967
The profit recorded in the financial statements of the Company for the year ended 31 December 2020 was €34,428,000
(2019: €42,933,000). As permitted by Section 304 of the Companies Act 2014, the Income Statement of the Company
has not been separately presented in the financial statements.
On behalf of the Board
M. Pratt
G. Rabbette
Operating activities
Cash inflow from operating activities
Proceeds from non-recourse financing
Interest paid
Interest paid on lease liabilities
Corporation tax payments
Net cash inflow from operating activities
Investing activities
Payments to acquire property, plant and equipment – Maintenance
Payments to acquire property, plant and equipment – Strategic projects
Receipts from disposal of property, plant and equipment
Payments to acquire intangible assets – Maintenance
Payments to acquire intangible assets – Strategic projects
Receipts from disposal of assets held for sale
Receipts from disposals/repayments of financial assets
Payments to acquire subsidiary undertakings
Cash acquired on acquisition of subsidiary undertakings
Restricted cash acquired on acquisition of subsidiary undertakings
Debt acquired on acquisition of subsidiary undertakings
Payment of deferred and deferred contingent consideration
Receipt of deferred consideration receivable
Notes
2020
€’000
2019
€’000
29
32
21
14
12
35
35
35
66,371
12,000
(2,870)
(2,988)
(6,535)
49,566
68,000
(3,831)
(2,637)
(4,101)
65,978
106,997
(6,487)
(7,832)
123
(1,412)
(6)
5,685
-
(57,363)
7,689
1,027
(16,800)
(35,305)
355
(5,585)
-
9
(861)
-
415
5,359
(50,533)
6,860
-
-
(1,403)
95
Net cash outflow from investing activities
(110,326)
(45,644)
Financing activities
Issue of partly paid share capital
Proceeds from calling of unpaid element of partly paid share capital
Proceeds from IPO equity issue
IPO cash exceptional costs
IPO cash exceptional costs - recognised directly in equity
Proceeds from borrowings
Repayments of borrowings
Decrease in invoice discounting facilities
Movement in restricted cash
Payment of dividends
Payment of facility termination fee
Principal element of lease payments
Net cash (outflow)/inflow from financing activities
(Decrease)/Increase in cash and cash equivalents in the year
Foreign currency translation on cash and cash equivalents
Opening balance cash and cash equivalents
Closing balance cash and cash equivalents
-
-
-
-
-
113,799
(103,928)
(1,505)
(955)
(1,993)
(5,000)
(9,133)
17
1,211
139,391
(3,493)
(8,581)
-
(6,869)
(69,342)
210
-
(2,500)
(7,896)
(8,715)
42,148
(53,063)
(567)
114,040
103,501
-
10,539
60,410
114,040
9
32
30
17
17
114
115
Financial StatementsUniphar plc Annual Report 2020
Company Cash Flow Statement
Year Ended 31 December 2020
Operating activities
Cash outflow from operating activities
Interest paid
Interest paid on lease liabilities
Net cash outflow from operating activities
Investing activities
Receipts from disposals/repayments of financial assets
Payments to acquire subsidiary undertakings
Payments of deferred and deferred contingent consideration
Receipt of deferred consideration receivable
Net cash outflow from investing activities
Financing activities
Issue of partly paid share capital
Proceeds from calling of unpaid element of partly paid share capital
Proceeds from IPO equity issue
IPO cash exceptional costs
IPO cash exceptional costs - recognised directly in equity
Proceeds from borrowings
Repayments of borrowings
Movement in restricted cash
Payment of dividends
Payment of facility termination fee
Principal element of lease payments
Net cash inflow from financing activities
(Decrease)/Increase in cash and cash equivalents in the year
Opening balance cash and cash equivalents
Closing balance cash and cash equivalents
Notes
2020
€’000
2019
€’000
29
21
(34,328)
(1,260)
(1,398)
(31,901)
(2,466)
(1,467)
(36,986)
(35,834)
-
(990)
(29,460)
-
5,359
(26,802)
-
95
(30,450)
(21,348)
-
-
-
-
-
96,997
(84,284)
42
(1,993)
(5,000)
(2,420)
17
1,211
139,391
(3,493)
(8,581)
-
(6,217)
-
-
(2,500)
(2,651)
3,342
117,177
(64,094)
67,328
59,995
7,333
3,234
67,328
30
9
32
31
17
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Accounting Policies
Basis of preparation
The consolidated financial statements of Uniphar plc and its subsidiaries (the ‘Group’) have been prepared in
accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS
Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS, as adopted by the EU. The financial
statements comply with IFRS as issued by the International Accounting Standards Board (IASB), as adopted by the EU
and as applied in accordance with the Companies Acts 2014.
Uniphar plc is incorporated in the Republic of Ireland under registration number 224324 with a registered office at 4045
Kingswood Road, Citywest Business Park, Co. Dublin, D24 V06K.
The parent Company’s financial statements are prepared using accounting policies which are consistent with the
accounting policies applied to the consolidated financial statements by the Group. The accounting policies are set out
below and they have also been applied consistently by all of the Group’s subsidiaries and joint ventures to all years
presented in these financial statements.
Going concern
The Directors have made appropriate enquiries and carried out a thorough review of the Group’s forecasts, projections
and available banking facilities, taking account of possible changes in trading performance and considering
business risk.
Uniphar plays a significant role in the healthcare sector, ensuring continuity in the supply and distribution of much
needed medicines, medical devices and related services.
The Group has a robust capital structure with strong liquidity at the end of December 2020, strengthened into the future
by the new banking facility agreed in July 2020. This continues to provide a solid platform for the Group to deal with the
disruption caused by the Covid-19 pandemic.
A number of scenarios have been considered and modelled relating to the impact of Covid-19 on the Group. The key
assumptions within each scenario include the following:
» Reduction in volumes in Supply Chain & Retail, with no significant reduction in costs;
» Reduction in elective surgeries in Commercial & Clinical due to re-prioritisation of resources in hospitals, with
increase in demand on easing of lockdown measures; and
» No negative impact in Product Access, due to the nature of exclusive access programmes.
The scenarios considered are:
Increased restrictions across multiple geographies in place to the end of Q1 2021, with moderate recovery thereafter; and
»
» The impact of continuing rolling waves of lockdown restrictions through to Q1 2022 across multiple geographies
resulting in a reduction in demand, with a slow recovery over the following period, and no further mitigating actions
taken to offset loss of revenues.
In both of these scenarios the assessment indicates that there is no impact on the underlying ability to comply with
banking covenants and retain sufficient liquidity to meet our financial obligations as they fall due.
The execution of a new five-year banking facility (with the option to extend by a further two years) agreed in July 2020
enhances the liquidity position of the Group. The banking facility provides the Group with a revolving credit facility of
€150.0m and a €90.0m uncommitted accordion facility. This new banking facility almost doubles the Group’s available
facilities. The Group has a robust capital structure, modest net bank debt of €34.4m (31 December 2020) and an
available unused committed facility of €54.4m, in addition to a €90.0m uncommitted accordion facility.
Having regard to the factors noted above, the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future, being a period of 12 months from the date of
approval of these financial statements. As a result, the Directors consider that it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
119
Financial StatementsUniphar plc Annual Report 2020
Accounting Policies continued
Accounting Policies continued
Basis of consolidation
The Group’s financial statements are prepared for the year ended 31 December 2020. The annual financial statements
incorporate the Company and all of its subsidiary undertakings. A subsidiary undertaking is consolidated by reference
to whether the Group has control over the subsidiary undertaking. The Group controls an entity 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 to direct the activities of the entity.
The results of all Group undertakings are prepared to the Group’s financial year end. The principal subsidiaries of the
Group are listed in note 37. The attributable results of acquisitions are included in the financial statements from the date
of acquisition. The results of the subsidiary undertakings disposed of are included in the consolidated Income Statement
and Cash Flow Statement up to the date control ceases. Intergroup transactions are eliminated on consolidation in the
preparation of the Group’s financial statements.
New Standards, Amendments and Interpretations
The Group has applied the following standards and amendments for the first time for their annual reporting period
commencing 1 January 2020:
» Definition of Material – amendments to IAS 1 and IAS 8;
» Definition of a Business – amendments to IFRS 3;
» Revised Conceptual Framework for Financial Reporting; and
»
Interest Rate Benchmark Reform – amendments to IFRS 9, IAS 39 and IFRS 7.
These amendments listed above did not have any impact on the amounts recognised in prior periods and are not
expected to significantly affect the current or future periods.
New standards and interpretations not yet adopted
The following accounting standard and interpretation has been published but is not mandatory for 31 December 2020
and has not been early adopted by the Group:
»
‘Leases’ – Covid 19 related rent concessions – amendment to IFRS16
This standard is not expected to have a material impact in the current or future reporting periods and on foreseeable
future transactions.
Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
»
Investments in equity, financial assets and liabilities, certain classes of property, plant and equipment –
measured at fair value; and
» Defined benefit pension plans – plan assets measured at fair value.
The preparation of financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates. The areas involving a high degree of judgement or complexity, or
areas where assumptions and estimates are significant in relation to the consolidated financial statements are set out
in note 1.
Foreign currency translation
(i) Functional currency and presentational 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 functional currency of the
parent company is Euro. The consolidated financial statements and parent company financial statements are presented
in Euro.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognised in the Income Statement. They are deferred in equity if they relate to qualifying cash flow hedges
and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the Income Statement. All other foreign
exchange gains and losses are presented in the Income Statement on a net basis within administrative expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities
such as equities held at fair value through the Income Statement are recognised in the Income Statement as part of the
fair value gain or loss and translation differences on non-monetary assets such as equities classified as investments in
equity instruments are recognised in Other Comprehensive Income (OCI).
(iii) Foreign currency translation
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in OCI. When
a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange
differences are reclassified to the Income Statement, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities
of the foreign operation and translated at the closing rate.
Intangible assets
(i) Goodwill
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised, but it is tested for
impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and
is carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units for the purpose
of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that
are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are
identified at the lowest level at which goodwill is monitored for internal management purposes.
(ii) Computer software
Computer software, including computer software which is not an integrated part of an item of computer hardware, is
stated at cost less any accumulated amortisation and any accumulated impairment losses. Cost comprises purchase
price and any other directly attributable costs.
120
121
Financial StatementsUniphar plc Annual Report 2020 Accounting Policies continued
Accounting Policies continued
Intangible assets continued
(ii) Computer software continued
Computer software is recognised if it meets the following criteria:
» an asset can be separately identified;
»
»
»
»
it is probable that the asset created will generate future economic benefits;
the development cost of the asset can be measured reliably;
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and
the cost of the asset can be measured reliably.
Costs relating to the development of computer software for internal use are capitalised once the recognition criteria
outlined above are met. Computer software is amortised over its expected useful life of five years, by charging equal
instalments to the Income Statement from the date the assets are ready for use.
(iii) Trademarks
Trademarks are shown at historical cost. Trademarks have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks over their
estimated useful lives of five years.
(iv) Intangible Assets - Acquired
Intangible assets that are acquired by the Group in a business combination are stated at cost less accumulated
amortisation and impairment losses, when separable or arising from contractual or other legal rights and when they can
be measured reliably.
Intangible assets are amortised on a straight-line basis. The Brand name is amortised over its expected useful life of 10
years and the Technology asset is amortised over its expected useful life of three years.
Amortisation periods, useful lives, expected patterns of consumption and residual values are reviewed at each financial
year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
are embodied in the asset are accounted for by changing the amortisation period or method as appropriate on a
prospective basis.
Impairment of assets
Goodwill has an indefinite useful life, is not subject to amortisation and is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired. Other assets are tested for
impairment whenever events or changes in 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 an 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 separately identifiable
cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating
units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
Property, plant and equipment
Property, plant and equipment are stated at cost or deemed cost as appropriate less accumulated depreciation.
Freehold property in Ireland was revalued to fair value and is measured on the basis of deemed cost being the revalued
amount at the date of that revaluation less accumulated depreciation.
Depreciation is calculated in order to write off the cost of property, plant and equipment, other than land and assets
under construction, over their estimated useful lives by equal annual instalments.
Property, plant and equipment continued
The estimated useful lives of property, plant and equipment by reference to which depreciation has been calculated are
as follows:
Freehold buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computer equipment
Motor vehicles
Instruments
50 years
10 years
3 - 10 years
10 years
3 - 5 years
5 years
3 years
Land is not being depreciated.
Property, plant and equipment recognised as a right-of-use asset in accordance with IFRS 16 is depreciated over the
right-of-use asset’s useful life on a straight-line basis.
Assets Held for Sale
Non-current assets that are expected to be recovered principally through sale rather than continuing use and meet the
IFRS 5 criteria are classified as held for sale. These assets are shown in the Balance Sheet at the lower of their carrying
amount and fair value less any costs to sell. Impairment losses on initial classification as non-current assets held for
sale and subsequent gains or losses on re-measurement are recognised in the Income Statement.
Financial assets – Investments in subsidiaries
Investments in subsidiaries are stated at cost less any accumulated impairment and are reviewed for impairment if there
are indications that the carrying amount may not be recoverable. They are assessed for impairment annually as part of
the Group’s overall impairment assessment.
Investments and other financial assets
(i) Classification
The Group classifies its financial assets in the following measurement categories:
»
»
those to be measured subsequently at fair value (either through OCI or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
(ii) Recognition and derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the Group has transferred substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through the Income Statement, transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair value through the Income Statement are expensed in the
Income Statement.
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Financial StatementsUniphar plc Annual Report 2020 Accounting Policies continued
Accounting Policies continued
Investments and other financial assets continued
(iii) Measurement continued
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 three measurement categories into which the Group classifies its
debt instruments:
» Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets
is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in the Income Statement and presented in other gains/(losses) together with foreign exchange
gains and losses. Impairment losses are presented as separate line item in the Income Statement;
» Fair value through Other Comprehensive Income (FVOCI): Assets that are held for collection of contractual cash
flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal
and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are
recognised in the Group Income Statement. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to the Group Income Statement; and
» Fair value through profit or loss (FVPL): Assets that do not meet the criteria for amortised cost or FVOCI are
measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in the
Group Income Statement in the period in which it arises.
Loans and receivables
Loans and receivables are subsequently carried at amortised cost using the effective interest method.
Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is
initially measured at fair value and subsequently at the higher of:
»
»
the amount determined in accordance with the expected credit loss model under IFRS 9 Financial Instruments; and
the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance
with the principles of IFRS 15 Revenue from Contracts with Customers.
The fair value of financial guarantees is determined based on the present value of the difference in cash flows between
the contractual payments required under the debt instrument and the payments that would be required without the
guarantee, or the estimated amount that would be payable to a third party for assuming the obligations. Where
guarantees in relation to loans or other payables of associates are provided for no compensation, the fair values are
accounted for as contributions and recognised as part of the cost of the investment.
Derivatives and facility termination fees
Derivatives and facility termination fees are initially recognised at fair value on the date a contract is entered into and
are subsequently remeasured to their fair value at the end of each reporting period through the Income Statement.
Equity instruments
Investments in equity instruments are subsequently carried at fair value through OCI. Gains or losses arising from
changes, due to both translation differences and other changes, in the fair value are recognised in OCI.
Details on how the fair value of financial instruments is determined are disclosed in note 32.
(iv) Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried
at amortised cost and FVOCI. 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.
Investments and other financial assets continued
(v) Income recognition
Interest income
Interest income is recognised in the Income Statement as it accrues using the effective interest method.
Dividends
Dividends are recognised as revenue when the right to receive payment is established. This applies even if they are
paid out of pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence.
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group. Under the acquisition method, the assets, liabilities and contingent liabilities of
an acquired business are initially recognised at their fair value at the date of acquisition.
The Group measures goodwill at the acquisition date as:
» The fair value of the consideration transferred; plus
» The recognised amount of any non-controlling interests in the acquiree; plus
»
If the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree;
less
» The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in the Income Statement.
The cost of a business combination is measured as the aggregate of the fair values of any assets transferred, liabilities
incurred or assumed, and equity instruments issued in exchange for control. The consideration transferred does not
include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the
Income Statement.
The fair value attributable to any non-controlling interest arising on an acquisition is calculated based on the
non-controlling interest share of the identifiable net assets at the date of acquisition.
Where a business combination agreement provides for an adjustment to the cost of the combination, which is
contingent on future events, the deferred contingent consideration payable is measured at fair value at the acquisition
date. If the deferred contingent consideration is classified as equity, then it is not remeasured, and settlement is
accounted for within equity. Otherwise, subsequent changes in the fair value of the deferred contingent consideration
are recognised in the Income Statement.
When share-based payment awards (replacement awards) are required to be exchanged for awards held by the
acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the
acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This
determination is based on the market-based value of the replacement awards compared with the market-based value of
the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.
When the initial accounting for a business combination is determined provisionally, any adjustments to the provisional
values allocated to the identifiable assets and liabilities are made within twelve months of the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities that the Group incurs in
connection with completed business combinations are expensed as incurred.
124
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Financial StatementsUniphar plc Annual Report 2020 Accounting Policies continued
Accounting Policies continued
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount
is recognised in the Income Statement over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent
there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in the Income Statement as other income or finance costs.
Leases continued
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined; or the
Group’s incremental borrowing rate which is calculated using a portfolio approach, based on the nature of the lease.
The discount rate per lease asset class is:
» Buildings
3%
» Plant and equipment 4%
» Motor Vehicles
5%
The Group applied the following practical expedients when applying IFRS 16 to leases previously classified
as operating leases under IAS 17:
» Excluded initial direct costs from measuring the right-of-use asset at the date of initial application; and
» Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Right-of-use assets are measured at cost comprising the following:
Cash and cash equivalents
For the purpose of presentation in the Cash Flow Statement, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the
Balance Sheet.
Share capital
Ordinary shares are classified as equity. Proceeds from the issue of ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are recognised directly in retained earnings
within equity, net of any tax effects.
Leases
The Group leases various properties, equipment and motor vehicles. Rental contracts are typically made for fixed
periods of 1 to 30 years but may have extension options as described below. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any
covenants, but leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to the Income Statement over the lease period to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is depreciated over the right-of-use assets
useful life on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
» fixed payments (including in-substance fixed payments), less any lease incentives receivable;
» variable lease payments that are based on an index or a rate;
» amounts expected to be payable by the lessee under residual value guarantees;
»
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
» payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
the amount of the initial measurement of lease liability;
»
» any lease payments made at or before the commencement date less any lease incentives received;
» any initial direct costs, and
»
restoration costs.
Extension and termination options are included in a number of property and equipment leases across the Group.
These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and
termination options held are exercisable only by the Group and not by the respective lessor.
Payments associated with leases of low-value assets are recognised on a straight-line basis as an expense in the
Income Statement.
Low-value assets comprise of computer equipment, small items of office furniture, and in-store equipment in our
retail pharmacies.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Provision is made using the expected credit loss model which uses a
lifetime expected loss allowance for all trade receivables.
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost is based on the moving average cost method
(and first in first out principle where appropriate). Moving average is a costing method used under a perpetual inventory
system whereby, after each purchase, average unit cost is recomputed by adding the cost of purchased units to the cost
of units in inventory and dividing by the new total number of units. The first in, first out principle includes all expenditure
which has been incurred in the normal course of business in bringing the products to their present location and
condition. Net realisable value comprises selling price net of trade but before settlement discounts, less all costs to be
incurred in marketing, selling and distribution.
Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and unused tax losses.
126
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Financial StatementsUniphar plc Annual Report 2020 Accounting Policies continued
Accounting Policies continued
Income tax continued
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the Company, and the Company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill. Deferred tax is also not accounted for if it arises from
initial recognition of 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 tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the
related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the Company and its subsidiaries are able to control the timing of the
reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Income Statement, except to the extent that it relates to items recognised
in OCI or directly in equity. In this case, the tax is also recognised in OCI or directly in equity, respectively.
Employee benefits
Share-based payments
Employees (including Executive Directors) of the Group receive remuneration in the form of share-based payment
transactions, whereby employees render service in exchange for shares or rights over shares in the ultimate parent
undertaking, Uniphar plc. The fair value of share entitlements granted is recognised as an employee expense in the
Income Statement with a corresponding increase in equity. The expense or credit recognised in the Income Statement
represents the product of the total number of shares anticipated to vest and the fair value of those shares.
Employee benefits continued
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in OCI. They are included in retained earnings in the Statement of
Changes in Equity and in the Balance Sheet. Changes in the present value of the defined benefit obligation resulting
from plan amendments or curtailments are recognised immediately in the Income Statement as past service costs.
The defined contribution pension charge to operating profit comprises of the contribution payable to the scheme for
the year.
Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents the amount
receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Group and
value-added tax.
The Group bases its estimate of returns, discounts and rebates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a financing
transaction, the fair value of the consideration is measured as the present value of all future receipts using the imputed
rate of interest.
The Group recognises revenue in the amount of the price expected to be received for goods and services supplied at a
point in time or over time, as contractual performance obligations are fulfilled, and control of goods and services passes
to the customer.
In certain of the Group’s contracts where another party is involved in providing goods or services to its customer, the
Group determines whether it is a principal or an agent in these transactions by evaluating the nature of its promise
to the customer. The Group is a principal and records revenue on a gross basis if it controls the promised goods or
services before transferring them to the customer. In circumstances where the Group’s role is only to arrange for
another entity to provide the goods or services, then the Group is an agent and revenue is recognised at the net amount
that it retains for its agency services. The Group has concluded that it is the principal in its revenue arrangements,
except for certain agreements in Product Access where the Group’s role is only to arrange for another entity to provide
the goods or services.
An analysis of the revenue recognition principles applied in each of the Group’s operating segments is provided below:
Certain Directors and employees may acquire shares in the Company under long-term incentive plans. The Company
accounts for the proceeds of these share issues as and when payment of the nominal value of the share is called.
Commercial & Clinical
Post-employment obligations
The liability or asset 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 market yields of high-quality corporate bonds that are denominated in the currency in which the benefits will be
paid, and that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in finance costs in the Income Statement.
Revenue is derived from the provision of goods and services falling within the Group’s ordinary activities after deduction
of trade discounts and value-added tax.
Sales of goods are recognised on despatch to the customer, and there is no unfulfilled performance obligation that could
affect the customer’s acceptance of the product. Despatch occurs when the goods have been shipped to the location
specified by the customer, the risks of obsolescence or loss have been transferred to the customer, the customer has
accepted the products in accordance with the sales contract, the acceptance provisions have lapsed or the company
has objective evidence that all criteria for acceptance have been satisfied. Where sales are on a consignment basis,
revenue is not recognised until a sale has been made to a third party. In some circumstances goods are sold with
volume rebates. Sales are measured at the prices specified in the sale contract, net of estimated volume rebates.
Volume rebates are assessed based on anticipated annual purchases and historical experience.
Revenue arises from the provision of resourcing and outsourcing services and the provision of patient solution services.
Revenue from service contracts is recognised in the financial year in which the services are rendered and when the
outcome of contract can be estimated reliably.
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Financial StatementsUniphar plc Annual Report 2020 Accounting Policies continued
Accounting Policies continued
Revenue continued
Product Access
Cost of Sales
Commercial & Clinical
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable
for goods supplied or services rendered, net of value-added tax and trade discounts. Revenue arises from the sale of
goods to retailers and hospitals.
The Group bases its estimate of returns, discounts and rebates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement. The Group recognises revenue in the amount
of the price expected to be received for goods supplied at a point in time as contractual performance obligations are
fulfilled, and control of goods passes to the customer.
The cost of sales attributable to the supply of goods includes all costs of purchase of inventory and other costs incurred
net of value-added tax in bringing inventories for resale to their present location and condition. When inventories are
sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue
is recognised.
The cost of sales attributable to the supply of services includes all direct costs attributable to the provision of resourcing
and outsourcing services net of value-added tax. The cost of service is recognised as an expense in the period in which
the related revenue is recognised.
Supply Chain & Retail - wholesaling
Product Access
Revenue is derived from the provision of goods and services falling within the Group’s ordinary activities after deduction
of trade discounts and value-added tax. Revenue arises from the sale of goods to wholesalers, retailers and hospitals
and the operation of retail pharmacies.
The cost of sales includes all direct costs attributable to the provision of services and cost of purchase of inventory for
resale net of value-added tax. When a service is provided or inventory is sold, the cost of service or carrying amount of
inventory is recognised as an expense in the period in which the related revenue is recognised.
Sale of pharmaceutical and healthcare related products are recognised on delivery to the purchaser, hospital or
retail pharmacy, when the purchaser has full discretion over the channel and price to sell the product and there is no
unfulfilled obligation that could affect the purchaser’s acceptance of the product. Delivery occurs when the products
have been shipped to the location specified by the purchaser, the risks of obsolescence or loss have been transferred
to the purchaser, the purchaser has accepted the products in accordance with the sales contract, the acceptance
provisions have lapsed or the Group has objective evidence that all criteria for acceptance have been satisfied.
Products sold to customers are often sold with volume rebates and also with the provision for the customer to return
faulty goods. Sales are measured at the prices specified in the sale contract, net of estimated volume rebates and
returns. Volume rebates are assessed based on anticipated annual purchases and historical experience.
Sales are normally made with credit terms of between 30-90 days. This element of financing is deemed immaterial and
is disregarded in the measurement of revenue.
Supply Chain & Retail – retail pharmacies
The Group operates retail shops for the sale of pharmacy and certain related products. Sales of products are
recognised on sale to the customer, which is considered the point of delivery. Retail sales are usually by cash, credit or
debit card.
Supply Chain & Retail
The cost of sales includes all costs of purchase of inventory and other costs incurred net of value-added tax in bringing
inventories for resale to their present location and condition. When inventories are sold, the carrying amount of those
inventories are recognised as an expense in the period in which the related revenue is recognised.
Exceptional items
With respect to exceptional items, the Group has applied an Income Statement format which seeks to highlight
significant items within Group results for the year. Such items may include restructuring costs, professional fees
including directly attributable acquisition costs, acquisition integration costs, impairment of non-current assets, profit
and loss on disposal of tangible assets and investments. The Group exercises judgement in assessing the particular
items which, by virtue of their scale and nature, should be disclosed in the Income Statement and related notes as
exceptional items.
130
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Financial StatementsUniphar plc Annual Report 2020 Notes to the Financial Statements
1 Significant estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal
the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies.
Management estimates and judgements
Information about critical estimates and judgements in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements are included in the following notes:
Impairment assessment of goodwill and other non-current assets
The Group tests annually whether goodwill has suffered any impairment. Determining whether goodwill is impaired
requires comparison of the value-in-use for the relevant CGUs to the net assets attributable to these CGUs. The
value-in-use calculation is based on an estimate of future cash flows expected to arise from the CGUs and these are
discounted to net present value using an appropriate discount rate. In calculating value-in-use, management judgement
is required in forecasting cash flows of CGUs, in determining terminal growth values and in calculating an appropriate
discount rate. The goodwill impairment test is sensitive to these estimates. The Group has performed sensitivity analysis
over the value-in-use calculation with respect to the key estimates. Management have performed detailed sensitivity
analysis on each of the CGUs by applying sensitivities to each of the key assumptions. This analysis resulted in an
excess in the recoverable amount over their carrying amount under each approach for all CGUs. Management believe
that any reasonable change in any of the key assumptions would not cause the carrying value of goodwill to exceed the
recoverable amount. Further information is detailed in the intangible assets note 10.
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period. Impairment tests in respect of property, plant and equipment and
intangible assets are also performed on a CGU basis.
IFRS 16 “Leases”
IFRS 16 “Leases” required management judgement in the selection of the appropriate discount rates to be used in the
discounting of the expected future payments to present value. The discount rate applied is the interest rate implicit in
the lease, if that rate can be determined, or the Group’s incremental borrowing rate which is calculated using a portfolio
approach, based on the nature of the lease. The discount rate per lease asset class is:
» Buildings
3%
» Plant and equipment 4%
» Motor Vehicles
5%
Impairment of inventory
The Group sells pharmaceutical, health and beauty products and medical devices. Pharmaceutical includes ethical
medicines, OTC, hospital and veterinary products. As a result, it is necessary to consider the recoverability of the
carrying amount of inventory at the end of each financial year. When calculating any inventory impairment, management
applies judgement in considering the nature and condition of the inventories, current estimated selling prices, as well as
applying assumptions around anticipated saleability of goods held for resale. See note 15 for the carrying amount of the
inventories and the provision recognised.
Revenue recognition
Management judgement is required in the assessment of whether the Group acts as an agent or a principal in
transactions and accordingly whether revenue should be recorded on a gross or net basis. As part of this assessment,
the Group has considered its responsibilities for fulfilling contracts, inventory risk, and establishing selling prices and
therefore it has determined that it acts as a principal.
1 Significant estimates and judgements continued
Income taxes
The Group is subject to income taxes in numerous jurisdictions and judgement is therefore required in determining the provision
for income taxes. Provisions for taxes require judgement and estimation in interpreting tax legislation, current case law and the
uncertain outcomes of tax audits and appeals. Where the final outcome of these matters differs from the amounts recognised,
differences will impact the tax provisions once the outcome is known. In addition, the Group recognised deferred tax assets,
mainly relating to unused tax losses, when it is probable that the assets will be recovered through future profitability and tax
planning. The assessment of recoverability involves judgement. Further information is contained in note 7, income tax expense.
Business combinations
In accounting for business combinations, the identifiable assets, liabilities and contingent liabilities acquired have to be
measured at their fair values. Judgement is required in; estimating the fair value of inventory with reference to current
selling prices and an assessment of obsolescence and demand for inventory; the fair value of trade debtors with
reference to the ageing and recoverability of these, onerous contracts, the fair value of leased assets and estimating
the deferred contingent consideration. Additionally, management judgement is also required in the identification and
valuation of any potential intangible assets arising on acquisitions. Details concerning acquisitions and business
combinations are outlined in note 35.
Provisions
The amount recognised for a provision is management’s best estimate of the expenditure to be incurred. Provisions are
measured at each Balance Sheet date based on the best estimate of the expected settlement amount. Changes to the best
estimate of the settlement amount may result from changes in the amount of timing of the outflows or changes in discount rates.
Deferred contingent consideration is recognised in the Group Balance Sheet as provisions. The expected payment
is determined in respect of each individual agreement taking into account the expected level of profitability of each
acquisition. Deferred contingent consideration is recognised at fair value at the acquisition date and included in the
cost of the business combination. Deferred contingent consideration arrangements are based on earn-out agreements
providing for future payment if certain pre-defined profit targets are achieved. The fair value of deferred contingent
consideration is estimated using an income-based approach, by estimating the expected payment based on the
forecasted performance of the acquired business and discounting the expected future payment to present value using
an appropriate discount rate. The movement in deferred contingent consideration in the period is outlined in note 19.
Further details on measurement, sensitivities applied, and maturity profile are outlined in note 32.
Useful economic lives of property, plant and equipment
Determining the useful life of property, plant and equipment requires judgement. Management regularly reviews the
useful economic lives and residual values. They are amended when necessary to reflect current estimates, based on
technological advancement, economic utilisation and the physical condition of the assets. See note 11 for the carrying
amount of property, plant and equipment, and the depreciation charge for each class of asset, and the accounting
policies for the useful economic lives for each class of asset.
Exceptional items
The Group income statement separately identifies results before exceptional items. Exceptional items are those that in
our judgement need to be disclosed by virtue of their size, nature or incidence. The Group believes that this presentation
provides additional analysis as it highlights one-off items and non-trading items. The determination of “significant”
as included in our definition uses qualitative and quantitative factors which remain consistent from period to period.
Management uses judgement in assessing the particular items, which by virtue of their scale and nature, are disclosed in
the Group Income Statement and related notes as exceptional items. Management considers the Group Income Statement
presentation of exceptional items to be appropriate as it provides useful additional information and is consistent with the
way that financial information is measured by management and presented to the Board. In that regard, management
believes it to be consistent with paragraph 85 of IAS 1 “Presentation of financial statements” (“IAS 1”), which permits the
inclusion of line items and subtotals that improve the understanding of performance.
132
133
Notes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 2 Revenue
Revenue
Commercial & Clinical
Product Access
Supply Chain & Retail
Total Revenue
2020
€’000
2019
€’000
1,823,854
1,665,283
2020
€’000
2019
€’000
269,780
187,505
1,366,569
204,031
132,245
1,329,007
1,823,854
1,665,283
The Commercial & Clinical revenue of €269,780,000 (2019: €204,031,000) consists of revenue derived from MedTech
of €199,044,000 (2019: €157,691,000) and Pharma of €70,736,000 (2019: €46,340,000).
Segmental information
Segmental information is presented in respect of the Group’s geographical regions and operating segments. The
operating segments are based on the Group’s management and internal reporting structures.
Geographical analysis
The Group operates in two principal geographical regions being Ireland and the UK. The Group also operates in other
European countries and the US which are not material for separate identification.
The following is a geographical analysis presented in accordance with IFRS 8 “Operating Segments” which requires
disclosure of information about country of domicile (Ireland) and countries with material revenue.
Ireland
UK
Rest of the World (ROW)
2020
€’000
2019
€’000
1,540,380
214,352
69,122
1,476,247
152,623
36,413
1,823,854
1,665,283
2 Revenue continued
At 31 December 2020
Intangible assets (excluding goodwill)
Property, plant and equipment
Deferred tax asset/(liability)
Other receivables
Employee benefit surplus
Financial assets – Investment in equity instruments
Non-current assets (excluding goodwill)
Goodwill
Non-current assets
At 31 December 2019
Intangible assets (excluding goodwill)
Property, plant and equipment
Deferred tax asset/(liability)
Other receivables
Financial assets – Investment in equity instruments
Ireland
€’000
15,824
141,774
4,247
1,097
12
25
162,979
Ireland
€’000
5,146
108,134
4,730
1,132
25
UK
€’000
391
8,913
671
-
-
-
9,975
UK
€’000
86
9,685
242
-
-
ROW
€’000
-
3,043
(394)
-
-
-
Total
€’000
16,215
153,730
4,524
1,097
12
25
2,649
175,603
358,283
533,886
Total
€’000
5,232
119,483
4,676
1,132
25
ROW
€’000
-
1,664
(296)
-
-
Non-current assets (excluding goodwill)
119,167
10,013
1,368
130,548
Goodwill
Non-current assets
272,544
403,092
134
135
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 2 Revenue continued
Operating segments
IFRS 8 “Operating Segments” requires the reporting information for operating segments to reflect the Group’s
management structure and the way the financial information is regularly reviewed by the Group’s Chief Operating
Decision Maker (CODM), which the Group has defined as the Board of Directors.
The Group operates with three divisions, being, Commercial & Clinical, Product Access, and Supply Chain & Retail.
These divisions align to the Group’s operational and financial management structures.
» Commercial & Clinical provide outsourced services, specifically sales, marketing and multichannel account
management to pharmaco-medical manufacturers, and distribution and support services to medical device
manufacturers. Uniphar offer a fully integrated multi-channel account management solution that is supported through
market data, insights and digital programmes. We integrate these programmes with our supply chain and distribution
capability to provide a full end to end service to manufacturers;
» Product Access consists of two service offerings, being: On Demand and Exclusive Access. On Demand provides
access to pharmaco-medical products and treatments, by developing valuable relationships and interactions between
manufacturers and other healthcare stakeholders. This business operates in both the retail and hospital markets in
Ireland and the UK. Exclusive Access provides bespoke distribution partnerships to pharmaceutical partners for key
brands, with new programmes focused on speciality pharmaceutical products. Delivering a unique patient support
programme that allows healthcare professionals to connect with patients, on a global basis; and
» Supply Chain & Retail provides both pre-wholesale distribution and wholesale distribution of pharmaceutical,
healthcare and animal health products to pharmacies, hospitals and veterinary surgeons in Ireland. Uniphar operate
a network of pharmacies under the Life, Allcare and Hickey’s brands. Additionally, through the extended Uniphar
symbol group, the business provides services and supports that help independent community pharmacies to
compete more effectively.
Operating segments results
The Group evaluates performance of the operational segments on the basis of gross profit from operations.
Revenue
Gross profit
Revenue
Gross profit
2020
Commercial
& Clinical
€’000
2020
Product
Access
€’000
2020
Supply Chain
& Retail
€’000
2020
Total
€’000
269,780
187,505
1,366,569
1,823,854
92,193
30,423
94,636
217,252
2019
Commercial
& Clinical
€’000
2019
Product
Access
€’000
2019
Supply Chain
& Retail
€’000
2019
Total
€’000
204,031
132,245
1,329,007
1,665,283
76,754
17,199
86,649
180,602
Assets and liabilities are reported to the Board at a Group level and are not reported on a segmental basis.
3 Other operating income
Other income and commission
Dividends receivable from investments
4 Exceptional charge
Professional fees including acquisition costs
Redundancy and restructuring costs
Initial public offering costs
Acquisition integration costs
Settlement loss on closure of defined benefit pension scheme
Foreign exchange revaluation of deferred contingent consideration
2020
€’000
241
-
241
2020
€’000
(4,300)
(2,596)
-
(559)
(488)
1,168
2019
€’000
211
61
272
2019
€’000
(5,267)
(2,289)
(2,432)
(629)
-
(1,426)
Exceptional charge recognised in operating profit
(6,775)
(12,043)
Deferred and deferred contingent consideration
Gain on settlement of derivative financial instrument
Refinancing costs
Exceptional credit recognised in finance costs
Total Exceptional charge
Deferred and deferred contingent consideration
2,077
-
(138)
1,939
5,251
1,765
(285)
6,731
(4,836)
(5,312)
Deferred and contingent consideration relates to a release of €4,348,000 following a review of expected performance
against earn out and contractual targets. Additionally, a provision of €1,896,000 has been recognised in respect of
deferred contingent consideration payable in relation to the EPS Group and a payment of €375,000 in respect of
Outcome Medical Solutions.
In the prior year, deferred and deferred contingent consideration relates to €5,290,000 in respect of Clinical Pyramid
Limited, and €546,000 in respect of Murrays Medical Limited. These amounts were released in the year following a
review of expected performance against earn-out targets. Additionally, a provision of €585,000 was recognised in
respect of deferred consideration receivable on the disposal of a retail pharmacy.
5 Operating profit
Operating profit is stated after charging/(crediting):
Directors’ remuneration:
» Emoluments
» Defined contribution pension*
» Fees
Depreciation (note 11)
Amortisation (note 10)
Foreign exchange net (gain)/loss
2020
€’000
2019
€’000
2,980
29
715
17,626
2,368
(628)
2,528
103
558
15,911
2,394
259
*Defined contribution pension costs included in Directors’ remuneration which were charged to the Group Income
Statement relate to pension contributions relating to one Director (2019: two).
136
137
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 5 Operating profit continued
6 Finance cost
Auditors’ remuneration (including expenses) for the statutory audit of the Group’s financial statements, subsidiary financial
statements and other services carried out for the Group by the Company’s auditors and subsidiary auditors. Included
in fees payable for the audit of Group accounts are total fees of €19,000 (2019: €19,000) which are due to the Group’s
auditor in respect of the Parent Company. The non-audit services performed by PwC during the year largely related to due
diligence and tax advice on acquisitions completed during the year.
Group Auditors – PwC
» Audit of group accounts
» Tax compliance services
» Tax advisory services
» Other non-audit services
Subsidiary company auditors – Non PwC
» Audit of subsidiary accounts
» Tax compliance services
Staff costs (including Directors):
» Wages and salaries
» Social welfare costs
» Pension costs (note 20)
2020
€’000
685
80
842
315
208
49
2019
€’000
604
59
825
1,183
206
43
120,496
11,793
4,219
90,373
9,125
2,922
136,508
102,420
€209,000 (2019: €nil) of payroll costs were capitalised to freehold land and buildings as these costs are directly related
to development and construction work completed in the year to 31 December 2020.
The increase in staff costs is largely due to the acquisitions completed in the current year, and the full year impact of the
acquisitions which were completed in 2019.
Employees
The average number of persons employed by the Group (including Directors) during the year was as follows:
Administration
Selling, distribution and warehouse
2020
Number
2019
Number
841
1,559
2,400
664
1,175
1,839
Interest on lease obligations
Interest payable on borrowings
Fair value adjustment to deferred and deferred contingent consideration
Fair value adjustment on facility termination fee
Amortisation of refinancing transaction fees
Net interest expense/(income) from pension scheme liabilities (note 20)
Interest receivable
Other fair value adjustments
Finance cost before exceptional credit
Decrease in fair value deferred contingent consideration (note 4)
Exercise of derivative financial instrument (note 4)
Refinancing costs (note 4)
Exceptional credit recognised in finance cost
Total Finance cost
7
Income tax expense
Recognised in the Income Statement:
Current income tax:
Republic of Ireland
Overseas
Total current income tax expense
Deferred income tax:
Origination and reversal of temporary differences:
Property, plant and equipment
Employee benefits
Other timing differences
Tax losses and other differences
Total deferred income tax (credit)/expense
Total income tax expense
Attributable to:
Continuing operations
Total income tax expense
2020
€’000
2,988
2,878
2,112
-
268
3
(11)
114
8,352
2019
€’000
2,637
3,871
1,725
(122)
282
(15)
(24)
126
8,480
(2,077)
-
138
(5,251)
(1,765)
285
(1,939)
(6,731)
6,413
1,749
2020
€’000
2019
€’000
4,002
3,307
7,309
206
(96)
(1,373)
(326)
(1,589)
2,914
1,748
4,662
235
82
-
558
875
5,720
5,537
5,720
5,720
5,537
5,537
138
139
Included in other timing differences is €1,452,000 associated with the reversal of the deferred tax liability recognised
on the acquisition of M3 Medical Limited in 2019 which is offset by a deferred tax charge of €79,000 in the EPS Group.
See note 13 for further details.
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 7
Income tax expense continued
Factors affecting the tax expense in future years
In addition to the Republic of Ireland, the Group has operations in the overseas tax jurisdictions of the UK, the
Netherlands, the Nordic countries and the US. The total tax charge for future periods will be affected by changes to
applicable tax rates in force in jurisdictions in which the Group operates and other changes in tax legislation applicable
to the Group’s businesses.
» The UK tax authority has announced that its statutory corporate tax rate of 19% will remain unchanged for the fiscal
year beginning 1 April 2021.
» The Netherlands standard corporate income tax rate of 25% remains unchanged for 2021. However, the 16.5%
tax rate band on the first tier of profits has decreased to 15% while the benchmark for the first tier of profits has
increased from €200,000 to €245,000 in 2021 and €395,000 in 2022.
» The Swedish corporate income tax rate of 21.4% has reduced to 20.6% from 1 January 2021.
Reconciliation of effective tax rate
Profit on ordinary activities before tax
2020
€’000
2019
€’000
33,531
26,458
Profit on ordinary activities multiplied by the standard rate of corporation tax in the
Republic of Ireland of 12.5% (2019: 12.5%)
4,191
3,307
Effects of:
Disallowable expenses
Impairment provision
Higher overseas income tax rates
Income not taxable
Utilisation of tax losses not previously recognised
Tax base asset adjustments in respect of prior years
(Over)/under-provision of corporation tax in prior year
Total income tax expense for the year
8 Earnings per share
Basic and diluted earnings per share have been calculated by reference to the following:
1,210
-
1,199
-
(752)
214
(342)
5,720
1,030
15
653
(2)
(256)
478
312
5,537
2020
2019
Profit for the financial year attributable to owners (€’000)
27,827
21,026
Weighted average number of shares (‘000)
262,436
183,546
Earnings per ordinary share (in cent):
» Basic
» Diluted
140
10.6
10.6
11.5
11.5
8 Earnings per share continued
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial year attributable to owners
Exceptional charge recognised in operating profit (note 4)
Exceptional credit recognised in finance costs (note 4)
Amortisation of acquisition related intangibles
Profit after tax excluding exceptional items
Weighted average number of shares in issue in the year (000’s)
Adjusted basic and diluted earnings per ordinary share (in cent)
2020
€’000
2019
€’000
27,827
21,026
6,775
(1,939)
279
12,043
(6,731)
-
32,942
26,338
262,436
183,546
12.6
14.3
The weighted average number of ordinary shares includes the effect of 6,218,620 shares (2,582,596 on a weighted
basis in the year) granted under the LTIP that have met the share price performance conditions, but will not vest until 31
December 2024.
9 Dividends
A final dividend of €0.0073 per ordinary share was paid on 29 May 2020 and amounted to €1,993,000 in respect
of the period from IPO to 31 December 2019. There was no dividend paid during the comparative year ended 31
December 2019.
The Directors have proposed a final dividend of €0.01538 per ordinary share, subject to approval at the AGM. This
results in a total shareholder dividend of €4.2m in respect of the year ended 31 December 2020. If approved, the
proposed dividend will be paid on 17 May 2021 to ordinary shareholders on the Company’s register on 23 April 2021.
This dividend has not been provided for in the Balance Sheet at 31 December 2020, as there was no present obligation
to pay the dividend at year end.
141
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 10 Intangible assets
Cost
At 1 January 2019
Foreign exchange movements
Acquisitions
Additions
Disposals/retirements
At 31 December 2019
At 1 January 2020
Foreign exchange movements
Acquisitions (note 35)
Additions
Disposals/retirements
At 31 December 2020
Accumulated amortisation
At 1 January 2019
Amortisation
Disposals/retirements
At 31 December 2019
At 1 January 2020
Amortisation
Disposals/retirements
At 31 December 2020
Net book amounts
At 31 December 2019
At 31 December 2020
Computer
software
€’000
Trademark
€’000
Goodwill Technology
asset
€’000
€’000
Brand
name
€’000
Total
€’000
32,310
4
-
861
(66)
33,109
33,109
(7)
-
1,418
(4,352)
30,168
25,642
2,363
(66)
27,939
27,939
2,058
(4,331)
25,666
5,170
4,502
153
-
-
-
-
153
153
-
-
-
-
153
60
31
-
91
91
31
-
218,926
3,440
68,887
-
-
291,253
291,253
(5,096)
90,835
-
-
376,992
18,709
-
-
18,709
18,709
-
-
122
18,709
-
-
-
-
-
-
-
-
723
-
-
723
-
-
-
-
-
188
-
188
-
-
-
-
-
-
-
-
11,238
-
-
251,389
3,444
68,887
861
(66)
324,515
324,515
(5,103)
102,796
1,418
(4,352)
11,238
419,274
-
-
-
-
-
91
-
91
44,411
2,394
(66)
46,739
46,739
2,368
(4,331)
44,776
62
31
272,544
358,283
-
-
277,776
535
11,147
374,498
Acquisitions of €90,835,000 comprise of the following transactions (note 35):
» Goodwill of €44,816,000 arising on the acquisition of 100% of the ordinary share capital of Hickey’s Pharmacy Group.
» Goodwill of €21,287,000 arising on the acquisition of 100% of the membership interests of RRD International, LLC.
» Goodwill of €20,715,000 arising on the acquisition of 100% of the membership interests of Diligent Health Solutions, LLC.
» Goodwill of €2,219,000 arising on the acquisition of an 82.3% controlling interest of the ordinary share capital of
Innerstrength Limited.
» Goodwill of €1,108,000 arising on the acquisition of 100% of the ordinary share capital of Marie O’Brien Limited.
» Goodwill of €690,000 arising on the acquisition of 100% of the ordinary share capital of Bunclody Pharmacy Limited.
The Group continues to have a registered trademark known as Life Pharmacy. This trademark is used by customers
of Uniphar who operate under the common symbol of Life Pharmacy and this trademark symbol is a central part of
developing the Life brand. Amortisation of this trademark commenced in 2017.
The Group recognised a technology asset on the acquisition of Innerstrength Limited and a brand name on the
acquisition of Hickey’s Pharmacy Group (see note 35). Amortisation of these assets commenced at the date of
acquisition and it is being amortised over the remaining useful life ranging from three to ten years.
10 Intangible assets continued
Cash-generating units
Goodwill acquired in business combinations is allocated, at acquisition, to the cash-generating units (CGUs) that are
expected to benefit from that business combination, based on the Group’s existing CGUs or where more appropriate
the recognition of a new CGU. The CGUs represent the lowest level at which the associated goodwill is assessed for
internal management purposes and are not larger than the operating segments determined in accordance with IFRS 8
Operating Segments.
As disclosed in note 35, the initial accounting for the business combinations completed during the year has been
determined provisionally. As a result, the allocation of the goodwill recognised in 2020 to CGUs has not been finalised.
For 31 December 2020, the goodwill arising on business combinations completed during 2020 has been tested for
impairment by reference to the CGUs determined in accordance with the businesses acquired. For the acquisitions
completed in Q4 of 2020, which have not yet been allocated to CGUs, a market-based approach has been used given
the recent transaction date.
At 31 December 2019, the goodwill arising on the acquisitions of EPS Group and M3 Medical Limited had not been
finalised and remained unallocated. In 2020, the goodwill arising on the acquisition of EPS Group and M3 Medical
Limited was allocated to the Commercial & Clinical MedTech CGU, and the goodwill arising on the acquisition of Gort
Road Pharmacy Limited and Regional Pharmacy Limited also acquired in 2019 was allocated to the Retail Pharmacies
CGU, based on the CGUs that are expected to benefit from that business combination.
During 2020, the goodwill arising on the acquisition of Innerstrength Limited was allocated to the Product Access CGU,
and the goodwill arising on the acquisition of Diligent Health Solutions, LLC was allocated to the Commercial & Clinical
Pharma CGU, based on the CGUs that are expected to benefit from that business combination. In 2021, it is expected
that the goodwill arising on the acquisition of Hickey’s Pharmacy Group will be allocated between the Retail Pharmacies
CGU and the Supply Chain Services CGU, the goodwill arising on Marie O’Brien Limited and Bunclody Pharmacy
Limited will be allocated to the Retail Pharmacies CGU, and it is expected that the goodwill arising on the acquisition of
RRD International, LLC will be allocated to the Product Access CGU, based on the CGUs that are expected to benefit
from that business combination.
Commercial & Clinical MedTech
Supply Chain Services
Commercial & Clinical Pharma
Retail Pharmacies
Product Access
Acquisitions not yet allocated to CGUs
2020
€’000
2019
€’000
151,637
37,372
37,761
25,541
38,693
67,279
127,158
37,372
19,009
22,248
38,587
28,170
Net book value of goodwill at 31 December
358,283
272,544
Impairment testing of goodwill
Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. An
impairment loss is recognised for the amount by which the carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an 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 separately identifiable cash inflows
which are largely independent of the cash inflows from other assets or groups of assets (CGUs).
The recoverable amount of each CGU is determined based on value-in-use calculations. The carrying value of each
CGU is initially compared to its estimated value-in-use. There were no impairments during the year (2019: €nil).
As part of this assessment the Group continued to review the carrying value of goodwill associated with subsidiary
companies previously acquired as at 31 December 2020.
142
143
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 10 Intangible assets continued
Value-in-use Calculations
The value-in-use is calculated on the basis of estimated future cash flows discounted to present value. Estimated future
cash flows were determined by reference to the budget for the period 2021 to 2022 and management forecasts for each
of the following years from 2023 to 2025 inclusive. The terminal value was calculated using a long-term growth rate in
respect of the years after 2025. The estimates of future cash flows were based on the consideration of past experience
together with an assessment of the future prospects for each of the businesses within the CGUs. The assumptions used
are also referenced against external industry data.
The key assumptions used in the value-in-use calculations are the discount rate, the long-term growth rate, and the
cash flow forecasts. The pre-tax discount rates used were based on the Group’s estimated weighted average cost of
capital, adjusted to reflect risks associated with each CGU. The discount rate applied for each CGU was determined
to be between 10.6% and 11.0% (2019: 10.6% and 11.0%). The rate applied for the purpose of the Group impairment
testing was 11% (2019: 11%). In determining the terminal value of the value-in-use, it was assumed that cash flows after
the first five years will increase at a long-term growth rate ranging from 2.1% to 2.5% (2019: 2.1% to 2.5%). The rate
assumed was based on an assessment of the likely long-term growth prospects of the individual CGUs based on the
weighted average growth rate by geographies in which the CGU operates.
The value-in-use calculations assume that the markets in which each CGU operates will grow in accordance with
publicly available data, the Group will maintain its current market share, gross margin percentage will be maintained
at current levels and overheads will increase in line with expected levels of inflation. The cash flow forecasts assume
appropriate levels of capital expenditure and investment in working capital to support the growth in individual CGUs.
Fair value less cost of disposal calculations
The fair value less cost of disposal calculations are only prepared when the value-in-use calculations indicate a potential
impairment. At the Balance Sheet date this comparison did not indicate any potential impairment.
The fair value less costs of disposal is calculated as the maintainable EBITDA of each CGU multiplied by the
appropriate EBITDA valuation multiple attributable to that CGU. The fair value measurement is considered a Level 3 fair
value based on certain unobservable pricing inputs.
Sensitivity Analysis
The Group has conducted a sensitivity analysis on each of the CGUs by applying the following sensitivities; decreasing
free cash flows by 10%, increasing discount rates by 1%, and reducing long-term growth rates by 1%.
This analysis resulted in an excess in the recoverable amount over their carrying amount under each approach for all
CGUs. Management believe that any reasonable change in any of the key assumptions would not cause the carrying
value of goodwill to exceed the recoverable amount.
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145
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020
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11 Property, plant and equipment continued
Freehold
land and
buildings
€’000
Plant and
equipment
Total
€’000
€’000
COMPANY
Cost
At 1 January 2019
Additions
Disposals
At 31 December 2019
At 1 January 2020
Additions
Disposals
At 31 December 2020
Accumulated depreciation
At 1 January 2019
Charge for the year
At 31 December 2019
At 1 January 2020
Charge for the year
Disposals
At 31 December 2020
Net book amounts
At 31 December 2019
At 31 December 2020
Reconciliation to Balance Sheet
Property, plant and equipment
Right-of-use assets
Net book value at 31 December 2020
50,442
-
-
50,442
50,442
-
-
50,442
-
3,162
3,162
3,162
3,162
-
6,324
47,280
44,118
-
44,118
44,118
153
-
-
153
153
296
(153)
296
-
98
98
98
114
(153)
59
55
237
-
237
237
50,595
-
-
50,595
50,595
296
(153)
50,738
-
3,260
3,260
3,260
3,276
(153)
6,383
47,335
44,355
-
44,355
44,355
147
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020
12 Financial assets
12 Financial assets continued
Long-term receivables
Investments
in equity
instruments
€’000
Loans to
IPOS entities
and other
loans
€’000
Loans to
retail holding
companies
Total
€’000
€’000
353
-
353
353
353
328
328
328
328
25
25
17
-
17
17
17
17
17
17
17
-
-
14,749
(5,500)
14,766
(5,500)
9,249
9,266
9,249
9,266
9,249
9,266
9,249
9,266
9,249
9,266
9,249
9,266
9,249
9,266
-
-
-
-
GROUP
Cost
At 1 January 2019
Disposal
At 31 December 2019
At 1 January 2020
At 31 December 2020
Provision for impairment
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Net book amounts
At 31 December 2019
At 31 December 2020
Long-term receivables
Shares in
subsidiary
companies
Investments
in equity
instruments
€’000
€’000
Loans to
IPOS entities
and other
loans
€’000
Loans to
retail holding
companies
Total
€’000
€’000
248,458
42,164
-
290,622
290,622
2,675
293,297
1,890
1,890
1,890
1,890
288,732
291,407
224
-
-
224
224
-
224
199
199
199
199
25
25
17
-
-
17
17
-
17
17
17
17
17
-
-
14,749
-
(5,500)
14,766
-
(5,500)
9,249
9,266
9,249
-
9,266
-
9,249
9,266
9,249
9,266
9,249
9,266
9,249
9,266
9,249
9,266
-
-
-
-
COMPANY
Cost
At 1 January 2019
Additions
Disposal
At 31 December 2019
At 1 January 2020
Additions
At 31 December 2020
Provision for impairment
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Net book amounts
At 31 December 2019
At 31 December 2020
The main movements in financial assets in 2020 and 2019 are set out below:
GROUP AND COMPANY
Investments in equity instruments
The fair value of €25,000 (2019: €25,000) is represented by the Group’s investment in Independent Life Pharmacy
plc (Life) comprising of 78 A ordinary shares of €0.01 each and 25,000 C shares of €1.00 each. The C shares are
non-voting and do not confer any dividend entitlement. Independent Life Pharmacy plc represents the Life symbol group
owned jointly by pharmacy owners through B shares and Uniphar plc through A shares. The pharmacy owners are
entitled to nominate the majority of the directors to the Life Board in addition to Uniphar nominees.
Loans to IPOS entities and other loans
As part of the IPOS restructuring programme the retail holding companies, Riverchem DAC (Riverchem), and Inischem
DAC (Inischem), were formed to amalgamate and restructure the portfolio of pharmacies and were aligned to their
funding banks. The closing net book value is €nil (2019: €nil) and comprised of assigned debt receivables.
148
149
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 12 Financial assets continued
Loans to retail holding and management companies
These loans represent amounts advanced to Riverchem and Inischem. During 2019, the loan receivable of €5,500,000
from Inischem was disposed of with cash payments of €5,359,000 received in final settlement of the balance, and the
remaining unpaid balance of €141,000 was expensed to the Income Statement.
The Group has recognised an impairment provision for the full value of these loans, and at 31 December 2020 the
carrying value of amounts due from the retail holding companies amounted to €nil (2019: €nil).
COMPANY
Shares in subsidiary companies
Financial assets of the parent company, Uniphar plc, include shares in subsidiary companies with a net book value of
€291,407,000 (2019: €288,732,000). The main movements in 2020 and 2019 are:
Additions:
»
In March 2020, the Company acquired an 82.3% controlling interest of the ordinary share capital of Innerstrength
Limited, a company incorporated in Ireland for consideration of €2,675,000.
In July 2019, the Company acquired 100% of the ordinary share capital of Durbin plc, and Durbin Inc. (Durbin),
companies incorporated in the UK and the US respectively.
»
13 Deferred tax asset
The following is an analysis of the movement in the major categories of deferred tax assets recognised by the Group for
the years ended 31 December 2020 and 2019:
Employee
benefits
€’000
Property
plant and
equipment
€’000
Tax losses
and other
differences
€’000
Other
Total
€’000
€’000
GROUP
At 1 January 2019
Reclassification
Acquisitions
Recognised in Income Statement
Recognised in Other Comprehensive Income
Translation adjustment
At 31 December 2019
At 1 January 2020
Acquisitions (note 35)
Recognised in Income Statement
Recognised in Other Comprehensive Income
Utilisation of loss relief
Translation adjustment
At 31 December 2020
Deferred tax asset
Deferred tax liability
(39)
(4)
-
(82)
151
-
26
26
-
96
(38)
-
(7)
77
77
-
77
945
(13)
(74)
(235)
-
(4)
619
619
-
(206)
-
-
9
422
641
(219)
422
6,197
17
111
(558)
-
12
5,779
5,779
-
326
-
(962)
(24)
5,119
5,119
-
5,119
-
-
(1,748)
-
-
-
(1,748)
(1,748)
(697)
1,373
-
-
(22)
(1,094)
-
(1,094)
(1,094)
7,103
-
(1,711)
(875)
151
8
4,676
4,676
(697)
1,589
(38)
(962)
(44)
4,524
5,837
(1,313)
4,524
13 Deferred tax asset continued
The deferred tax asset in relation to losses reflects the Group’s expected utilisation of carried forward trading tax losses
in respect of its pharmaceutical wholesale and agency businesses in Ireland and its Product Access business in the UK.
During 2020, the previously recognised deferred tax liability of €1,452,000 on the disposal of the Teleflex business as
part of the 2019 M3 Medical Limited acquisition crystallised into an actual corporation tax liability. This is partially offset
by a deferred tax charge of €79,000 in the EPS Group.
The other deferred tax liability of €1,094,000 relates to the recognition of a tax liability of €697,000 associated with
the tax amortisation benefit attributed to the Hickey’s brand name following the November 2020 acquisition, and an
expected future tax liability of €397,000 associated with the EPS Group where the taxing authority allows the deferring
of a percentage of current profits for taxing in future years.
The Group has an unrecognised deferred tax asset of €6,678,000 (2019: €6,701,000) arising from losses carried
forward. The Directors believe sufficient taxable profits to utilise this potential asset may arise in the future, but that
there is currently insufficient evidence to support the recognition of a deferred tax asset. These balances may be carried
forward indefinitely under current tax law and are available for offset against future profits and gains generated by the
companies which hold the losses.
COMPANY
At 1 January 2019
Recognised in Income Statement
At 31 December 2019
At 1 January 2020
Recognised in Income Statement
Tax losses surrendered to other Irish Group companies
At 31 December 2020
Deferred
tax asset
€’000
2,386
338
2,724
2,724
188
(680)
2,232
The Company’s deferred tax asset relates primarily to the recognition of tax losses on its management services trade
and expenses of management associated with its investment activities. The Directors believe that sufficient taxable
profits will arise in the future to utilise these deferred tax assets.
150
151
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 14 Assets held for sale
16 Trade and other receivables
GROUP
At 1 January 2019
Acquisitions
Disposals
At 31 December 2019
At 1 January 2020
Disposals
At 31 December 2020
4,000
-
(415)
3,585
3,585
(1,285)
2,300
Properties Other assets
€’000
€’000
Total
€’000
4,000
4,400
(415)
7,985
-
4,400
-
4,400
4,400
(4,400)
7,985
(5,685)
-
2,300
Properties held for sale relate to properties acquired on completion of the acquisition of Bradley’s Pharmacy Group.
These properties are presented in the Balance Sheet at the lower of their carrying amount and fair value less any costs
to sell. Uniphar plc acquired Bradley’s Pharmacy Group from examinership in November 2018, and in accordance with
the application of the examinership scheme arrangement acquired non-recourse borrowings of €4,000,000 which are
secured by these properties.
During 2020, the Group disposed of €1,285,000 (2019: €415,000) of properties which were previously held for sale.
The remaining properties held for sale are available for immediate sale in their present condition subject to terms that
are usual and customary for properties of this nature. The individual properties are being actively marketed and the
Group is committed to its plan to sell these properties in an orderly manner.
The other assets related to certain business assets acquired as part of the acquisition of M3 Medical Limited. These
assets were disposed of in February 2020 for an amount equal to their carrying value, and the deferred contingent
consideration attributable to the sale of these assets was paid.
15 Inventory
GROUP
Goods for resale
2020
€’000
2019
€’000
115,566
97,684
The replacement cost of inventories did not differ materially from the Balance Sheet amounts at 31 December 2020 and
31 December 2019.
Inventory stated above is net of an impairment provision of €4,978,000 (2019: €1,140,000). Write-downs of inventories
recognised as an expense during 2020 amounted to €3,838,000 (2019: €392,000).
In 2020, goods for resale recognised as cost of sales amounted to €1,513,376,000 (2019: €1,412,000,000).
152
Current trade and other receivables
GROUP
Trade receivables
Prepayments
Accrued income
Other receivables
Deferred consideration receivable
COMPANY
Trade receivables
Amounts due from subsidiaries
Prepayments
Accrued income
Other receivables
Value added tax
Corporation tax
Deferred consideration receivable
2020
€’000
2019
€’000
108,629
3,368
4,449
8,575
175
118,770
5,423
3,865
8,056
294
125,196
136,408
-
362,271
499
-
3,438
698
113
175
79
429,540
454
3
4,924
256
113
174
367,194
435,543
Amounts due from subsidiaries are unsecured, interest free and are repayable on demand.
Tax is repayable at various dates over the coming months in accordance with the applicable statutory provisions.
Details of the provision for impairment of trade and other receivables is outlined in note 32.
Non-current trade and other receivables
GROUP
Other receivables
Deferred consideration receivable
COMPANY
Other receivables
Deferred consideration receivable
2020
€’000
2019
€’000
639
458
531
601
1,097
1,132
270
142
412
-
138
138
153
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 16 Trade and other receivables continued
17 Cash and cash equivalents and restricted cash continued
Deferred consideration receivable
GROUP
Within one year
Between one and two years
COMPANY
Within one year
Between one and two years
2020
€’000
2019
€’000
175
458
633
175
142
317
294
601
895
174
138
312
The deferred consideration receivable of €633,000 (2019: €895,000) relates to contractual amounts due from
the disposal of Uniphar International Holdings Limited, IPOS Holding 158 Limited, IPOS Holding 162 Limited and
pharmacies disposed by Lindchem DAC.
17 Cash and cash equivalents and restricted cash
Cash and cash equivalents consist of the following:
GROUP
Cash at bank and in hand
Restricted cash deposits at call
COMPANY
Cash at bank and in hand
Restricted cash deposits at call
2020
€’000
2019
€’000
60,410
3,097
114,040
2,142
63,507
116,182
3,234
2,100
5,334
67,328
2,142
69,470
The restricted cash balance relates to a rent deposit on the Citywest property and an amount held in escrow by RRD
International, LLC.
Reconciliation to Cash Flow Statement
The cash and cash equivalents shown in the Cash Flow Statement at the end of the financial year is reconciled
as follows:
GROUP
Cash and cash equivalents
COMPANY
Cash and cash equivalents
18 Borrowings
Bank loans are repayable in the following periods after 31 December:
GROUP
» Amounts falling due within one year
» Amounts falling due between one and five years
COMPANY
» Amounts falling due within one year
» Amounts falling due between one and five years
2020
€’000
2019
€’000
60,410
114,040
3,234
67,328
2020
€’000
2019
€’000
2,311
95,615
22,583
66,977
97,926
89,560
-
95,336
16,827
65,796
95,336
82,623
The Group’s total bank loans at 31 December 2020 were €97,926,000 (2019: €89,560,000). Borrowings under invoice
discounting facilities as at the Balance Sheet date were €nil (2019: €1,505,000). Bank loans falling due within one
year include €2,300,000 (2019: €3,585,000) of loans arising on the acquisition of Bradley’s Pharmacy Group which are
secured by properties acquired on the acquisition which are classified as held for sale. Following the disposal of these
properties these loans are required to be repaid (note 14).
The Group entered into a new facility on 2 July 2020. The total loan value of the revolving credit facility (RCF) available
for use within this agreement is €150,000,000, with an additional uncommitted accordion of €90,000,000. This facility
runs for 5 years to 2025 with an option to extend by a further two years, with repayment of all loans on termination of
the facility currently at 2 July 2025.
At 31 December, the Group’s RCF in use were subject to an interest rate of Euribor +1.5% (2019: the Group’s term
loans were subject to Euribor +2%) and the invoice discount funding were subject to interest rates of Prime +1.75%
(2019: Prime +1.75%). A breakdown of the maturity profile of the Group’s borrowings is provided in note 32.
The Company’s total bank loans at 31 December 2020 were €95,336,000 (2019: €82,623,000). At 31 December, they
were subject to an interest rate of Euribor +1.5% (2019: Euribor +2%).
154
155
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 18 Borrowings continued
Bank security
Bank overdrafts (including invoice discounting) and bank loans of €97,926,000 (2019: €89,560,000) are secured by
cross guarantees and fixed and floating charges from the Company and certain subsidiary undertakings.
Of the total facilities, invoice discounting with recourse to the Company, are secured by way of assignment of book
debts to the bank. At the Balance Sheet date €nil (2019: €1,505,000) of invoice discounting facilities were utilised by
the Group.
19 Provisions
GROUP
At 1 January
Charge to Income Statement
Unwinding of discount
Arising on acquisition
Reclassified
Utilised during the year
Released during the year
Foreign currency movement
At 31 December
Deferred
contingent
consideration
Lease
dilapidation
Warranty
provision
Total
Total
2020
€’000
2020
€’000
2020
€’000
2020
€’000
2019
€’000
80,811
1,896
2,026
31,777
-
(28,491)
(4,348)
(2,507)
81,164
213
-
-
360
-
(50)
-
-
523
45
8
-
-
-
-
-
(3)
50
81,069
1,904
2,026
32,137
-
(28,541)
(4,348)
(2,510)
52,142
-
1,939
33,966
(1,752)
(1,314)
(5,836)
1,924
81,737
81,069
Deferred Contingent Consideration
Deferred contingent consideration represents the present value of deferred contingent acquisition consideration which
would become payable based on pre-defined profit thresholds being met. During the year, payments of €28,491,000
were made in respect of prior year acquisitions. Deferred contingent consideration of €4,348,000 in respect of prior year
acquisitions was released in the year following a review of expected performance against earn-out targets. As part of
this review, separately an increase of €1,896,000 was also made in respect of prior year acquisitions. Further details on
the measurement of deferred contingent consideration is provided in note 32. The balance at 31 December 2020 relates
to the following acquisitions:
» Dialachemist Limited (2015)
» Macromed (UK) Limited (2018)
» Sisk Healthcare Group (2018)
» Angiocare B.V. (2018)
» Durbin plc and Durbin Inc. (Durbin) (2019)
» EPS Vascular AB, EP Endovascular AB and EPS Vascular OY (EPS Group) (2019)
» M3 Medical Limited (2019)
»
» Diligent Health Solutions, LLC (2020)
» RRD International, LLC (2020)
Innerstrength Limited (2020)
19 Provisions continued
The deferred contingent consideration at 31 December 2019 related to the acquisition of the following:
» Dialachemist Limited (2015)
» Macromed (UK) Limited (2018)
» Sisk Healthcare Group (2018)
» Angiocare B.V. (2018)
» Durbin plc and Durbin Inc. (Durbin) (2019)
» EPS Vascular AB, EP Endovascular AB and EPS Vascular OY (EPS Group) (2019)
» M3 Medical Limited (2019)
The maturity profile of the deferred contingent consideration at 31 December 2020 is outlined in note 32.
Lease dilapidation
The lease dilapidation provision covers the cost of reinstating certain Group properties at the end of the lease term. This
is based on the terms of the individual leases which set out the conditions relating to the return of property. The timing of
the outflows will match the ending of the relevant leases with various dates up to 2042.
Warranty provision
The warranty provision relates to a product warranty provided to customers on certain medical devices. The estimated
cost of the warranty is provided for upon recognition of the sale of the product. The costs are estimated based on actual
historical experience of expenses incurred and on estimated future expenses related to current sales and are updated
periodically. Actual warranty costs are charged against the warranty provision.
COMPANY
Deferred contingent consideration:
At 1 January
Arising on acquisition
Unwinding of discount
Utilised during the year
Released during the year
Foreign currency movement
At 31 December
Deferred Contingent Consideration
2020
€’000
2019
€’000
56,385
1,685
1,379
(24,253)
(1,597)
(1,159)
34,817
18,847
1,296
-
-
1,425
32,440
56,385
Deferred contingent consideration represents the present value of deferred contingent acquisition consideration which
would become payable based on pre-defined profit thresholds being met. During the year, payments of €24,253,000
were made in respect of prior year acquisitions. Deferred contingent consideration of €1,597,000 in respect of prior year
acquisitions was released in the year following a review of expected performance against earn-out targets. The balance
at 31 December 2020 relates to the following acquisitions:
» Sisk Healthcare Group (2018)
» Durbin plc and Durbin Inc. (Durbin) (2019)
»
Innerstrength Limited (2020)
The deferred contingent consideration at 31 December 2019 related to the acquisition of the following:
» Sisk Healthcare Group (2018)
» Durbin plc and Durbin Inc. (Durbin) (2019)
156
157
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 20 Employee benefit surplus/(obligation)
The pension entitlements of employees, including Executive Directors, arise under one defined benefit scheme and
three defined contribution schemes and are secured by contributions by the Group to separate trustee administered
pension funds in the Republic of Ireland. The trustees are responsible for the management and governance of the
plans including compliance with all relevant laws and regulations. The benefits provided by the defined benefit plan is
no longer linked to future salary inflation due to the accrual of pension benefit ceasing on these schemes in prior years.
Contributions to the Whelehan Group Pension Scheme were terminated in October 2019, and the scheme was wound
up in January 2020. The assets of the scheme were distributed in line with members chosen options and no assets or
liabilities remain. Any former members of these schemes still employed by the Group were offered membership of the
Uniphar Group Retirement Benefits Scheme for future service benefits.
The defined benefit schemes are:
» The Cahill May Roberts Limited Contributory Pension Plan
» The Whelehan Group Pension Scheme (wound up in January 2020)
The pension charge for the year is €4,219,000 (2019: €2,922,000) comprising current service cost of €nil (2019:
€44,000) and defined contribution scheme costs of €4,219,000 (2019: €2,878,000). The net finance cost resulting from
the scheme surplus/deficit is €3,000 (2019 income: €15,000).
The funding requirements in relation to the Group’s defined benefit schemes are assessed in accordance with the
advice of independent qualified actuaries and valuations are prepared at triennial intervals. Annual contributions are
based on the advice of professionally qualified actuaries using the projected unit method. The actuarial valuation reports
are available for inspection by members of the schemes at the registered office of the Company but are not available for
public inspection.
An updated actuarial valuation for the purposes of International Accounting Standards 19 “Employee Benefits” (IAS 19)
was carried out as at 31 December 2020 by a qualified independent actuary in respect of the Group pension schemes.
Financial instruments held by the defined benefit schemes
At 31 December 2020, the scheme assets were invested in a diversified portfolio that consisted primarily of equity and
debt securities. Scheme assets do not include any of Uniphar plc’s own financial instruments, nor any property occupied
by Uniphar plc. The fair value of the scheme assets at the Balance Sheet date are shown as follows:
Equities – Investments in quoted active markets
Bonds – Investments in quoted active markets
Cash
Other
2020
€’000
2,573
6,855
70
2,199
2019
€’000
4,954
15,127
301
2,128
Fair value of the scheme assets
11,697
22,510
158
20 Employee benefit surplus/(obligation) continued
Principal actuarial assumptions at the Balance Sheet date
The main financial assumptions used were:
Rate of increase in pensionable salaries
Rate of increase in pensions in payment
Discount rate
Inflation rate
2020
2019
0.0% - 2.5% 0.0% - 2.5%
0.0%
0.9%
1.4%
0.0%
0.7%
1.2%
Investigations have been carried out within the past three years into the mortality experience of the Group’s major
schemes. These investigations concluded that the current mortality assumptions include sufficient allowance for future
improvements in mortality rates. The assumed life expectations on retirement at age 65 are 21.8 (2019: 21.7) years for
males and 24.2 (2019: 24.1) years for females.
The following amounts at the Balance Sheet dates were measured in accordance with the requirements of IAS 19:
Present value of scheme liabilities
Fair value of scheme assets
2020
€’000
2019
€’000
(11,685)
11,697
(22,555)
22,510
Pension asset/(liability) resulting from employee benefit obligation
12
(45)
The amounts recognised in the Income Statement for the year ended 31 December are as follows:
Charged to operating profit
Current service cost
(Charged)/credited to finance cost
Interest on pension scheme assets
Interest on pension scheme liabilities
Net finance (cost)/income
2020
€’000
2019
€’000
-
(44)
101
(104)
(3)
395
(380)
15
The actual return on scheme assets is a gain of €739,000 (2019: €3,185,000).
The amounts recognised in the Statement of Comprehensive Income for the year ended 31 December are as follows:
Analysis of amount recognised in the Statement of Comprehensive Income
Actual return less amounts included in interest and expense
Experience losses arising on the scheme liabilities
Changes in financial assumptions underlying the present value of the scheme
assets and liabilities
Actuarial gain/(loss) in the year
2020
€’000
638
(94)
2019
€’000
2,790
(228)
(241)
(3,769)
303
(1,207)
159
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 20 Employee benefit surplus/(obligation) continued
Expected contributions for the year ended 31 December 2021 are €227,000.
Movement in scheme assets and liabilities
At 1 January 2019
Current service cost
Employer contributions paid
Interest on scheme liabilities
Interest on scheme assets
Actuarial gain/(loss) in current year
Benefits (paid)/settled
Pension
assets
Pension
liabilities
€’000
€’000
Pension
surplus /
(deficit)
€’000
21,151
-
752
-
395
2,790
(2,578)
(20,712)
(44)
-
(380)
-
(3,997)
2,578
439
(44)
752
(380)
395
(1,207)
-
20 Employee benefit surplus/(obligation) continued
Defined contribution scheme
Included in accruals and other payables is an amount of €346,000 (2019: €294,000) due in relation to the defined
contribution schemes.
Sensitivity of results to actuarial assumptions
Actuarial assumptions used to calculate liabilities are ultimately the responsibility of the Directors of the Group. This
section illustrates the sensitivity of the Group defined benefit pension surplus at 31 December 2020.
The funded status of the pension plans and the amount recognised as a Group asset/(liability) at 31 December 2020 is
compared to the corresponding amount with the assumptions varying as shown in the following table:
Current
Discount
-0.25%
Discount
+0.25%
Inflation
-0.25%
Inflation
+0.25%
Life
expectancy
+1 year
At 31 December 2019
22,510
(22,555)
(45)
Discount rate
Inflation
0.70%
1.20%
0.45%
1.20%
0.95%
1.20%
0.70%
0.95%
0.70%
1.45%
0.70%
1.20%
At 1 January 2020
Settlement loss
Employer contributions paid
Interest on scheme liabilities
Interest on scheme assets
Actuarial gain/(loss) in current year
Benefits (paid)/settled
At 31 December 2020
22,510
-
245
-
101
638
(11,797)
(22,555)
(488)
-
(104)
-
(335)
11,797
11,697
(11,685)
(45)
(488)
245
(104)
101
303
-
12
All of the scheme liabilities arise from schemes that are wholly or partly funded.
The weighted average duration of the defined benefit obligation at 31 December 2020 is approximately 16 years (2019:
approximately 17 years).
Amounts for the current and previous years:
Present value of scheme liabilities
Fair value of scheme assets
Pension asset/(deficit) from employee benefit obligations
Experience losses on scheme liabilities:
Amount (€’000)
Percentage of the present value of the scheme liabilities
Difference between the actual and expected return on scheme assets:
Amount (€’000)
Percentage of scheme assets
2020
€’000
2019
€’000
(11,685)
11,697
(22,555)
22,510
12
(45)
(94)
0.80%
(228)
1.01%
638
5.45%
2,790
12.39%
Surplus/(obligation)
12
(517)
504
219
(196)
(450)
21 Leases
(i) Amounts recognised in the Balance Sheet:
As at 31 December, the Balance Sheet shows the following amounts relating to leases:
GROUP
Right-of-use assets:
Buildings
Plant and equipment
Motor vehicles
Net book value of right-of-use assets
Lease liabilities:
Current
Non-current
Total lease liabilities
2020
€’000
2019
€’000
109,967
927
4,207
87,334
1,054
3,590
115,101
91,978
13,334
107,203
10,083
82,901
120,537
92,984
Right-of-use assets are included in the line ‘Property, plant and equipment’ on the Balance Sheet, and are presented in
note 11.
Additions to the right-of-use assets during the year ended 31 December 2020 were €7,948,000 (2019: €3,464,000).
Lease liabilities are presented separately on the face of the Balance Sheet. The contractual maturity of the lease
liabilities is presented in note 32.
160
161
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 21 Leases continued
22 Trade and other payables
COMPANY
Right-of-use assets:
Buildings
Plant and equipment
Net book value of right-of-use assets
Lease liabilities:
Current
Non-current
Total lease liabilities
2020
€’000
2019
€’000
44,118
237
47,280
55
44,355
47,335
3,377
42,443
3,311
44,633
45,820
47,944
Right-of-use assets are included in the line ‘Property, plant and equipment’ on the Balance Sheet, and are presented in
note 11.
Additions to the right-of-use assets during the year ended 31 December 2020 were €296,000 (2019: €nil).
(ii) Amounts recognised in the Income Statement:
The Income Statement shows the following amounts relating to leases:
GROUP
Buildings
Plant and equipment
Motor vehicles
Right-of-use assets depreciation charge
2020
€’000
7,521
556
2,663
10,740
2019
€’000
6,291
516
2,671
9,478
Interest on lease obligations (note 6)
2,988
2,637
COMPANY
Buildings
Plant and equipment
Right-of-use assets depreciation charge
2020
€’000
3,162
114
3,276
2019
€’000
3,162
98
3,260
Interest on lease obligations
1,398
1,467
GROUP
Trade payables
Accruals
Other payables
Corporation tax
Employment related taxes
Value added tax
Deferred acquisition consideration
2020
€’000
2019
€’000
202,660
110,371
5,909
1,278
4,522
8,002
374
178,746
109,751
7,155
1,064
3,453
4,210
6,849
333,116
311,228
Trade and other payables are payable at various dates in the next three months in accordance with the suppliers’ usual
and customary credit terms.
Taxes are payable at various dates over the coming months in accordance with the applicable statutory provisions.
COMPANY
Amounts owed to subsidiaries
Trade payables
Accruals
Other payables
Employment related taxes
Deferred acquisition consideration
2020
€’000
2019
€’000
270,023
700
6,543
603
326
-
413,836
2,062
3,129
546
497
5,212
278,195
425,282
Amounts owed to subsidiaries are unsecured, interest free and are repayable on demand.
Trade and other payables are payable at various dates in the next three months in accordance with the suppliers’ usual
and customary credit terms.
Taxes are payable at various dates over the coming months in accordance with the applicable statutory provisions.
162
163
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 22 Trade and other payables continued
Other non-current payables
23 Called up share capital continued
Movement in the year in issued share capital presented as equity
2019
€’000
-
545
545
2019
€’000
6,849
545
7,394
2020
€’000
374
4,087
4,461
-
5,212
GROUP
Other non-current payables
Deferred acquisition consideration
2020
€’000
517
4,087
4,604
Deferred acquisition consideration
Total deferred acquisition consideration is payable in the following periods after 31 December in the Group
and Company:
GROUP
» Within one year
» Between one and two years
COMPANY
» Within one year
Deferred acquisition consideration reflects the amounts payable relating to the acquisition of Outico Limited and
Hickey’s Pharmacy Group. During 2020, payments were made in relation to deferred consideration on the acquisition of
the related assets of Outico Limited and on the acquisition of Cahill May Roberts.
23 Called up share capital
GROUP AND COMPANY
Authorised share capital at 31 December:
Ordinary shares of 8c each
“A” ordinary shares of 8c each
Authorised share capital
2020
Number
2019
Number
2020
€’000
2019
€’000
453,205,300 300,000,000
16,000,000
16,000,000
36,256
1,280
24,000
1,280
37,536
25,280
2020
Number
2019
Number
2020
€’000
2019
€’000
Allotted, called up and fully paid ordinary shares of 8c each
At 1 January
Issued during the year
Fully called during the year
273,015,254 112,838,580
- 139,992,116
20,184,558
-
21,841
-
-
9,027
11,199
1,615
At 31 December
273,015,254 273,015,254
21,841
21,841
Allotted, called up and partly paid ordinary shares of 8c each
At 1 January
Issued during the year
Fully called during the year
At 31 December
Total allotted share capital:
At 31 December
-
-
-
-
19,315,951
868,607
(20,184,558)
-
-
-
-
-
386
17
(403)
-
273,015,254 273,015,254
21,841
21,841
Allotted, called up and partly paid shares in 2019 reflect the issuance of shares to the Senior Management Team under
the Uniphar Executive Share Incentive Scheme (note 28).
In May 2020, following the passing of a resolution at the AGM, the authorised share capital of the Company was
increased from €25,280,000 divided into 300,000,000 ordinary shares of 8c each and 16,000,000 “A” ordinary shares
of 8c each, to €37,536,000 divided into 453,205,300 ordinary shares of 8c each and 16,000,000 “A” ordinary shares of
8c each.
In June 2019, following the passing of a resolution at the AGM, the authorised share capital of the Company was
increased from €20,480,000 divided into 240,000,000 ordinary shares of 8c each and 16,000,000 “A” ordinary shares
of 8c each, to €25,280,000 divided into 300,000,000 ordinary shares of 8c each and 16,000,000 “A” ordinary shares of
8c each.
During 2019, the following transactions took place:
»
»
» The conditions for vesting associated with 7,022,318 shares were met and the Company called €0.06 being the
amount unpaid on each share. These shares are now fully paid and the Company received €422,000 in share
proceeds (fully paid shares amounting to €562,000 less amount previously partly paid of €140,000);
In May 2019, 750,000 ordinary shares were issued as partly paid at €0.02 per share under the Uniphar Executive
Share Incentive Scheme;
In June 2019, a further 118,607 ordinary shares were issued as partly paid at €0.02 per share under the Uniphar
Executive Share Incentive Scheme. Collectively, the Company received €17,000 in proceeds associated with both
share issues;
In June 2019, the Company made a call in respect of unpaid share capital, being an amount of €0.06 per share,
on 300,000 issued but not fully paid ordinary shares. These shares while remaining subject to vesting conditions
are now fully paid. The Company received €18,000 as a result of the call, which when aggregated with the €0.02
originally paid up on each of those shares, gives a total paid up amount in respect of those shares of €24,000;
»
164
165
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 23 Called up share capital continued
26 Retained earnings
»
»
»
In July 2019, the Company made a call in respect of unpaid share capital, being an amount of €0.06 per share, on
12,862,240 issued but not fully paid ordinary shares. These shares while remaining subject to vesting conditions
are now fully paid. The Company received €772,000 as a result of the call, which when aggregated with the €0.02
originally paid up on each of those shares, gives a total paid up amount in respect of those shares of €1,029,000;
In July 2019, as part of its admission to trading on the AIM and Euronext Growth markets, the Company issued
117,391,304 ordinary shares of €0.08 each as fully paid at €1.15 per share including share premium. In addition,
following the receipt of a notice of exercise, the Company issued 18,782,808 ordinary shares of €0.08 each at €1.37
per share including share premium in full exercise and conversion of its 2018 issued share warrant; and
In August 2019, as part of the exercising of the over-allotment option attributable to the initial public offering, the
Company issued 3,818,004 ordinary shares of €0.08 each as fully paid at €1.15 per share including share premium.
24 Share premium
GROUP AND COMPANY
Premium arising on shares issued
25 Other reserves
GROUP
Property revaluation reserve
Foreign currency translation reserve
Capital redemption reserve
COMPANY
Capital redemption reserve
Property revaluation reserve
2020
€’000
2019
€’000
176,501
176,501
2020
€’000
700
(1,860)
60
(1,100)
60
60
2019
€’000
700
2,704
60
3,464
60
60
The property revaluation reserve arose on the revaluation of freehold land and buildings. When revalued land and
buildings are sold, the portion of the property revaluation reserve that relates to that asset will be transferred directly to
retained earnings.
Foreign currency translation reserve
The foreign currency translation reserve comprises of all foreign exchange differences arising from the translation of the
net assets of the Group’s non-Euro denominated operations, including the translation of the profits of such operations
from the average exchange rate for the year to the exchange rate at the Balance Sheet date.
Capital redemption reserve
The capital redemption reserve is a legal reserve which has arisen from the Company buying back and cancelling its
ordinary shares in 2013.
GROUP
At 1 January 2019
Profit for the financial year
Other comprehensive expense relating to the financial year
Costs associated with the issue of ordinary share capital
At 31 December 2019
At 1 January 2020
Profit for the financial year
Other comprehensive income relating to the financial year
Dividend paid
Acquisition of non-controlling interest
At 31 December 2020
COMPANY
At 1 January 2019
Profit for the financial year
Costs associated with the issue of ordinary share capital
At 31 December 2019
At 1 January 2020
Profit for the financial year
Dividend paid
At 31 December 2020
27 Non-controlling interests
At 1 January
Acquisition of non-controlling interest
Share of post-acquisition losses
Acquisitions (note 35)
At 31 December
€’000
(31,990)
21,026
(1,056)
(8,581)
(20,601)
(20,601)
27,827
265
(1,993)
(280)
5,218
(6,021)
42,933
(8,581)
28,331
28,331
34,428
(1,993)
60,766
2019
€’000
(180)
-
(105)
-
(285)
2020
€’000
(285)
280
(16)
96
75
Non-controlling interests own the following stakes in the issued ordinary share capital of the entities set out below:
» 25.0% Citywest Healthcare Limited
» 20.0% Dialachemist Limited
» 26.6% IPOS Holding 97 Limited
» 17.7% Innerstrength Limited
» 5.05% Macromed (UK) Limited
» 10.0% Star Medical B.V.
166
167
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 27 Non-controlling interests continued
30 Reconciliation of net cash flow to movement in net bank (debt)/cash
The share of non-controlling interests arising on acquisition relates to Innerstrength Limited which was acquired during
the year.
During 2020, the Group acquired the 30% non-controlling interest of Clinical Pyramid Limited and the 10.7%
non-controlling interest of Outico Limited. The Group now holds 100% of the ordinary share capital of both entities.
On acquisition of the non-controlling interest, the non-controlling interest share of the net assets of €280,000 were
reclassified to retained earnings.
28 Employee share awards
Long-term incentive plan
As set out in note 23, the Company operates a long-term incentive plan for certain Executive Directors and managerial
employees under which shares have been granted subject to vesting conditions linked to the achievement of
demanding Group performance measures and operational targets as well as continued employment with the Group.
The Company can require compulsory transfer of these shares if certain criteria are not met.
As at 31 December 2020, the Company had allotted 13,162,240 ordinary shares (2019: 13,162,240 ordinary shares) of
€0.08 each to members of the Uniphar Executive Directors and managerial employees under the long-term incentive
plan. All shares issued under the long-term incentive plan at 31 December 2020 and 31 December 2019 were called up
and fully paid. These shares remain subject to vesting conditions. No charge to the Income Statement arises in either
2020 or 2019 in respect of this arrangement.
29 Reconciliation of operating profit to cash flow from operating activities
GROUP
Operating profit before operating exceptional items
Cash related exceptional items
Depreciation
Amortisation of intangible assets
Increase in inventory
Decrease/(increase) in receivables
Increase in payables
Foreign currency translation adjustments
Cash inflow from operating activities
COMPANY
Operating profit before operating exceptional items
Cash related exceptional items
Depreciation
Decrease/(increase) in receivables
(Decrease)/increase in payables
Foreign currency translation adjustments
Cash outflow from operating activities
2020
€’000
2019
€’000
46,719
(10,761)
35,958
17,626
2,368
(11,868)
8,789
13,554
(56)
40,250
(7,075)
33,175
15,911
2,394
(14,889)
(17,656)
30,424
207
66,371
49,566
41,371
(4,178)
37,193
3,276
68,073
(141,801)
(1,069)
54,363
(3,868)
50,495
3,260
(114,906)
28,652
598
(34,328)
(31,901)
GROUP
(Decrease)/increase in cash and overdrafts in the year
Movement in restricted cash (note 31)
Cash flow from movement in borrowings (note 31)
(Decrease)/increase in net debt resulting from cash flows
Debt acquired during the year (note 31)
Restricted cash acquired during the year (note 31)
Foreign currency translation on cash and cash equivalents
Movement in net bank (debt)/cash in the year
Net bank cash/(debt) at beginning of year
2020
€’000
2019
€’000
(53,063)
(72)
8,434
(44,701)
(16,800)
1,027
(567)
(61,041)
26,622
103,501
(210)
76,211
179,502
-
-
-
179,502
(152,880)
Net bank (debt)/cash at end of year
(34,419)
26,622
COMPANY
(Decrease)/increase in cash and overdrafts in the year (note 31)
Movement in restricted cash (note 31)
Cash flow from movement in borrowings (note 31)
(Decrease)/increase in net bank debt resulting from cash flows
Movement in net bank (debt)/cash in the year
Net bank debt at beginning of year
Net bank debt at end of year
31 Analysis of changes in net debt
(64,094)
(42)
(12,713)
59,995
-
6,217
(76,849)
66,212
(76,849)
(13,153)
66,212
(79,365)
(90,002)
(13,153)
GROUP
Cash and cash equivalents
Restricted cash
Cash
Bank loans repayable within one year
Bank loans repayable after one year
Bank loans
Net bank cash/(debt)
Current lease obligations
Non-current lease obligations
Lease obligations
Net debt
1 January
2020
Cash
flow
Acquisitions
(note 35)
31 December
2020
€’000
€’000
€’000
€’000
114,040
2,142
(61,319)
(72)
116,182
(61,391)
7,689
1,027
8,716
60,410
3,097
63,507
(22,583)
(66,977)
37,072
(28,638)
(16,800)
-
(2,311)
(95,615)
(89,560)
8,434
(16,800)
(97,926)
26,622
(52,957)
(8,084)
(34,419)
(10,083)
(82,901)
1,244
1,258
(4,495)
(25,560)
(13,334)
(107,203)
(92,984)
2,502
(30,055)
(120,537)
(66,362)
(50,455)
(38,139)
(154,956)
168
169
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 31 Analysis of changes in net debt continued
31 Analysis of changes in net debt continued
GROUP
Cash and cash equivalents
Restricted cash
Cash
Bank loans repayable within one year
Bank loans repayable after one year
Bank loans
Net bank (debt)/cash
Current lease obligations
Non-current lease obligations
Lease obligations
Net debt
COMPANY
Cash and cash equivalents
Restricted cash
Cash
Bank loans repayable within one year
Bank loans repayable after one year
Bank loans
Net bank debt
Current lease obligations
Non-current lease obligations
Lease obligations
Net debt
1 January
2019
€’000
Cash
flow
€’000
Acquisitions 31 December
2019
€’000
€’000
10,539
2,352
96,641
(210)
12,891
96,431
(81,753)
(84,018)
59,170
17,041
(165,771)
76,211
6,860
-
6,860
-
-
-
114,040
2,142
116,182
(22,583)
(66,977)
(89,560)
(152,880)
172,642
6,860
26,622
(6,245)
(74,618)
(1,977)
6,734
(1,861)
(15,017)
(10,083)
(82,901)
(80,863)
4,757
(16,878)
(92,984)
(233,743)
177,399
(10,018)
(66,362)
1 January
2020
€’000
Cash
flow
€’000
31 December
2020
€’000
67,328
2,142
(64,094)
(42)
69,470
(64,136)
3,234
2,100
5,334
(16,827)
(65,796)
16,827
(29,540)
-
(95,336)
(82,623)
(12,713)
(95,336)
(13,153)
(76,849)
(90,002)
(3,311)
(44,633)
(47,944)
(66)
2,190
2,124
(3,377)
(42,443)
(45,820)
(61,097)
(74,725)
(135,822)
COMPANY
Cash and cash equivalents
Restricted cash
Cash
Bank loans repayable within one year
Bank loans repayable after one year
Bank loans
Net bank debt
Current lease obligations
Non-current lease obligations
Lease obligations
Net debt
32 Financial instruments
Financial instruments by category
1 January
2019
€’000
Cash
flow
€’000
31 December
2019
€’000
7,333
2,142
9,475
59,995
-
67,328
2,142
59,995
69,470
(6,218)
(82,622)
(10,609)
16,826
(16,827)
(65,796)
(88,840)
6,217
(82,623)
(79,365)
66,212
(13,153)
(3,820)
(46,425)
509
1,792
(3,311)
(44,633)
(50,245)
2,301
(47,944)
(129,610)
68,513
(61,097)
The accounting policies for financial instruments have been applied to the line items below:
Financial assets
2020
Investments in equity instruments
Trade and other receivables **
Deferred consideration receivable
Cash and cash equivalents
Restricted cash
2019
Investments in equity instruments
Trade and other receivables **
Deferred consideration receivable
Cash and cash equivalents
Restricted cash
Financial
assets at
FVOCI*
Notes
€’000
Financial
assets at
amortised
cost
€’000
Total
€’000
12
16
16
17
17
12
16
16
17
17
25
-
-
-
-
25
25
-
-
-
-
25
-
117,843
633
60,410
3,097
25
117,843
633
60,410
3,097
181,983
182,008
-
127,357
895
114,040
2,142
25
127,357
895
114,040
2,142
244,434
244,459
170
171
* Fair value through other comprehensive income. ** Excluding prepayments and accrued income.
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 32 Financial instruments continued
Financial liabilities
2020
Borrowings
Deferred acquisition consideration
Trade and other payables **
Deferred contingent consideration
Lease liabilities
2019
Borrowings
Deferred acquisition consideration
Trade and other payables **
Facility termination fee
Deferred contingent consideration
Lease liabilities
Financial
liabilities at
FVTPL*
Notes
€’000
Financial
liabilities at
amortised
cost
€’000
Total
€’000
18
22
22
19
21
18
22
22
19
21
-
-
-
81,164
-
81,164
-
-
-
5,000
80,811
-
85,811
97,926
4,461
208,569
-
120,537
97,926
4,461
208,569
81,164
120,537
431,493
512,657
89,560
7,394
185,901
-
-
92,984
89,560
7,394
185,901
5,000
80,811
92,984
375,839
461,650
* Fair value through profit and loss. ** Excluding non-financial liabilities.
Fair value
The following table sets out the fair value of the Group’s principal financial assets and liabilities.
2020
Carrying
value
€’000
2020
Fair value
€’000
2019
Carrying
value
€’000
2019
Fair value
€’000
Notes
12
16
16
17
17
18
22
22
19
21
25
117,843
633
60,410
3,097
25
117,894
654
60,410
3,097
25
127,357
895
114,040
2,142
25
127,420
1,093
114,040
2,142
182,008
182,080
244,459
244,720
97,926
4,461
208,569
-
81,164
120,537
105,708
4,625
208,569
-
81,164
120,537
89,560
7,394
185,901
5,000
80,811
92,984
96,308
7,452
185,901
5,000
80,811
92,984
512,657
520,603
461,650
468,456
Financial assets
Investments in equity instruments
Trade and other receivables
Deferred consideration receivable
Cash and cash equivalents
Restricted cash
Financial liabilities
Borrowings
Deferred acquisition consideration
Trade and other payables
Facility termination fee
Deferred contingent consideration
Lease liabilities
172
32 Financial instruments continued
Measurement of fair values
In the preparation of the financial statements, the Group finance department, which reports directly to the Chief
Financial Officer (CFO), reviews and determines the major methods and assumptions used in estimating the fair values
of the financial assets and liabilities which are set out below:
Investments in equity instruments
Investments in equity instruments are measured at fair value through other comprehensive income (FVOCI).
Long-term receivables
The fair value of long-term receivables is determined by discounting future cash flows at market rates of interest at the
period end.
Trade and other receivables/trade and other payables
For receivables and payables with a remaining life of less than 12 months or demand balances, the carrying value less
impairment provision where appropriate, is deemed to reflect fair value.
Cash and cash equivalents, including short-term bank deposits
For short term bank deposits and cash and cash equivalents, all of which have a remaining maturity of less than three
months, the carrying amount is deemed to reflect fair value.
Interest-bearing loans and borrowings
For floating rate interest-bearing loans and borrowings with a contractual repricing date of less than 6 months, the
nominal amount is deemed to reflect fair value. For loans with repricing dates of greater than 6 months, the fair value is
calculated based on the present value of the expected future principal and interest cash flows discounted at appropriate
market interest rates (level 2) effective at the Balance Sheet date and adjusted for movements in credit spreads.
Deferred acquisition consideration
Discounted cash flow method was used to capture the present value of the expected future economic benefits that will
flow out of the Group arising from the deferred acquisition consideration.
Deferred contingent consideration
The fair value of the deferred contingent consideration is calculated by discounting the expected future payment to the
present value. The expected future payment represents the deferred contingent acquisition consideration which would
become payable based on pre-defined profit thresholds being met and is calculated based on management’s best
estimates of the expected future cash outflows using current budget forecasts. The provision for deferred contingent
consideration is principally in respect of acquisitions completed from 2015 to 2020. A maturity analysis of the deferred
contingent consideration on an undiscounted basis is presented on page 178.
The significant unobservable inputs are:
» Expected future profit forecasts which have not been disclosed due to their commercial sensitivities; and
» Risk adjusted discount rate of between 2% and 3% (2019: 3%)
The estimated fair value would increase/(decrease) if the:
» Expected future profit forecasts were higher/(lower); and
» Risk adjusted discount rate was lower/(higher).
For the fair value of deferred contingent consideration, a 1% increase in the risk adjusted discount rate at 31 December
2020, holding the other inputs constant would reduce the fair value of the deferred contingent consideration by €1.6m.
A 1% decrease in the risk adjusted discount rate would result in an increase of €1.6m in the fair value of the deferred
contingent consideration.
173
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 32 Financial instruments continued
32 Financial instruments continued
Facility termination fee
As part of the funding of the acquisition of Cahill May Roberts in 2013, a share warrant was issued to participating
banks, granting the right to subscribe for 10% of the entire fully diluted issued share capital of the Company at the
time of subscription, at any time up until 30 June 2017. During 2017, the share warrant holders surrendered all of their
equity rights in return for an agreed facility termination fee payable by the Company of €10,000,000. In January 2020,
a payment of €5,000,000 was made in final settlement of the facility termination fee. At 31 December 2019, the facility
termination fee had a carrying value and respective fair value of €5,000,000.
Fair value hierarchy
The following table sets out the fair value hierarchy for financial instruments which are measured at fair value.
Level 1
€’000
Level 2
€’000
Level 3
€’000
Total
€’000
Recurring fair value measurements
At 31 December 2020
Investments in equity instruments
Deferred contingent consideration
At 31 December 2019
Investments in equity instruments
Facility termination fee
Deferred contingent consideration
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25
(81,164)
25
(81,164)
(81,139)
(81,139)
25
(5,000)
(80,811)
25
(5,000)
(80,811)
(85,786)
(85,786)
There were no transfers between the fair value levels for recurring fair value measurements during the year. The
Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the
reporting period.
Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the end of
the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These
instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the years ended 31 December 2020 and
31 December 2019:
Shares in
unlisted
companies
€’000
Facility
termination
fee
€’000
Deferred
contingent
consideration
€’000
Derivative
financial
instruments
€’000
Total
€’000
At 1 January 2019
Payments
Exercise of share warrant
Unwinding of discount*
Arising on acquisition
Reclassification
Release*
Foreign currency
At 31 December 2019
Payments
Charge to Income Statement*
Unwinding of discount*
Arising on acquisition
Release*
Foreign currency
25
-
-
-
-
-
-
-
25
-
-
-
-
-
-
(7,622)
2,500
-
122
-
-
-
-
(51,811)
1,237
-
(1,939)
(33,966)
1,752
5,836
(1,920)
(27,586)
-
25,821
-
-
-
1,765
-
(5,000)
(80,811)
5,000
-
-
-
-
-
28,491
(1,896)
(2,026)
(31,777)
4,348
2,507
(86,994)
3,737
25,821
(1,817)
(33,966)
1,752
7,601
(1,920)
(85,786)
33,491
(1,896)
(2,026)
(31,777)
4,348
2,507
(81,139)
-
-
-
-
-
-
-
-
At 31 December 2020
25
-
(81,164)
* These amounts have been credited/(charged) to the Income Statement in finance income/costs.
Financial risk management
The Group’s operations expose it to various financial risks. The Group has a risk management framework in place
which seeks to limit the impact of these risks on the financial performance of the Group and it is the Group’s policy to
manage these risks in a non-speculative manner.
The Group has exposure to the following risks from its use of financial instruments: credit risk, liquidity risk, currency
risk, interest rate risk and price risk. This note presents information about the Group’s exposure to each of the above
risks and the Group’s objectives, policies and processes for measuring and managing the risk. Further quantitative
disclosures are included throughout this note.
The Group’s risk management is carried out by a central finance department under policies approved by the Board
of Directors. Group finance identifies, evaluates and manages financial risks in close co-operation with the Group’s
operating units. The Board approves written principles for overall risk management, as well as policies covering
specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and
non-derivative financial instruments and the investment of excess liquidity.
174
175
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 32 Financial instruments continued
Credit risk
Credit risk arises from credit to customers, loans to customers, loans to IPOS entities, loans to retail holding companies,
deferred consideration receivable, restricted cash as well as cash and cash equivalents including deposits with banks and
financial institutions.
The Group manages credit risk through the use of credit limits for customers, regular review of the ageing of trade and
other receivables, and the review and monitoring of customer and bank credit ratings.
Trade receivables
Credit risk arising in the context of the Group’s operations is not significant with the provision for impairment at the
Balance Sheet date amounting to 4.2% of gross trade receivables (2019: 3.2%). The Group accounts for its credit risk by
appropriately providing for expected credit losses on a timely basis. In calculating the expected credit loss rates, the company
considers historical loss rates for each category of customers and adjusts for forward looking macroeconomic data.
Customer credit risk is managed at appropriate Group locations according to established policies, procedures and
controls. Customer credit quality is assessed in line with strict credit rating criteria and credit limits are established
where appropriate. Outstanding customer balances are regularly monitored and a review for indicators of impairment
(evidence of financial difficulty of the customer, payment default, breach of contract etc.) is carried out at each reporting
date. Individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly.
The other receivables are assessed collectively to determine whether there is objective evidence that an impairment
has been incurred but not yet identified. For these receivables the estimated impairment losses are recognised in a
separate provision for impairment.
The Group considers that there is evidence of impairment if any of the following indicators are present:
» significant financial difficulties of the receivable;
» probability that the receivable will enter bankruptcy or financial reorganisation; and
» default or delinquency in payments (more than 30 days overdue).
Receivables for which an impairment provision was recognised are written off against the provision when there is no
expectation of recovering additional cash.
Impairment losses are recognised in the Income Statement within selling and distribution costs. Subsequent recoveries of
amounts previously written off are credited against selling and distribution costs where the initial impairment was recorded.
Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are as follows:
At 1 January
Provision for impairment recognised during the year
Arising on acquisition
Receivables written off during the year as uncollectible
Recovery of balances previously provided for
Reclassification
Foreign currency translation
At 31 December
2020
€’000
3,930
1,800
-
(895)
-
(3)
(26)
4,806
2019
€’000
3,548
233
189
(11)
(60)
12
19
3,930
The trade receivables balances disclosed in note 16 comprise of a large number of customers spread across the
Group’s activities and geographies with balances classified as “not past due” representing 86.5% of the total trade
receivables balance at the Balance Sheet date (2019: 87.4%). Invoice discounting arrangements are employed in
certain of the Group’s operations where deemed to be of benefit by management.
176
32 Financial instruments continued
In December 2019, the Group entered into a receivables purchase arrangement with two of its banking partners. Under
the terms of this non-recourse agreement, the Group has transferred substantially all credit risk and control of certain
trade receivables. In July 2020, the non-recourse financing arrangement increased by an additional €14,118,000 with
the total amount of the facility being €94,118,000 (2019: €80,000,000). The Group has recognised an asset within
trade and other receivables of €14,118,000 (2019: €12,000,000), being the fair value of the amount receivable from
the financial institutions, representing 15% of the trade receivables transferred to the financial institutions in accordance
with the terms of the receivables purchase arrangement. The execution of this agreement resulted in an operating
cash inflow of €12,000,000 (2019: €68,000,000) for the Group during the year ended 31 December 2020. Total
interest expense associated with this receivables purchase agreement during the year ended 31 December 2020 was
€1,203,000 (2019: €31,000).
The ageing of trade receivables at 31 December 2020 and 2019 was:
Not past due
Past due
0 - 30 days
30 - 60 days
60 days
Total past due
Total trade receivables
2020
€’000
2019
€’000
93,946
103,856
10,973
2,669
1,041
10,593
1,895
2,426
14,683
14,914
108,629
118,770
Provision for impairment in long-term receivables is outlined in note 12.
Cash and cash equivalents
Cash and cash equivalents give rise to credit risk on amounts due from counterparty financial institutions (stemming
from their insolvency or a downgrade in their credit ratings). Credit risk is managed by the regular review of the
credit ratings of these financial institutions and limiting the aggregate amount and duration of exposure to any one
counterparty primarily depending on its credit rating. All the Group’s cash and cash equivalents are currently held with
financial institutions which have investment grade credit ratings ranging from A-1 to A-2 (2019: A-1 to A-2).
Other financial assets
The Group has investments in companies with a strategic interest to the Group which are of a non-speculative nature.
The investments and any impairment provisions are outlined in note 12.
The carrying amount of financial assets, net of impairment provisions represents the Group’s maximum credit exposure.
The maximum exposure to credit risk at year end was as follows:
Trade and other receivables*
Deferred consideration receivable
Cash and cash equivalents
Restricted cash
Total
* Excluding prepayments and accrued income
2020
€’000
2019
€’000
117,843
633
60,410
3,097
127,357
895
114,040
2,142
181,983
244,434
177
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 32 Financial instruments continued
Liquidity risk
The Group manages liquidity risk through, maintaining sufficient cash and cash equivalents to meet obligations when
due, credit facilities and overdraft facilities, monitoring and managing the maturity of borrowings, regular review of the
ageing of trade and other receivables, and review and monitoring of customer and bank credit ratings.
Management monitors forecasts of the maturity of the Group’s borrowings and other obligations. Management forecasts
cash flows expected to settle the Group’s obligations and actively monitors the level of cash and facilities available to
settle the Group’s obligations as they fall due. Forecasts of cash flows to settle trade and other payables are generally
carried out at a subsidiary level in the operating companies of the Group in accordance with practice and limits set up
by the Group.
The following table outlines the undiscounted contractual maturities of the Group’s financial liabilities at the Balance
Sheet date. The undiscounted cash flows differ from the amount included in the Balance Sheet because the Balance
Sheet amount is based on the discounted cash flows.
Contractual maturity of financial liabilities
At 31 December 2020
Borrowings
Deferred acquisition consideration
Deferred contingent consideration
Lease liabilities
Trade and other payables
Less
than 6
months
€’000
6 to 12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
€’000
€’000
€’000
€’000
Total
contractual
cash flows
€’000
2,375
373
-
71
6,412 20,351
7,534
7,956
-
208,569
204
4,017
24,693
13,983
-
-
103,129
-
-
33,799
-
35,165 81,533
-
-
105,708
4,461
85,255
146,171
208,569
225,685 27,956
42,897
172,093 81,533
550,164
At 31 December 2019
Borrowings
Deferred acquisition consideration
Deferred contingent consideration
Facility termination fee
Lease liabilities
Trade and other payables
8,466 14,500
-
6,865
4,803 28,854
-
5,000
5,353
5,627
-
185,901
14,539
587
21,776
-
9,842
-
57,842
-
29,453
-
584
-
-
-
23,516 67,738
-
-
95,931
7,452
84,886
5,000
112,076
185,901
32 Financial instruments continued
Currency risk
The Group primarily operates in the Republic of Ireland and the majority of the Group’s activities are conducted in
Euro. Elements of the Group’s operations are carried out in the UK, Europe and the US and, as a result, the Group is
exposed to structural currency fluctuations in respect of Sterling, Swedish Krona and the US Dollar. To the extent that
the non-Euro denominated assets and liabilities of the Group do not offset, the Group is exposed to structural currency
risk. Such movements are reported through the Group Statement of Comprehensive Income.
The Euro is the principal currency of the Group’s Irish and Benelux businesses, Sterling is the principal currency of
the Group’s UK businesses, the Swedish Krona is the principal currency of our Nordic businesses, and the US Dollar
is the principal currency of our US businesses. The Group actively monitors the level of foreign exchange exposure
and ensures that its net exposure is kept at an acceptable level. Currency risks are regularly monitored and managed
by utilising spot and forward foreign currency contracts as appropriate for settling liabilities arising from the purchase
of goods for resale in non-functional currencies. The majority of transactions entered into by Group entities are
denominated in functional currencies and no significant level of hedging is required.
Currency Risk Sensitivity Analysis
The following table demonstrates the sensitivity of profit after tax and total equity to movements in the GBP/USD/SEK
exchange rate with all other variables held constant:
+/- 5% change in GBP/USD/SEK Exchange rates
Impact on profit after tax *
Impact on total equity **
2020
€’000
(669)
1,747
2019
€’000
(339)
2,579
* The impact on profit after tax is based on changing the GBP/USD/SEK exchange rate used in calculating profit after
tax for the year.
** The impact on total equity is calculated by changing the GBP/USD/SEK exchange rate used in measuring the closing
balance sheet plus the impact to profit after tax for the period.
Interest rate risk
The Group has no fixed rate borrowings and its receivables are carried at amortised cost. At 31 December 2020, the
Group’s revolving credit facility (RCF) is subject to an interest rate charge based on Euribor (zero floor in operation)
+1.5%. Interest charged on the RCF is subject to change based on the Group’s leverage ratio.
Invoice discounting and non-recourse facility are subject to interest rate charges based on Prime/Euribor +1.75%.
216,662 48,707
46,744
110,811 68,322
491,246
Borrowings maturing within less than 6 months include an invoice discounting facility of €nil at the end of the year
(2019: €1,505,000).
Variable rate borrowings (note 18)
2020
€’000
2019
€’000
97,926
89,560
Lender covenants
The Group entered into a new banking facility on 2 July 2020. Under this facility the Group are subject to two covenants:
leverage ratio and interest cover. Banking covenants are subject to bi-annual review, and during 2020 all covenants
have been fully complied with.
A decrease of fifty basis points in the Euribor interest rate would have reduced interest payable on borrowings in finance
costs by €495,000 and consequently increased our profit before tax and equity. An increase of fifty basis points would
have increased interest payable on borrowings in finance costs and consequently reduced our profit before tax and
equity by an equal and opposite amount.
Price risk
The Group’s exposure to equity price risk arises from investments held by the Group and classified in the Balance
Sheet as investments in equity instruments. The investments in equity instruments are measured at fair value through
OCI. The Group is exposed to the risk of an illiquid market for unlisted companies as these investments are not traded
on an active market.
178
179
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 32 Financial instruments continued
Capital management
The Group’s objectives when managing capital are to:
» safeguard their ability to continue as a going concern and to continue to provide a return for shareholders; and
» maintain an optimal capital structure and reduce the overall cost of capital.
In managing its capital structure, the Group’s capital consists of total equity and net bank debt. The Board monitor the
return on capital employed and dividend policy in order to optimise shareholder value while allowing the Group to take
advantage of opportunities that might arise to grow the business and to sustain the ongoing development of the Group.
At the year end, the Group was in a net bank debt position of €34,419,000 (2019: net bank cash of €26,622,000). Total
equity of the Group at 31 December 2020 was €202,535,000 (2019: €180,920,000). The Directors periodically review
the capital structure of the Group, considering the cost of capital and the associated risks.
33 Future capital expenditure not provided for
At 31 December 2020, the Group had capital commitments of €3,268,000 (2019: €1,478,000)
Contracted for
Computer software
Plant and equipment
Fixtures and fittings
34 Contingent liabilities
Subsidiaries
2020
€’000
835
2,029
404
3,268
2019
€’000
957
521
-
1,478
Pursuant to the provisions of Section 357, Companies Act 2014, the Company have put in force in respect of the whole
of the financial year ended 31 December 2020 an irrevocable guarantee of all commitments entered into by a subsidiary
including amounts shown as liabilities in the statutory financial statements of the relevant subsidiary. The list of relevant
subsidiaries is as follows: Uniphar Wholesale Limited, Allphar Services Limited, Unisource Pharma Services Ireland
Limited, Allcare Management Services Limited, Point of Care Health Services Limited, Lindchem Designated Activity
Company, Trennamally Limited, Cahill May Roberts Limited, Life Pharmacy Limited, Uniphar Europe Limited, M3
Medical Limited, Pagni Pharmacies Limited and Pyramach Limited.
Guarantees
The Company and certain subsidiaries have issued guarantees capped at a total of €342,000 (2019: €701,000) in
respect of bank borrowings undertaken by IPOS scheme entities and past customers of Cahill May Roberts Limited.
The outstanding bank borrowing at the Balance Sheet date, for which these guarantees have been provided, give rise
to a contingent liability of €342,000 (2019: €372,000) for the Group.
From a Company perspective, the contingent liability at year end is €nil (2019: €nil).
The change in the level of contingent liabilities is due to movement in underlying loan balances.
Legal
From time to time, in the normal course of business, the Group can be subject to claims from various parties. Having
considered the status of such matters as at 31 December 2020, the Directors are satisfied that there are no such
matters which require either a provision or contingent liability disclosure in the financial statements.
35 Acquisitions of subsidiary undertakings and business assets
A key strategy of the Group is to expand into higher growth and higher margin sectors and businesses. In line with this
strategy, the Group completed the following acquisitions during the financial year:
Innerstrength Limited
The Group acquired an 82.3% controlling interest of the issued share capital of Innerstrength Limited in March 2020
for consideration of €2,675,000, of which €1,685,000 is deferred and contingent on agreed targets being met and
the exercise of the put and call option over the non-controlling interest. Innerstrength Limited operates in Ireland,
in the technology market, enabling healthcare professionals to deliver personalised education to patients who are
currently living with chronic conditions.
Marie O’Brien Limited
The Group acquired 100% of the issued share capital of Marie O’Brien Limited, in July 2020 for consideration of
€1,377,000 of which €166,000 is deferred. Marie O’Brien Limited currently operates as an independent retail
pharmacy in Ireland.
Diligent Health Solutions, LLC
The Group acquired 100% of the membership interests of Diligent Health Solutions, LLC in September 2020 for
consideration of €21,142,000 of which €13,813,000 is deferred and contingent on agreed targets being met.
Diligent Health Solutions, LLC is a US-based healthcare communications provider.
Bunclody Pharmacy Limited
The Group acquired 100% of the issued share capital of Bunclody Pharmacy Limited, in September 2020 for
consideration of €819,000. Bunclody Pharmacy Limited currently operates as an independent retail pharmacy
in Ireland.
Hickey’s Pharmacy Group
The Group acquired 100% of the ordinary share capital of Drishlawn Group Holdings Limited, incorporated in the
Isle of Man and Hickey’s Pharmacy Group Holdings Limited incorporated in Ireland in November 2020, which are
collectively the holding companies of the Hickey’s Pharmacy Group for consideration of €43,556,000, of which
€3,652,000 is deferred consideration.
RRD International, LLC
The Group acquired 100% of the membership interests of RRD International, LLC in November 2020 for
consideration of €21,553,000, of which €16,279,000 is deferred and contingent on agreed targets being met. RRD
International, LLC is a US-based pharmaceutical advisory group providing outsourced strategic consulting and
execution services throughout the early stages of product development.
Goodwill is attributable to the future economic benefits arising from assets which are not capable of being individually
identified and separately recognised. The significant factors giving rise to the goodwill include the value of the teams
within the businesses acquired, the enhancement of the competitive position of the Group in the marketplace and the
strategic premium paid by the Uniphar Group to create the combined Group.
The fair value of the deferred and contingent consideration recognised at the date of acquisition is calculated by discounting
the expected future payment to present value at the acquisition date. In general, for deferred contingent consideration to
become payable, pre-defined profit thresholds must be exceeded. On an undiscounted basis, the future payments for which
the Group may be liable in respect of acquisitions completed in the current year range from €4.0m to €64.4m.
The initial assignment of fair values to net assets acquired has been performed on a provisional basis in respect of
the acquisitions completed during 2020, due to their recent acquisition dates. Separate identifiable intangible assets
were identified in the initial assessment of the fair value of the net assets acquired for Hickey’s Pharmacy Group and
Innerstrength Limited. The Group has 12 months from the date of acquisition to finalise the fair value of the assets/
liabilities acquired, and any amendments to these fair values within the twelve-month period from the date of acquisition
will be disclosable in the 2021 Annual Report as stipulated by IFRS 3, Business Combinations.
180
181
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 35 Acquisitions of subsidiary undertakings and business assets continued
The acquisitions completed in 2020 have contributed €10.0m to revenue and €4.5m of gross profit for the period since
the date of acquisition. The proforma revenue and operating profit for the Group for the year ended 31 December 2020
would have been €1,895m and €46.1m respectively had the acquisitions been completed at the start of the current
reporting period.
35 Acquisitions of subsidiary undertakings and business assets continued
The gross contractual value of the trade and other receivables as at the respective dates of acquisition amounted to
€10.3m. The fair value of these receivables is estimated at €10.3m (all of which is expected to be recoverable).
In 2020, the Group incurred acquisition costs of €4.3m (2019: €5.0m). These have been included in administrative
expenses in the Group Income Statement.
The provisional fair value of the assets and liabilities acquired as part of the acquisitions completed during the financial
year are set out below:
2019 Acquisitions
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Inventory
Trade and other receivables
Restricted cash
Cash and cash equivalents
Total assets
LIABILITIES
Non-current liabilities
Lease liabilities
Other non-current liabilities
Provisions
Deferred tax liabilities
Current liabilities
Lease liabilities
Bank borrowings
Trade and other payables
Total liabilities
Identifiable net assets/(liabilities) acquired
Non-controlling interest arising on acquisition
Group share of net assets/(liabilities) acquired
Goodwill arising on acquisition
Consideration
Hickey’s
€’000
Others
€’000
Total
€’000
11,238
28,539
39,777
5,832
5,509
-
5,928
17,269
57,046
24,223
-
360
697
25,280
3,847
16,800
12,379
33,026
58,306
(1,260)
-
(1,260)
44,816
43,556
723
2,397
3,120
181
4,765
1,027
1,761
7,734
10,854
1,337
536
-
-
1,873
648
-
6,690
7,338
9,211
1,643
(96)
1,547
11,961
30,936
42,897
6,013
10,274
1,027
7,689
25,003
67,900
25,560
536
360
697
27,153
4,495
16,800
19,069
40,364
67,517
383
(96)
287
46,019
47,566
90,835
91,122
The initial assessment of the fair values of the major classes of assets acquired and liabilities assumed in respect of
the acquisitions which were completed in 2019 was performed on a provisional basis. The fair values attributable to the
assets and liabilities of these acquisitions have now been finalised. The amendments to these fair values were made
to the comparative figures during the subsequent reporting window within the measurement period imposed by IFRS 3.
The provisional fair value of these assets and liabilities recorded at 31 December 2019, together with the adjustments
made to those carrying values to arrive at the final fair values were as follows:
ASSETS
Non-current assets
Property, plant and equipment
Deferred tax asset
Current assets
Assets held for sale
Inventory
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Non-current liabilities
Lease liabilities
Deferred tax liabilities
Current liabilities
Lease liabilities
Trade and other payables
Total liabilities
Durbin
€’000
Others Provisional fair
value of 2019
acquisitions
€’000
€’000
Measurement
period
adjustments
€’000
Total
€’000
7,022
34
14,872
-
7,056
14,872
-
2,916
7,278
2,485
4,400
4,230
5,666
4,375
12,679
18,671
19,735
33,543
571
9
580
1,289
1,452
2,741
2,894
8,768
12,123
9,335
11,662
21,458
12,242
24,199
21,894
34
21,928
4,400
7,146
12,944
6,860
31,350
53,278
1,860
1,461
3,321
15,017
18,103
33,120
36,441
-
-
-
-
(421)
141
-
21,894
34
21,928
4,400
6,725
13,085
6,860
(280)
31,070
(280)
52,998
-
296
296
-
728
728
1,860
1,757
3,617
15,017
18,831
33,848
1,024
37,465
The acquisition of Hickey’s Pharmacy Group has been determined to be a substantial transaction and separate
disclosure of the fair values of the identifiable assets and liabilities has therefore been made. None of the remaining
business combinations completed during the period were considered sufficiently material to warrant separate disclosure
of the fair values attributable to those combinations.
Identifiable net assets acquired
7,493
9,344
16,837
(1,304)
15,533
Goodwill arising on acquisition
Consideration
34,350
32,720
41,843
42,064
67,070
83,907
1,817
68,887
513
84,420
182
183
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 36 Related party transactions
In the ordinary course of business as pharmacists, certain Non-Executive Directors of Uniphar plc have traded on
standard commercial terms with the Group. The individual and combined value of these transactions are not material in
the context of the Group’s financial results.
lAS 24 Related Party Disclosures requires the disclosure of compensation paid to the Group’s key management
personnel. Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the Group. The Group classifies members of its executive team as key management
personnel. The executive team is the body of senior executives that formulates business strategy with the Directors,
follows through on implementation of that strategy and directs and controls the activities of the Group on a day to
day basis.
The executive team consists of three Executive Directors (2019: three), seven Non-Executive Directors (2019: nine),
and an additional six (2019: four) individual members at 31 December 2020.
Remuneration of key management personnel
Short term employee benefits (including redundancy)
Post-employment benefits
2020
€’000
6,476
133
6,609
2019
€’000
5,344
605
5,949
37 Group companies
Holding company
Uniphar plc
Principal activity
Investment holding company
The following are the significant subsidiary undertakings of Uniphar plc at 31 December 2020:
Subsidiary name
Allcare Management Services Limited *
Allphar Services Limited *
Cahill May Roberts Limited *
Lindchem Designated Activity Company *
M3 Medical Limited*
Pagni Pharmacies Limited *
Point of Care Health Services Limited *
Pyramach Limited*
Sisk Healthcare Unlimited Company
Trennamally Limited *
Uniphar Durbin Ireland Limited
Uniphar Europe Limited *
Uniphar Wholesale Limited *
Unisource Pharma Services Ireland Limited *
Innerstrength Limited
Clinical Cube Limited
Clinical Pyramid Limited
Dialachemist Limited
Durbin plc
Macromed (UK) Limited
Outcome Medical Solutions Limited
Outico Limited
Sisk Healthcare (UK) Limited
Star Outico Limited
Star Medical Limited
Unisource Limited
EPS Vascular OY
EP Endovascular AB
EPS Vascular AB
Incorporated
and trading in
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Finland
Sweden
Sweden
The Netherlands Angiocare B.V.
The Netherlands Star Medical B.V.
Uniphar USA, Inc.
US
Uniphar PA USA, LLC
US
Uniphar C&C USA, LLC
US
Durbin Inc.
US
Pharmaceutical Trade Services Inc.
US
Diligent Health Solutions, LLC
US
RRD International, LLC
US
Principle Activity
Pharmacy holding company
Specialist nursing and infusion services
Pharmacy holding company
Pharmacy support services
Pharmaceutical supply chain and services
Non-trading property holding company
Pharmacy holding company
Ownership
%**
100
100
100
100
100 Medical device distribution
100
100
100
100 Medical device distribution
100
100
100
100
100
82.3
100
100
80.0
100
Pharmacy holding company
Specialist provider of pharmaceuticals
Investment holding company
Pharmaceutical wholesale distributor
Outsourcing and resourcing
Health technology
Data solutions for pharma industry
Investment holding company
Online pharmacy and product fostering
Specialist provider of pharmaceuticals
94.95 Medical device distribution
Investment holding company
Data intelligence and consultancy
Outsourcing and resourcing
Outsourcing and resourcing
Investment holding company
100
100
100 Medical device distribution
100
100
100
100 Medical device distribution
100 Medical device distribution
100 Medical device distribution
100 Medical device distribution
90.0
100
100
100
100
100
100
100
Outsourcing and resourcing
Investment holding company
Investment holding company
Investment holding company
Investment holding company
Specialist provider of pharmaceuticals
Telecommunications support
Pharmaceutical Advisory
184
185
* As disclosed in note 34, each of the above Irish registered wholly-owned subsidiaries of the Company may avail of
the exemption from filing its statutory financial statements for the year ended 31 December 2020 as permitted by
Section 357 of the Companies Act 2014 and there is in force an irrevocable guarantee from the Company in respect
of all commitments entered into by such wholly-owned subsidiary, including amounts shown as liabilities (within the
meaning of Section 357 (1) (b) of the Companies Act 2014) in such wholly-owned subsidiary’s statutory financial
statements for the year ended 31 December 2020.
** With the exception of the US subsidiaries, where the holding is in the form of membership interests, all holdings are
in the form of ordinary shares.
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 37 Group companies continued
The above table includes four pharmacy holding companies, Lindchem Designated Activity Company, Pagni
Pharmacies Limited, Pyramach Limited and Trennamally Limited. Trading pharmacy entities are individually not deemed
significant for the purposes of this disclosure.
Pursuant to Sections 314-316 of the Companies Act, 2014, a full list of subsidiaries, joint ventures and associated
undertakings will be annexed to the Company’s Annual Return to be filed in the Companies Registration Office in Ireland.
Incorporated in ROI
Registered office
All Irish incorporated companies
Incorporated in UK
Star Medical Limited
Star Outico Limited
Outico Limited
Sisk Healthcare (UK) Limited
All other UK incorporated companies
4045 Kingswood Road
Citywest Business Park
Co.Dublin
Ireland
D24 V06K
Registered offices
4 Kelso Place
Upper Bristol Road
Bath
Somerset BA1 3AU
United Kingdom
11 Davy Court, Castle Mound Way
Central Park
Rugby
CV23 0UZ
6 Wildflower Way
Boucher Road
Belfast
BT12 6TA
Northern Ireland
6th Floor
One London Wall
London EC2Y 5EB
United Kingdom
37 Group companies continued
Incorporated in The Netherlands
Registered offices
Angiocare B.V.
Star Medical B.V.
Eemweg 00031 21
3755LC
Eemnes
The Netherlands
De Tweeling 00020
5215MC
S-Hertogenbosch
The Netherlands
Incorporated in the US
Registered offices
Durbin Inc.
Pharmaceutical Trade Services Inc.
RRD International, LLC
Diligent Health Solutions, LLC
Uniphar USA, Inc.
Uniphar C&C, USA Inc.
Uniphar PA, USA Inc.
William. C. Penick IV
190 East Capitol, Suite 100
Jackson
Mississippi 39201
United States
5820 Gulf Tech Drive
Ocean Springs
Mississippi 39564
United States
7361 Calhoun Place
Suite 510
Rockville, MD 20855
United States
4800 East Street Road
Suite 100
Feasterville-Trevose, PA 19053
United States
1209 Orange Street
Wilmington
New Castle County
Delaware 19801
United States
Incorporated in Sweden
Registered offices
All Swedish incorporated companies
Incorporated in Finland
EPS Vascular OY
Hamnplanen 24
263 61 Viken
Skåne län
Sweden
Registered offices
Hauralantie 43
37800 LEMPÄÄLÄ
Finland
186
187
Notes to the Financial Statements continuedNotes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020 37 Group companies continued
The following were changes to the Group’s structure during 2020:
» As set out in note 27, in February 2020, the Group acquired 30% of the ordinary share capital of Clinical Pyramid
Limited, incorporated in the UK, bringing the Group’s holding to 100%;
» As set out in note 35, in March 2020, the Group acquired 82.3% of the ordinary share capital of Innerstrength
Limited, incorporated in Ireland;
» As set out in note 35, in July 2020, the Group acquired 100% of the ordinary share capital of Marie O’Brien Limited a
company incorporated in Ireland;
» As set out in note 35, in September 2020, the Group acquired 100% of the ordinary share capital of Bunclody
Pharmacy Limited, a company incorporated in Ireland;
» As set out in note 35, in September 2020, the Group acquired 100% of the membership interests of Diligent Health
Solutions, LLC, incorporated in the US;
» As set out in note 35, in November 2020, the Group acquired 100% of the membership interests of RRD
International, LLC, incorporated in the US;
» As set out in note 27, in November 2020, the Group acquired 10.7% of the ordinary share capital of Outico Limited,
incorporated in the UK, bringing the Group’s holding to 100%; and
» As set out in note 35, in November 2020, the Group acquired 100% of the ordinary share capital of Drishlawn Group
Holdings Limited, incorporated in the Isle of Man and Hickey’s Pharmacy Group Holdings Limited incorporated in
Ireland, which are collectively the holding companies of the Hickey’s Pharmacy Group.
During 2020, the Group incorporated the following companies in the US:
» Uniphar USA, Inc.;
» Uniphar C&C, USA, Inc.; and
» Uniphar PA, USA, Inc.
38 Post balance sheet events
On 26 January 2021, the Board approved the establishment of a new share option scheme with a reserve of 2.5% of
the issued share capital of the Company. Existing participants in the current Group LTIP (including executive directors)
shall not be eligible for the grant of options under this scheme which is intended to incentivise key senior management
who were not eligible for participation in the existing Group LTIP.
There have been no other material events subsequent to 31 December 2020 that would require adjustment to or
disclosure in this report.
39 Comparative amounts
The comparative amounts have been updated for amendments to the fair value of assets and liabilities acquired during
2019 which are set out in note 35, these amendments were within the measurement period imposed by IFRS 3.
40 Approval of financial statements
The Directors approved the financial statements on 1 March 2021.
Alternative Performance Measures
The Group reports certain financial measurements that are not required under IFRS. These key alternative performance
measures (APMs) represent additional measures in assessing performance and for reporting both internally, and
to shareholders and other external users. The Group believes that the presentation of these APMs provides useful
supplemental information which, when viewed in conjunction with IFRS financial information, provides stakeholders
with a more meaningful understanding of the underlying financial and operating performance of the Group and its
divisions. These measurements are also used internally to evaluate the historical and planned future performance of the
Group’s operations.
None of these APMs should be considered as an alternative to financial measurements derived in accordance with
IFRS. The APMs can have limitations as analytical tools and should not be considered in isolation or as a substitute for
an analysis of results as reported under IFRS.
The principal APMs used by the Group, together with reconciliations where the APMs are not readily identifiable from
the financial statements, are as follows:
EBITDA
&
Adjusted
EBITDA
Net bank
(debt)/cash
Net debt
Definition
Why we measure it
Earnings before exceptional items,
net finance expense, income tax
expense, depreciation and intangible
assets amortisation.
Earnings before exceptional items, net
finance expense, income tax expense,
depreciation and intangible assets
amortisation, adjusted for the impact of IFRS
16 and the pro-forma EBITDA of acquisitions.
Net bank (debt)/cash represents the net total
of current and non-current borrowings, cash
and cash equivalents, and restricted cash as
presented in the Group Balance Sheet.
EBITDA provides management with an
assessment of the underlying trading
performance of the Group and excludes
transactions that are not reflective of
the ongoing operations of the business,
allowing comparison of the trading
performance of the business across periods
and/or with other businesses.
Adjusted EBITDA is used for
leverage calculations.
Net bank (debt)/cash is used by
management as it gives a summary
of the Group’s current leverage which
management will consider when evaluating
investment opportunities, potential
acquisitions, and internal resource
allocation.
Net debt represents the total of net bank
debt, plus current and non-current lease
obligations as presented in the Group
Balance Sheet.
Net debt is used by management as it
gives a complete picture of the Group’s
debt including the impact of lease liabilities
recognised under IFRS 16.
Leverage
Net bank (debt)/cash divided by adjusted
EBITDA for the period.
Leverage is used by management to
evaluate the Group’s ability to cover its
debts. This allows management to assess
the ability for the Company to use debt as a
mechanism to facilitate growth.
188
189
Notes to the Financial Statements continuedFinancial StatementsUniphar plc Annual Report 2020
Alternative Performance Measures continued
Alternative Performance Measures continued
Definition
Why we measure it
Net bank (debt)/cash
This comprises of profit for the financial
period attributable to owners of the parent
as reported in the Group Income Statement
before exceptional items (if any) and
amortisation of acquisition related intangibles,
divided by the weighted average number of
shares in issue in the period.
Like for like adjusted earnings per share
is calculated for both the current and prior
period by dividing the profit of the relevant
period attributable to owners of the parent
as reported in the Group Income Statement
before exceptional items (if any) and
amortisation of acquisition related intangibles,
by the weighted average number of shares in
issue in the current period.
Free cash flow conversion calculated as
EBITDA, less investment in working capital,
less maintenance capital expenditure and
foreign currency translation adjustments,
divided by EBITDA.
ROCE is calculated as the 12 months
rolling operating profit before the impact
of exceptional costs and amortisation of
acquisition related intangibles, expressed as
a percentage of the adjusted average capital
employed for the same period. The average
capital employed is adjusted to ensure the
capital employed of acquisitions completed
during the period are appropriately
time apportioned.
Adjusted
earnings per
share
&
Like for like
adjusted
earnings per
share
Free cash flow
conversion
Return
on capital
employed
EBITDA
Operating profit
Exceptional charge recognised in operating profit
Depreciation
Amortisation
Income Statement
Note 4
Note 11
Note 10
EBITDA
Adjust for the impact of IFRS 16
Pro-forma EBITDA of acquisitions
Adjusted EBITDA
190
Adjusted EPS is used to assess the
after-tax underlying performance of
the business in combination with the
impact of capital structure actions on
the share base. This is a key measure
used by management to evaluate the
businesses operating performance,
generate future operating plans, and
make strategic decisions.
Like for like adjusted EPS is used to assess
the after tax underlying performance of the
business assuming a constant share base.
Free cash flow represents the funds
generated from the Group’s ongoing
operations. These funds are available for
reinvestment, and for future acquisitions as
part of the Group’s growth strategy. A high
level of free cash flow conversion is key to
maintaining a strong, liquid balance sheet.
This measure allows management to
monitor business performance, review
potential investment opportunities and the
allocation of internal resources.
2020
€’000
39,944
6,775
17,626
2,368
2019
€’000
28,207
12,043
15,911
2,394
66,713
58,555
(12,121)
6,923
(10,533)
246
61,515
48,268
Cash and cash equivalents
Restricted cash
Bank loans repayable within one year
Bank loans payable after one year
Net bank (debt)/cash
Net debt
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
2020
€’000
2019
€’000
60,410
3,097
(2,311)
(95,615)
114,040
2,142
(22,583)
(66,977)
(34,419)
26,622
2020
€’000
2019
€’000
Net bank (debt)/cash
Current lease obligations
Non-current lease obligations
Alternative Performance Measures
Balance Sheet
Balance Sheet
(34,419)
(13,334)
(107,203)
26,622
(10,083)
(82,901)
Net debt
Leverage
Net bank (debt)/cash
Adjusted EBITDA
Leverage (times)
(154,956)
(66,362)
2020
€’000
Alternative Performance Measures
Alternative Performance Measures
(34,419)
61,515
2019
€’000
26,622
48,268
(0.6)
0.6
191
Financial StatementsUniphar plc Annual Report 2020
Alternative Performance Measures continued
Alternative Performance Measures continued
Adjusted earnings per share
Return on capital employed
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial year attributable to owners
Amortisation of acquisition related intangibles
Exceptional charge recognised in operating profit (note 4)
Exceptional credit recognised in finance costs (note 4)
Profit after tax excluding exceptional items
Weighted average number of shares in issue in the year (000’s)
Adjusted basic and diluted earnings per ordinary share (in cent)
Like for like weighted average number of shares (000’s)
Like for like adjusted earnings per ordinary share (in cent)
Free cash flow conversion
EBITDA
Increase in inventory
Decrease/(increase) in receivables
Increase in payables
Foreign currency translation adjustments
Payments to acquire property, plant and equipment - Maintenance Cash Flow Statement
Cash Flow Statement
Payments to acquire intangible assets – Maintenance
Note 29
Note 29
Note 29
Note 29
Free cash flow
Adjustment for settlement of acquired financial liabilities*
EBITDA
Free cash flow conversion
2020
€’000
2019
€’000
27,827
21,026
279
6,775
(1,939)
-
12,043
(6,731)
32,942
26,338
262,436
183,546
12.6
14.3
262,436
262,436
12.6
10.0
2020
€’000
2019
€’000
66,713
(11,868)
8,789
13,554
(56)
(6,487)
(1,412)
58,555
(14,889)
(17,656)
30,424
207
(5,585)
(861)
69,233
50,195
4,788
-
74,021
50,195
66,713
58,555
111.0%
85.7%
Rolling 12 months operating profit
Adjustment for exceptional costs
Amortisation of acquisition related intangibles
Adjusted 12 months rolling operating profit
Total equity
Net bank debt/(cash)
Derivative financial instruments
Facility termination fee
Deferred contingent consideration
Deferred consideration payable
Total capital employed
Average capital employed
Adjustment for acquisitions (note A / B below)
Adjusted average capital employed
Return on capital employed
2020
€’000
39,944
6,775
279
46,998
202,535
34,419
-
-
81,164
4,461
2019
€’000
28,207
12,043
-
40,250
180,920
(26,622)
-
5,000
80,811
7,394
2018
€’000
(619)
152,880
27,586
7,622
51,811
5,566
322,579
247,503
244,846
285,041
(36,302)
246,175
(13,724)
248,739
232,451
18.9%
17.3%
Note A: Adjustment for acquisitions (2020)
Hickey’s Pharmacy Group
Other acquisitions completed during 2020
Adjustment for acquisitions during 2020
54,428
47,255
Nov 2020
Various
Note B: Adjustment for acquisitions (2019)
Durbin Group
Other acquisitions completed during 2019
Adjustment for acquisitions during 2019
41,856
37,885
July 2019
Various
Capital
employed
€’000
Completion
Date
Adjustment
Capital
employed
€’000
Completion
Date
Adjustment
€’000
(22,678)
(13,624)
(36,302)
€’000
(3,488)
(10,236)
(13,724)
*The adjustment to free cash flow ensures that payments made after an acquisition to settle loans with former
shareholders of acquired companies, or other similar financial liabilities, are excluded from the movement in payables
in the free cash flow calculation conversion.
The adjustment ensures that the capital employed of acquisitions completed during the period are appropriately
time apportioned. The adjustment includes cash consideration, deferred and deferred contingent consideration,
debt acquired, cash acquired, and any cash impact of shareholder loans or other similar financial liabilities repaid
post acquisition.
192
193
Financial StatementsUniphar plc Annual Report 2020 Glossary of Terms
Glossary of Terms continued
MAPs
MCAM
N/A
NGO
NHS
OCI
OTC
PAYE
PLC
PPE
PwC
Q1
Q2
Q3
Q4
QCA Code
QMS
RNS
ROCE
ROI
ROW
RRD
SASB
SDG
Tc02e
TCFD
UK
UK Code
UN
Uniphar
US
VAT
VPN
Managed Access Programmes
Multi-channel Account Managers
Not Applicable
Non-Governmental Organisations
National Healthcare Service in the United Kingdom
Other Comprehensive Income
Over the Counter
Pay As You Earn
Public Limited Company
Personal Protective Equipment
PricewaterhouseCoopers
Quarter 1 (1 January to 31 March)
Quarter 2 (1 April to 30 June)
Quarter 3 (1 July to 30 September)
Quarter 4 (1 October to 31 December)
Quoted Companies Alliance Corporate Governance Code
Quality Management System
Regulatory News Service
Return on Capital Employed
Republic of Ireland
Rest of the World
RRD International, LLC
Sustainability Accounting Standards Board
Sustainable Development Goals
Tonnes of carbon dioxide equivalent
Task Force on Climate-related Financial Disclosures
United Kingdom
UK Code of Corporate Governance
The United Nations
Uniphar plc and Subsidiary undertakings of Uniphar plc
United States of America
Value Added Tax
Virtual Private Network
2018 pro-forma EBITDA 2018 pro-forma EBITDA of €46.3m as disclosed in our Admission document
AGM
APM
Articles
Board
CCPC
CDP
CEO
CFO
CGU
Company
Covid-19
CSO
Diligent
Durbin
EAPs
EBITDA
EGM
EPS
EPS Group
ERP
ESG
EU
FDA
FMD
FVOCI
FVPL
GAAP
GDP
GDPR
GMP
GP
GRI
Group
GxP
H&S
HCP
HPRA
HR
HSE
IAS
ICT
IFRS
Inc.
IPHA
IPO
IPOS
IT
KPI
LTIP
M&A
Annual General Meeting
Alternative Performance Measures
Articles of Association of Uniphar plc
The Board of Directors of Uniphar plc
The Irish Competition and Consumer Protection Commission
Carbon Disclosure Project
Chief Executive Officer
Chief Financial Officer
Cash-Generating Unit
Uniphar plc
Coronavirus Disease
Contract Sales Organisation
Diligent Health Solutions, LLC
Durbin plc and Durbin Inc.
Exclusive Access Programmes
Earnings Before Exceptionals, Interest, Tax, Depreciation and Amortisation
Extraordinary General Meeting
Earnings Per Share
EPS Vascular AB, EP Endovascular AB and EPS Vascular OY
Enterprise Resource Planning
Environmental, Social, and Governance
European Union
Food and Drug Administration
Falsified Medicine Directive
Fair Value through Other Comprehensive Income
Fair Value through Profit or Loss
Generally Accepted Accounting Principles
Good Distribution Practice Regulations
General Data Protection Regulation
Good Manufacturing Practice Regulations
General Practitioner
Global Reporting Initiative
Uniphar plc and Subsidiary undertakings of Uniphar plc
“good practice” Quality Guidelines and Regulations
Health and Safety
Healthcare Professional
The Irish Health Products Regulatory Authority
Human Resources
Health Service Executive in Ireland
International Accounting Standard
Information and Communication Technologies
International Financial Reporting Standards
Incorporated
Irish Pharmaceutical Healthcare Association
Initial Public Offering
Independent Pharmacy Ownership Scheme
Information Technology
Key Performance Indicator
Long Term Incentive Plan
Mergers and Acquisitions
194
195
Financial StatementsUniphar plc Annual Report 2020 Uniphar Head Office
4045 Kingswood Road
Citywest Business Park
Co. Dublin
T (01) 428 7777
F (01) 428 7776
www.uniphar.ie